PALOUSITICS EXCLUSIVE - Wal-Mart: What's Next? Part Six

This is Part Six of a series of articles that will explore what happens when a Wal-Mart Supercenter comes to town.

The information contained below is being made publicly available on the web for the first time.

Back in 1994, in the Central Washington city of Wenatchee, one of the first Wal-Mart stores in our state was built. As this store has now been open 14 years, it can provide a good example of the long-term effects of Wal-Mart on a community

Michael Luis & Associates, a public affairs, communications and civic leadership consulting firm in the Seattle area, has prepared profiles assessing the impact of the opening of Wal-Mart stores in communities throughout Washington. The one concerning Wenatchee can be downloaded here.

Some highlights:

...the retailing world discovered Wenatchee. Allison Williams, of the Wenatchee Mayor’s office, and who was with the Wenatchee Downtown Association at the time, says that she “can’t isolate the arrival of Wal-Mart from the arrival of the rest of the ‘marts.’ Within two years we had new K-Mart, Target and Costco stores. Word had gotten out that the region was underserved.”

The outside “discovery” of Wenatchee, combined with internal economic development efforts, transformed Wenatchee into a major retailing center for a largely rural area with about 200,000 people. According to Williams, it was “the story of every community that has gone from small to medium. Some businesses found that they weren’t serving the market, but many very good businesses survived and thrived, despite the opening of not just Wal-Mart, but several other large retailers.”

According to those who observed the arrival of Wal-Mart and other major retailers in the 1990s, the impact on existing Wenatchee retailers was not huge. Most stores survived and adjusted to the new environment.

...in most respects the retailers of Downtown Wenatchee do not compete directly with Wal-Mart and the other big boxes...the region still has a large population of low income people and agricultural workers who shop at Wal-Mart but probably would not shop in Downtown Wenatchee....the typical downtown customer...having significant disposable income and a desire for unique goods.

Purchasing power is spread fairly evenly around the county, so Wenatchee is collecting more in sales tax revenue than its residents alone are paying out, making retail sales a valuable attractor of City tax revenue.

...well-established training programs..help people make the transition from agricultural work to other industries...retail tends to be an entry point for these workers, and that stores like Wal-Mart provide excellent opportunities.

Monday: We'll go back over to the West Side and look at Wal-Mart in a town that was devastated in last year's floods: Chehalis.

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PALOUSITICS EXCLUSIVE - Wal-Mart: What's Next? Part Five

This is Part Five of a series of articles that will explore what happens when a Wal-Mart Supercenter comes to town.

The information contained below is being made publicly available on the web for the first time.

Covington, WA, is a fast-growing suburb of Seattle located in southeastern King County. I used to live just up the road from Covington in Kent.

Covington is booming, with many new retail and housing developments. I was there not too long ago. There is a new Safeway, I believe, with a Starbucks in it, and another Starbucks across the parking lot in the same strip mall!

In 2005, Wal-Mart opened a store there after some opposition. Building a Wal-Mart anywhere in the metroliberal Seattle area is next to impossible, as you can imagine. I've been to the Covington Wal-Mart. It is very nice and very unobtrusive, located well off the main drag of Kent-Kangley Road.

Michael Luis & Associates, a public affairs, communications and civic leadership consulting firm in the Seattle area, has prepared profiles assessing the impact of the opening of Wal-Mart stores in communities throughout Washington. The one concerning Covington can be downloaded here.

Some highlights:

The Covington Wal-Mart has only been open two years, but the impact of that store opening is clear. The major jump in sales from 2004 to 2005 reflects the opening of the new Wal-Mart in Covington, which opened its doors in early 2005.

Retail store sales growth in this fast-growing community has been even stronger and more consistent than Covington since 1998. Sales growth in Maple Valley slowed only very slightly from 2004 to 2005, during the opening year of the Covington Wal-Mart, indicating that the new Wal-Mart did not take a big bite out of retail in Maple Valley.

The retail customer traffic drawn by Wal-Mart has been a catalyst for additional retail development in the emerging “downtown” of Covington.

Covington has benefited from increased tax revenues generated by expanded retail. A major new retailer like Wal-Mart shows up most prominently in increased local sales tax revenue, but also shows up in property taxes paid on the new building and whatever mix of business and utility taxes levied by the local government.

...the jump in inflation-adjusted revenues to the City of Covington between 2001 and 2005. During this four year period alone, sales tax revenue grew an inflation adjusted 54 percent.

As part of the development of the store, Wal-Mart made significant contributions to traffic mitigation measures that will serve other retail and future residential development in Downtown Covington. According to Hart, a well-designed store and adequate traffic improvements have made Wal-Mart a major net plus for the City.

According to Messer, of the Covington Chamber, Wal-Mart is a “fantastic” contributor to the community. Store personnel are active in the chamber and in local service clubs, regularly attending events.

In 2006, Wal-Mart made two important community contributions. When the annual “Covington Days” festival was threatened with cancellation, due to lack of funding, Wal-Mart stepped up with a check for $10,000, ensuring that the festival would take place. Wal-Mart also participated in a volunteer recognition event at Covington Elementary School, providing clothes for students to wear at a fashion show.

Thursday: We'll hop over to Apple Country and look at the effects of the Wal-Mart that opened in Wenatchee.

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PALOUSITICS EXCLUSIVE - Wal-Mart: What's Next? Part Four

This is Part Four of a series of articles that will explore what happens when a Wal-Mart Supercenter comes to town.

The information contained below is being made publicly available on the web for the first time.

In 2003, after Wal-Mart announced plans to construct a Supercenter in the Olympic Peninsula town of Sequim, WA, a small, vocal group of snobs got together and decided to oppose it. They called themselves "Sequim First." These opponents of "cookie-cutter development" picked a cookie-cutter name right out of Weird Al Norman's playbook (e.g. "Give it [your Wal-Mart hating club] a short, upbeat name like 'Freeport First.'”) Sheesh.

Sequim First's tactics will sound very familiar to Pullman readers. Initially, the city council approved the project. Then Sequim First filed a lawsuit appealing the SEPA approval and the decision not to require an independent Environmental Impact Statement to the Thurston County Superior Court. The group cited significant impacts to stormwater runoff, traffic, emergency services, water supply, and other municipal services, and damaging effects on the downtown core. The court rejected the appeal on March 19, 2004. Sequim First then appealed to the state Court of Appeals in June. Nevertheless, the new Wal-Mart opened on October 22, 2004. [Note: On August 18, 2005, Sequim First wrote to the Department of Ecology requesting that Sequim be added to the same costly NPDES Phase II stormwater permitting that Pullman is saddled with, because of "the continued emphasis on almost-uncontrolled growth in Sequim." Gotta love the spitefulness of these urbanistas.]

So what happened next?

Michael Luis & Associates, a public affairs, communications and civic leadership consulting firm in the Seattle area, has prepared profiles assessing the impact of the opening of Wal-Mart stores in communities throughout Washington. The one concerning Sequim can be downloaded here.

Some highlights (notice the similarities with Pullman):

...sales in retail stores in Sequim and Clallam County as a whole were relatively flat in the first part of the decade. Sales began to pick up steam across the county in 2004, and especially in Sequim, where Wal-Mart opened in October.

Not all of the increase in retail store activity in 2004 and 2005 was due to Wal-Mart, however. ...sales at stores in Sequim, other than Wal-Mart, [saw] a substantial bump upward in 2004 and 2005. The opening of the Wal-Mart clearly did not hamper overall progress in retail expansion in Sequim.

...only a few small stores closed after Wal-Mart opened, and those were owned by people who were ready to retire and close up shop anyway. Mayor Schubert, whose professional background is in retail, believes Wal-Mart’s arrival was a useful “kick in the backside for local retailers. It forced them to get on the ball.”

The strict lids that have been instituted on property tax collections in Washington have kept these taxes from rising in areas without substantial new construction. Thus, in a city like Sequim, municipal finances have begun to rely more on sales tax for growth. ...sales tax collections in Sequim have increased substantially as large new retailers have opened in the city.

...four revenue sources...generated about $2.5 million in 2001, or about $575 per resident. This had increased to $3.9 million by 2005, or about $835 per resident. By
accommodating Wal-Mart and other retailers, Sequim stemmed the leakage of sales tax revenue to Port Angeles and other communities, and captured tax revenue from shoppers living in surrounding unincorporated areas.

Between 1995 and 2005, while the population of Clallam County grew by 10 percent, retail employment grew by over 40 percent. Overall employment in the county has been growing steadily, and the current unemployment rate, about 5.5 percent, is low by recent historic standards. Schubert says that with employers like Wal-Mart, “people who didn’t have jobs eight years ago now have jobs.”

As Sequim grew from a small rural town to an important tourist destination and retirement community, local retailing did not keep pace. Local retailers were adept at catering to visitors, but not at filling basic needs of residents, many of whom are on fixed incomes. Wal-Mart and other big box retailers have met this need, saving local residents from having to drive to Port Angeles or Silverdale.

Wednesday: We'll take a look at the effects of a Wal-Mart that opened in the Seattle suburb of Covington.

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PALOUSITICS EXCLUSIVE - Wal-Mart: What's Next? Part Three

This is Part Three of a series of articles that will explore what happens when a Wal-Mart Supercenter comes to town.

The information contained below is being made publicly available on the web for the first time.

I've always dreamed that one day the opponents of Wal-Mart in Pullman will make a factual argument to support their case, rather than resort to "special-interest propaganda," "symbolism over substance," "pejorative labels," and "playing on the average citizen's distrust of corporate America," as detailed by Richard Carson. I'm still waiting.

"Progressive" Amir Hassan writes in today's Summer Watermelon:

Likewise, small businesses find themselves unable to compete with Wal-Mart’s rock-bottom prices. A Pullman Supercenter will choke and kill much of our beloved local commerce.

I suppose one can't argue with a self-styled "expert" on Pullman economics who is also a Rhetoric and Composition grad student from Seattle who uses apocryphal stories and far-left websites to support his arguments. Nevertheless, let's take a look at some hard data anyway.

The Simeon Partnership, an economic and public policy consulting firm in Bainbridge Island, WA, prepared a study in 2005 of long-term economic impacts of the Wal-Mart that opened in the small coastal Washington city of Aberdeen back in 1994. The study examined impacts on local businesses, as well as tax revenue and worker wages. The brief summarizing the study can be downloaded here.

Some highlights:

“Not one business went out of business because of Wal-Mart,” says Michael Tracy. He should know. Tracy heads up the Grays Harbor Economic Development Council. His organization has tried to identify and help businesses affected by Wal-Mart’s decision to locate in Aberdeen in 1994.

“Understand,” says Tracy, “there was high unemployment at the time and businesses were going out of business right and left. But, not because of Wal-Mart.” Wal-Mart slowed the flow of people leaving Grays Harbor to do their shopping in Olympia, he says.

Aberdeen and Grays Harbor County had real gains of 13 percent and 7 percent, respectively in taxable retail sales from retail trade from 1995 through 2003.

“The threat to locally owned businesses is not Wal-Mart,” Tipton says, “it’s I-5 to Tumwater, Lacey and Portland. Wal-Mart has slowed [Aberdeen’s retail sales leakage] considerably.” When local shoppers stay in town to buy their basics at Wal-Mart, he says, they are more likely to look locally first for their other needs and to comparison shop at home, given the opportunity.

Wal-Mart captured an increasing share of a increasing retail sales base in Aberdeen and Grays Harbor County between 1995 and 2002. As Figure 3 shows, taxable retail sales from retail trade in Aberdeen and Grays Harbor County kept pace with inflation even without Wal-Mart over this period, demonstrating that Wal-Mart not only increased its market share, it helped grow the size of pie.

...the city’s revenues have grown in all categories since 1994. Sales and Use Taxes have been a good source of revenue growth – up 9 percent after inflation from 1994 through 2003 – but the big growth category for the city’s general services has been Business and Utility Taxes, which was up 16 percent after inflation. These are taxes levied by the city on various special services like water, sewer and garbage.

Adjusted for inflation, Wal-Mart’s sales tax contribution to the city grew 89 percent from 1996 to 2002. At the same time Wal-Mart’s share of city sales taxes paid doubled as its tax contributions grew well ahead of overall city sales tax growth.

Total wages in Grays Harbor County paid by stores in the general merchandise category, like Wal-Mart, grew from $4.6 million in 1993 to $6.5 million in 1994 the year Wal-Mart opened – a 39 percent increase after inflation. And, average general merchandise employment went from 345 to 477 jobs.

On average general merchandise stores in Grays Harbor County paid their employees about $13,263 annually in 1993 before Wal-Mart came to town. By 2003 this average annual wage had grown to $21,432. Even after adjusting for inflation, general merchandise workers experienced 21 percent growth in their real average wages.

Tuesday: We'll take a look at what happened over in Sequim, after much controversy in opening a Wal-Mart Supercenter there.

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Wal-Mart: What's Next? Part One

This is Part One of a series of articles that will explore what happens when a Wal-Mart Supercenter comes to town.

One of the first things that we can expect as construction nears an end is the opening of a Wal-Mart hiring center to process job applicants.

In Avon Park, FL, population 9,056, a new Supercenter is nearing completion. Highlands Today printed this story on June 25:

The temporary Wal-Mart Hiring Center had more than 2,000 jobseekers hoping to fill its 350 open positions in time for the new Supercenter's opening in August, according to one of the new Supercenter's co-managers.

Sherri Smith, who manned five other hiring centers in the Tampa Bay area, said she was "shocked" by the number of jobseekers that applied at the hiring center the past four weeks since it opened.
"It's a lot of paperwork," she said. "For being such a small town, I'm astounded in how many we're getting."

As Jason Furman, a strong supporter of Wal-Mart and Barack Obama's economic advisor wrote, a Harvard applicant has a higher chance of being accepted than a person applying for a job at that Wal-Mart.

So much for Wal-Mart being such a bad place to work.

Tomorrow: Wal-Mart and Neighborhood Businesses

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