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 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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