I figure that those of you who don't share my fascination with the continuing Wal-Mart tale can always skip it.
"Who's going to patronize a little bitty two by four kinda store anymore?"
The Music Man
Against the Wal*
Supercenters are next challenge in local businesses' fight for life
GENESEE COUNTY
THE FLINT JOURNAL FIRST EDITION
Sunday, February 20, 2005By Sally York
syork@flintjournal.com • 810.766.6322
After Wal-Mart came to his town, Tom Reed of Reed's Appliances hit on a surprising business strategy: He moved from downtown Lapeer and set up shop across the street from the retail giant.
"I did it for the uptick in traffic," Reed said. "And I wasn't really competing with Wal-Mart because their (electronic) appliances were low-end and mine are high-end."
But Reed didn't anticipate Wal-Mart razing its store and building a supercenter on the same site. Open since November, the Super Wal-Mart has already hurt the electronics part of his business, Reed said.
"Now, they're carrying the same equipment I do."
So how can a puny David compete with an ever-changing, ever-mightier Goliath?
As Wal-Mart - America's largest employer and the world's biggest retail chain - aims for supercenters in Grand Blanc Township and Fenton, it's a life-or-death question for small businesses.
Stay open later, the experts say. Beef up customer service, sell what Wal-Mart doesn't, buy in bulk with other businesses to sell at lower prices, get involved in local civic life.
In Howell, where a supercenter already has arrived, the Shamoun family hopes strategies like that will keep them alive.
They knew they'd have to get creative when they bought a small, 40-year-old downtown grocery store in October. Howell Village Market competes with a Super Wal-Mart that sells groceries and just about every other product imaginable six miles away in Genoa Township.
"You can't beat their prices," said Tim Shamoun, 22, who operates the market with his father, Steve, 48, mother Kathy, 44, brothers Brandon, 18, and Chris, 24, and sister Meagan, 15.
He said his family's approach is to carry products not found in big-box stores - specialty wines, gourmet foods, custom floral arrangements - join the Howell Chamber of Commerce and treat customers like family.
"If we don't have something a customer wants, we'll tell them to come back the next day and we'll have it," he said. "I'll drive anywhere to buy that item."
The Shamouns are making it so far, but other small businesses may be losing the Darwinian struggle with Wal-Mart, Meijer, The Home Depot, Lowe's and the rest of the retail giants.
In Lapeer, cars steadily roll into the expanded Wal-Mart every day, passing Reed's on the way.
"It's been rough," he said. "I try to sell around Wal-Mart by offering products they don't have. I sell service, delivery and setup."
Despite his store's current difficulties, Reed said he doesn't regret moving.
"Downtowns are dying all over," he said. "The competition from (big-box retailers) isn't going anywhere. I might as well be right across the street from them."
Downtowns gear upDowntowns aren't necessarily dying, but Wal-Mart and other large retailers are forcing them to transform, said Amy Connolly, director of Howell's Downtown Development Authority.
"Significant categories of businesses are no longer represented downtown: drugstores, small electronics stores, hardware stores and groceries," she said.
An old-fashioned downtown five-and-dime store went out of business after Wal-Mart arrived, she said, and a Gill-Roy's Hardware left downtown at about the same time.
Still, downtown Howell's storefronts are 99 percent full, Connolly said.
"Downtowns now have to be 'experiential' - a memorable experience for people who park and walk around," she said. "You see more specialty retailing like bookstores, art galleries, ladies' clothing stores, restaurants and retail stores that have a service component.
"You adapt or you die out. We've chosen to adapt."
Lapeer's downtown has undergone a similar transformation. Joe Wenzlick, owner of Thorne's Pendleton Shop, said business at his upscale ladies' clothing store, which dates to 1934, hasn't been affected by big boxes. But he has watched others leave.
"We had a dime store that disappeared after Wal-Mart came in," Wenzlick said. "There used to be three drugstores; now there's one. There used to be five clothing stores; now there's one. A hardware store closed four years ago."
But more arrived. Lapeer's new downtown businesses are restaurants, entertainment venues and specialty shops, he said. The city's center is about 98 percent full.
Up north in Petoskey, a downtown record store owner blames the nearby Wal-Mart - built in Bear Creek Township in 1997 and expanded into a supercenter in 2002 - for contributing to his store's recent demise.
"They sell CDs for $9.99 - new-release products for $9.99," said Larry Rochon, owner of Record World, which closed this month after 26 years. "My cost on such products is $12.90, so it's hard to compete with somebody selling for $2 below your cost."
The resulting sprawl from Wal-Mart has attracted other businesses, including a movie theater that moved from downtown.
"I think what Wal-Mart did is it affected the traffic flow in downtown Petoskey," Rochon said. "The locals just started frequenting the Wal-Mart complex and created a real change in patterns in traffic. Friday night used to be a big family night in Petoskey. There's nobody downtown (now) on Fridays."
Rochon said he tried to adjust by offering blues, jazz, punk, alternative and techno music that wasn't on Wal-Mart shelves, which helped keep the store afloat for awhile.
Roderick Scott, a spokesman for Wal-Mart, said Wal-Mart customers are pleased with its low prices.
"In many aspects, we can be beneficial to other businesses in an area because of the mere volume of people that we bring in," he said. "In terms of the Grand Blanc development, there will be (new) businesses in our area, not just our supercenter. It also helps bring business to those individuals."
Getting Wal-smartNorman Tyler, a professor at Eastern Michigan University who has researched Wal-Mart's impact on small stores, tells business owners to first study up on Wal-Mart.
"You can try (keeping it out of the community), but your chances of winning are slim," he said.
"Second, learn from the examples of other communities. Don't feel like you have to reinvent the wheel. Third, make adjustments to your inventory so you are not competing with Wal-Mart head-to-head.
"Finally, don't see other local businesses as competitors. See them as partners. You have to get together and work out a strategy."
Frank Leppek, the 35-year owner of Leppek Nursery, three miles from the Howell-area Super Wal-Mart, said he and other area nurseries have banded together to buy products at bulk rates.
He's still unable to match Wal-Mart's prices every time, but Leppek said he relies on his staff of master gardeners and degreed landscape designers, his eye-catching building facade and his good reputation to stay alive.
He said his seven-acre nursery's profits have increased every year despite the presence of Wal-Mart, Lowe's and The Home Depot.
"I was determined they weren't taking me down," he said.
Going that extra mile helps.
"We'll carry a bag of soil to your car, open the door, put a liner in and then the bag," he said. "It doesn't take much to be nice to people."
The bottom lineBut nice isn't always enough.
"The one thing that matters most to customers is price," Tyler said. "You will always find big support for Wal-Mart because they can undercut anybody's price."
Price matters to Debbie Slocum, 51, of Lapeer. She's a former Wal-Mart employee, but that's not the only reason she's a regular shopper at the supercenter.
"Farmers and blue-collar workers work hard for their money, and you get good value and a lot of selection at Wal-Mart," she said.
"I come for the one-stop shopping. They have everything. Also, the people there are friendly, and they're real. I have three grown daughters, and we're all die-hard Wal-Marters.
"I love Wal-Mart."
Even so, she quit four years ago to work at The Home Depot in Lapeer.
"Home Depot pays more," Slocum said.
Flint Journal staff writer Bob Wheaton contributed to this report. |
