Look Out, Here Comes Wal-Mart
At the Farmer's Exchange in downtown Kennewick, you can pick up an 80-pound bag of cattle feed or buy garden tools, sprays and fertilizer spreaders.
"Anything for the garden," remarks Ken Silliman, whose family has been part of the store since his father went to work there in 1930. The elder Silliman bought the store in 1943 and it's been run by family members ever since.
Now, Silliman is about to get a neighbor in the same line of business - and so is just about everyone else in the Kennewick-Richland-Pasco area.
The world's largest retailer, Wal-Mart, said yesterday it will open its first store in Washington in Kennewick by 1994, joining 1,747 Wal-Mart stores in 43 other states. Wal-Mart plans to build a 116,000-square-foot store by the Columbia Center shopping mall, about four miles from the Farmer's Exchange.
Among its 36 departments is lawn and garden supplies.
"It'll probably make us get sharper than we are," says Silliman, who runs the store with the help of up to 25 employees, including his wife, a son and a daughter. "I guess it's just one of those things you see with a growing economy."
While Kennewick braces for the advent of a retailer dubbed "The Merchant of Death" for the impact it's had on small-town America's Main Streets, other Washington towns are preparing for the coming of Wal-Mart as well.
It is a retailer that tends to saturate areas where it does business.
Officially, the Bentonville, Ark.-based discount giant says it has planned only one store in Washington so far. But, according to a recent notice in the Daily Journal of Commerce, the Omak Planning Commission has given preliminary approval to a proposal to annex land for a proposed Wal-Mart in that area.
Kennewick? Omak? These may not sound like the kind of towns the world's largest retailer would choose for a debut. But they're typical Wal-Mart choices.
One key to Wal-Mart's success has been its willingness to go into small towns and more recently, suburban areas, that have had little access to discount retailers such as K mart, Target or Fred Meyer. Once there, the combination of Wal-Mart's rock-bottom prices, vast selection and customer service can draw shoppers from up to a 100-mile radius, making a trip to the store into an excursion for rural shoppers.
But the combination can stagger the competition. Typically, the presence of a Wal-Mart can act like a vacuum cleaner for the region's buying dollars, sucking up sales that formerly went to other discount retailers, catalog sales and smaller stores.
"They're locusts coming across the plains," says retail analyst Dick Outcalt. "They just take everything."
Everything has proven to be a lot. In the fiscal year ending Jan. 31, the company reported sales of $43.9 billion. And in the same period, it opened 150 new Wal-Marts, or about one every other day.
Wal-Mart's increasing buying clout has been a tremendous asset as it has grown. It uses that clout to get price breaks from suppliers that allow it, in turn, to sell to consumers for lower prices. Wal-Mart, Outcalt says, also manages to get lower prices from suppliers by working closely with them to cut their costs, allowing them to sell to Wal-Mart for less.
While that is an area pioneered by Sears Roebuck and others, Wal-Mart has been able to use such methods more successfully than any other retailer, in Outcalt's opinion.
"The ultimate effect is, it makes Wal-Mart more cost competitive," he says.
Even though Wal-Mart won't speculate on future sites in this state, Outcalt says certain "quasi-urban markets" are likely areas for expansion. Among them: Chehalis-Centralia, Shelton or Silverdale, Burlington or Mount Vernon.
For a preview of the kind of community Wal-Mart seeks, look south to Oregon, where Wal-Mart has opened stores in Salem, Lebanon and Klamath Falls and has announced it will open future stores in Coos Bay, Hermiston, Woodburn, Grants Pass and McMinnville, according to the Eugene Register Guard.
And the retailer plans to open five Wal-Marts in Idaho by the end of this year, according to the Associated Press.
But major metropolitan areas should feel little impact. That's because cities such as Seattle and Tacoma already have plenty of discount retailers to choose from. And many of those retailers are specialists offering more selection within a particular category.
Also, even with 36 departments carrying everything from shoes to jewelry, toys to family apparel, pharmaceuticals to snacks, Wal-Marts generally don't have much attraction for cosmopolitan shoppers seeking the more unusual array of goods.
However, stores outside of the immediate areas where Wal-Mart locates could lose some trade to the new arrival. Small town or suburban shoppers who formerly drove to cities to do their discount shopping likely will be siphoned off by Wal-Mart stores closer to home, and that could hurt retailers dependent on that traffic.
Some merchants even look forward to having a Wal-Mart in the neighborhood, noting that it will draw more shoppers to the area. And others plan to survive a Wal-Mart invasion by specializing in - or switching to - merchandise Wal-Mart doesn't carry.
That's the strategy of Scott Stott, a Kennewick jeweler who offers customers a cup of coffee while they browse through his diamond selection. Stott believes Wal-Mart clerks won't be able to offer the experience or the selection of extra-large diamonds he can offer.
"I don't believe it's going to affect us that much," says Stott, whose store will be about a mile and a half from the Wal-Mart.
And Brenda Hoover, owner of David's Shoes, says the competition will be interesting but won't affect her business, which specializes in comfortable shoes and odd sizes for those with problem feet.
In this case, she says, Wal-Mart's size could work against it. "We get a lot of people that probably can't walk the length of the aisle at Wal-Mart."
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