business news in context, analysis with attitude

We got a number of emails about some of Wal-Mart’s expansion plans.

MNB user David Livingston wrote:

A lot of people might be wondering why Wal-Mart would plan a supercenter in such a small market as Hartford, Wisconsin. Especially when they have another nearby supercenter in West Bend just a few miles away within the same county. That’s easy to answer, the Hartford Kmart was probably the #2 Kmart in the state as far as sales per sq. ft. goes. It was #3 until Wal-Mart opened in Burlington. Wal-Mart seems to be opening stores targeted at the very best remaining K-marts.

I'm sure they believe that if Kmart can do well, they can do better. Especially if Kmart closes. Keep in mind that the very best Kmarts only do a half to a third of what an average Wal-Mart does.


And regarding possible opposition to Wal-Mart stores in the New York suburbs of White Plains and New Rochelle, one MNB user wrote:

As a kid and into my teens, I went to New Rochelle. I will be 40 in June, so I remember New Rochelle in what some may consider its hey day. If that term can be applied to New Rochelle in any way. I agree that New Rochelle is not the bustling place it was in the late 60's and early 70's, but an effort is being made by the city and local retailers. The new "New Rock" mall attracts many people for amusement, as well as at the Super Stop & Shop within the mall's footprint. On the Post Rd., going towards Larchmont, there are small retailers like donut shops and deli's. On Main St in New Rochelle, there are little ethnic produce markets. A Wal-Mart, which for the life of me, I can't imagine where the Bentonville Behemoth would put one of there smaller, AKA 100,000 sq ft stores, in New Rochelle, any attempt that is being made to revitalize New Rochelle by numerous smaller retailers would be obliterated by a Wal-Mart.

This fact doesn't even take into account the complete lack of parking facilities available for a Wal-Mart, the drastic increase in an already crowed traffic area, and the effect a store would have on other small retailers from Pelham and Hartsdale, to Larchmont, Rye, Harrison and Mamaroneck. Although Rye and Larchmont maybe able to take this kind of economic heat from an operating Wal-Mart store a little better than the other towns, since they are a bit more affluent, the effect would be strongly felt.

The local retailers in these towns can not stand up to the buying, marketing, financial and to an extent, political clout of Wal-Mart. The small town feel of knowing the local retailers, which you and I are aware of in these towns, would certainly end as they went all, one by one, out of business. A Wal-Mart would create many empty small retail locations in its wake. It would not improve the communities surrounding it, but be to their detriment. These towns, like many others, would come to depend heavily on the existence of 1 store. Wal-Mart. Not just for food, clothing or household goods; but for jobs and their tax base. That to me, is dangerous.

I analyze retail operations for a living. I constantly read about Wal-Mart trying to control more and more of everything from the grocery industry, which they have done to an extent already, to gasoline kiosks in their store parking lots. 2 months ago, one of their own reports stated they were considering getting into "cookie-cutter" housing.

A super center, gasoline, housing. All we need is a hospital, a power station and a school and we have a town. "Waltown". Conveniently located in "Walmerica".

I could continue this ranting, but I'll close. I don't wish to see Wal-Mart go out of business. It’s a great success story and a tribute to the idea Sam Walton founded years ago. However, where does this retail steam roller stop? I believe local governments need to put restrictions in place to keep "Walmerica" from becoming reality. The best way to do this is slow down Wal-Mart like you would any company. Financially and legally/politically. Wal-Mart shouldn't get tax breaks for coming onto a town, but taxed more to make up for lost higher paying jobs, tax revenue and displaced local retailers. Just an

FYI- I've shopped in several Wal-Marts, and it is bar none, the worst shopping experience I've ever had, and sells some of the poorest quality products I've ever seen.





On another subject, one member of the MNB community wrote:

I was aghast at your two readers' bigoted comments about Hispanic marketing on Monday. One said, "In my opinion the best run Hispanic stores are operated by independent Hispanic operators, not some sterile corporation in Minnesota.”

The other said, "The consumers would rather shop at a store owned by another Hispanic person than a large chain. There are produce markets and warehouse outlets in the area and people are used to shopping there for all their grocery needs. "

Sounds like black marketing before the Civil Rights Act.

Non-Hispanic operators have been serving the needs of Hispanics with full service stores for years.

Look toward Texas, which has retailers across the spectrum of chains to independents offering full service markets that can appeal to both Hispanic and non-Hispanic customers. HEB in Central Texas has been handling the integration of customers as a chain for years, with great success. The semi-independent Super S foods has as well. Fiesta Markets in Houston understands the integrative approach to retailing in East Texas, which boasts both a large Hispanic and a large Asian trade. Out in West Texas, Pueblo Markets, a non-Hispanic owned independent group (I think they are Irish!), has taken an integrative approach to marketing since before the Depression and weathered any invasion in that area from chains or independents (both Hispanic and non-Hispanics) that thought they could compete on the border. And Pueblo has also been noted for their large selection of gourmet foods, which your readers should note also appeal to Hispanic shoppers.

As the Hispanic population grows, all retailers in the US will be faced with the question: how do I capture market share from ALL sectors, through full service merchandising. The answer is not, as your reader would suggest, warehouse store concepts and produce truck markets. The answer is not for them to shop in a Hispanic-owned store "on their own side of the tracks." The answer can be found where integration has not been an issue for decades. Take a trip to the borderland of Texas (or Arizona) and look at the models of integrative markets. If it works there, it should work in all states, including Minnesota. Your other reader suggesting that only Hispanic owners can capture this business should look beyond such prejudicial thought and understand that non-Hispanics have had the formula for success for a long time. It comes from assuming that all the consumers in your market want to shop with you if you run a good store and HONOR their differences, not assume that all Hispanics want is Hispanic influence, truck produce and warehouse prices.

And for those that are not prepared to compete for the Hispanic trade (with honor) should start looking for buyers for their stores because this business is coming fast and heavy and can make the difference in most communities across the US in the coming years. There is a saying among both Hispanics and non Hispanics along the border, "mi cultura es su cultura". It means we all share the same culture. Obviously this will soon apply to many areas north of the border...way north. So, if you want to see integrative retailing in action, head to Texas. There is good business that is bi-lingual, owned by Hispanics and non Hispanics alike and making profits with honor. Or, keep thinking your communities will progress with segregated markets. Your choice, but...buena suerte, pendejos!





On the subject of Apple Computer reinventing itself, one MNB user wrote:

If you think back to the introduction of the first "Apple" computer, much was said about it as is being said today about the iPod.

And where is the "Apple" computer today?

Hardly a part of the computer generation except for a few particular segments of computer users.


Well, that seems a little condescending. While Apple’s business plan clearly has left something to be desired, its ability to innovate is second to none. And among those of us who use Macs, Apple has done an incredible job of inciting slavish loyalty.

We’re writing this on a brand new PowerBook G4, which is the finest piece of equipment that we’ve ever owned.

MNB user Kevin McKamey chimed in:

Have you read Tom Peter's new book "Imagination". I am currently reading the book and the Apple a Day story points in the same direction that Tom is sending his readers. I enjoy reading your column every day as well as noting your point of view that retailers must differentiate themselves in order to succeed.




And, contributing to the ongoing debate about Starbucks, MNB user MacKenzie Malcolm wrote:

I can't believe MNB readers have such self-esteem issues that they're intimidated in a Starbucks! I've been a Starbucks customer for years and I still say "skim" instead of nonfat, and if they're laughing at me, I can't say that I'd ever noticed.

That said, I'm worried about Starbucks jumping the shark. A couple of their stores here in Boston, especially the very large one on Boylston Street, are starting to look VERY tatty. But I'm most worried about the introduction of even more non coffee drinks. A whole generation of kids are growing up thinking that coffee is a Frappuccino. Not only is it going to make them fat, but that doesn't bode well for "real" coffee 20 or 30 years down the line.

BTW - A reader commented that he'd only had good service at one Starbucks - a franchise store owned by Michael Jordan. To my knowledge, Starbucks does not franchise entire stores, but does license its product to selected companies.





And finally, kudos to everyone who wrote in about the famous fictional couple who lived in pre-Wal-Mart New Rochelle: Rob and Laura Petrie, of course, played by Dick Van Dyke and Mary Tyler Moore.
KC's View: