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Wal—Out: Retail giant's fast Utah growth stirs a heated debate

EPHRAIM — It's quiet on a recent Tuesday afternoon in Anderson Drug & Floral on the northwest corner of Center and Main streets. In the span of half an hour, owner Jeff Anderson fills one prescription.

At the south end of this one-streetlight town, a few people come and go at Kent's Market, where store manager Dennis Davis stocks ice cream and orange juice because Kent's no longer employs a separate person for frozen foods.

It's a similar scene at Jensen's Department Store seven miles south in Manti — no customers and only the sound of country music on the radio as owner John Jensen and a store clerk price winter coats.

The two cities combined total about 6,000 residents, not including roughly 2,800 students at Snow College in Ephraim. It may be no surprise, then, that customer activity would be sedate at these businesses.

But at the north end of Ephraim, folks are flowing in and out of the Wal-Mart, which opened in August 2000. Dozens of cars are either parked or jockeying about in the huge asphalt lot out front.

The store's blue and white sign is among the first things you notice traveling south on state Route 89 into Ephraim. In yellow lettering on the monolithic building is the word "Supercenter" and in big red letters, "We Sell For Less."

The contrast in customer traffic is something that weighs heavy on the minds of business owners here in Utah's rural midsection. Yet opinions vary on whether Wal-Mart has overall been good or bad for the area.

"It probably has been a benefit, but it's not been a panacea," says Sanpete County Commission chairman Bruce Blackham. He cites commercial development on Wal-Mart's periphery, job opportunities, tax revenues and a general commercial "optimism" just with Wal-Mart's presence.

But back at the drugstore that has been around since 1910, Anderson laments the future of his business. "I don't know if it will go any further or not." When he retires, it may be that none of his six children will take over the store.

Anderson and other small-business owners all over Utah are finding themselves competing with Wal-Marts — and having a hard time keeping up.

Coming: a store near you

Wal-Mart is either planning for, proposing or actually building new stores in American Fork, Richfield, Clinton, South Ogden, Layton, Sandy, Payson, Taylorsville, West Valley City (it already has two stores there), Draper, South Jordan and Salt Lake City.

In Utah, Wal-Mart already has 21 stores and supercenters, six Sam's Clubs, two distribution centers and one neighborhood market.

Even before a foundation is laid, residents in these cities where Wal-Mart is landing voice fears over the noise, light pollution, traffic congestion, trash and an otherwise imposing "big box" appearance a Wal-Mart can bring to town. Those fears have most recently been a catalyst for formal protests against a proposed Wal-Mart in West Valley City.

"We would never locate a store where we're not wanted," says Bob McAdam, Wal-Mart vice president of corporate affairs. The voice of protest in West Valley City, he says, does not necessarily represent the majority. "We locate stores where we believe the demand is.

"We are a company that is aggressively looking to service our customers. We think we're just meeting demand."

As for fitting into communities, McAdam admits Wal-Mart hasn't always come across as the most compromising of neighbors. But that philosophy is changing. "There is a huge focus in our company right now to really commit to being a store of the community."

In Summit County, for example, Wal-Mart gave its store a more Park City look, with a copper roof and architectural towers depicting mine shafts. The Kmart across the road, incidentally, is now closed.

In other locations Wal-Mart has added substantial landscaping to help soften the look of a huge parking lot. The company has also been willing to bend on the way the store actually operates, answering to fears that a Wal-Mart will be a 24-hour nuisance.

600-pound competitor

Here in central Utah, business owners fear for their livelihoods.

Small proprietors in Ephraim and Manti have had to either find a niche to remain profitable or simply close their doors for good.

"I think that we're open is a miracle," says Kent's meat manager Ron Keele. In the pre Wal-Mart days, Kent's "had it made," he says. Kent's was the only grocer in town.

As for the few stores that have closed, some folks differ on whether it was solely because of Wal-Mart or if the stores were already on the edge and just needed a nudge.

"Some of those were marginal anyway, struggling, walking a very thin line," Blackham says. "With the downturn of the economy it could have been a foregone conclusion that they were gone anyway." Though he says Wal-Mart has "detracted" from smaller businesses, he's not sure that's a bad thing.

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At places like Kent's and Jensen's, where half their sales went away in the first year after Wal-Mart opened, "detracted" may be too weak a word.

"You're not going to compete with the big boys at their prices," Jensen says. To stay afloat, his store emphasizes "quality" and brand names not carried by Wal-Mart. The Jensen family started their business back in 1929.

Wal-Mart founder Sam Walton, now deceased, opened his first store in 1962 in Rogers, Ark. Since then the retail giant has ballooned to more than 2,700 stores, supercenters (also selling groceries) and neighborhood markets, where the focus is mainly groceries. Wal-Mart employs about 1.3 million people and is considered the largest retailer in the world.

Before Wal-Mart, Kent's employed 102 people — now it has less than 50 workers.

Wal-Mart also has more than 500 Sam's Clubs where customers buy in bulk and more than 100 distribution centers. The chain is in every state — there are at least 265 stores and supercenters in Texas alone. And Wal-Mart is doing business overseas, in Germany, Canada, Mexico and even China.

According to Wal-Mart's figures, it had its biggest single-day sales in history the day after Thanksgiving 2001 — the total, $1.25 billion. Its January 2003 sales were $12.87 billion.

Wal-Mart reports also giving back $196 million in 2001 through local grants and programs to the communities they're in.

Wal-Mart's appeal

So, why are so many people flocking to Wal-Marts? In Ephraim, some might say it's the "perception" that they sell for less.

At regular prices, a particular brand of men's razor sells for 22 cents cheaper at Anderson Drug than at Wal-Mart. And Anderson carries a specific kind of camera film not stocked at Wal-Mart. But on a four-pack of AA batteries and a popular antacid tablet, Wal-Mart saves its customers more than $3 on just those two items combined — and you get more antacid tablets with the Wal-Mart purchase.

The appeal of a Wal-Mart really comes down to "one-stop shopping," says Anderson. "I don't think price comes into it as much as convenience."

The reasons for choosing Wal-Mart vary among customers.

Salt Lake City resident Don Reifsnider goes out of his way for what he says are better deals at the West Valley Wal-Mart Supercenter. "I get the best prices on the dinners I like." On a recent Monday afternoon he walked to his car with eight Banquet TV dinners in one bag.

Next door to the West Valley store on 5600 West is a Kmart and next to that an Albertsons grocery store. West Valley City resident Jerry Murphy picks Wal-Mart because there are fewer "hassles" and shorter lines. And he has quality issues with Kmart. "I always feel like it's cheap, as in not as good."

Glad Wal-Mart is already in West Valley City, Murphy isn't concerned about a proposal to build another Wal-Mart Supercenter just four miles down the road on 5600 West. "Who am I to tell them what they need?"

Hostile takeover?

But in West Valley City and in Clinton in Davis County, proposed supercenters have residents predicting an end to the rural feel or relatively quiet neighborhood lifestyle they presently enjoy. The argument in each city is that two Wal-Marts already exist within about a 10-minute drive of the proposed sites for new stores.

Dozens of residents in West Valley City and neighboring Kearns and West Jordan have told West Valley leaders that they don't want another Wal-Mart. One woman went so far as to contact the author of a book on how to stop Wal-Marts from coming into communities.

Kearns resident Julie Fleming is worried another Wal-Mart will create eyesores as competitors and perhaps even one of the other Wal-Marts will go out of business, leaving behind empty buildings.

"The last thing we want to do is put competitors out of business," says McAdam. "Our stores are much healthier with solid competition." Wal-Mart has no plans to close any stores in West Valley City.

The fact that Kmart has been struggling of late is actually negative for Wal-Mart, he says. Yet more and more Wal-Mart stores keep going up. Some see it as an invasion of the enemy.

"They are going to ruin Utah," Jensen says. Too many people, he says, are being put out of business. "They're trying to dominate the area, and I have a hard time with that."

Others in Utah's business community don't quite see it that way.

In Tooele, where Wal-Mart built its first Utah store, Tooele County Chamber of Commerce executive director Jack Howard says businesses in Tooele that were able to compete and find their niche have survived. Wal-Mart, he says, has created more jobs than it has displaced.

Tooele now has four major grocery stores competing within a few miles of each other. The Wal-Mart Supercenter alone posted sales tax revenues for Tooele city of almost $3 million for fiscal year 2001-2002.

"Wal-Mart brought to Tooele that people no longer had to go to Salt Lake to buy everything," Howard says. "It's kept a lot more dollars in Tooele County. . . . It's hard not to shop at Wal-Mart if you live out here."

Kind of like Ephraim — almost.

Dennis Davis buys all his groceries from his employer, Kent's. He goes out of his way, all the way to Provo sometimes, for other necessities, and he stays out of Wal-Mart, even though a son-in-law works there. His conclusion on Wal-Mart?

"This is America. . . . I'm not bitter."