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Nut their effi..cl ol; thc. mai, .s,ccts ot small town:, i~ i~ar~}:. Xiost
<br />Joe, t] storc-~ i}mJ thai they cam~o~ compete wi~h fhc iow pri~cs
<br />o~'red ac big box s~orcs bc~iusc thc'ir voiumc is much Jowc~. 'l-hose
<br />buainesscs tha~ sue'irc usuali,' have a capdve market and e~i~i t~p
<br />buying theiz inventor- }~om thc larger retaiJcr.
<br /> Some communities have learned bow to circumvent these
<br />factors by organizing small business associations and better defining
<br />specialU' markets.
<br /> 01,O, Rich/am/Ou,O, 1~Ii,ms. Marie Howland rcport~ in
<br />the Februan' 1993 issue of A;r~ and Wows. the newslcuc~ of
<br />AI'A's Economic Development Division, on one small town's
<br />eventually favorabic c'xpericncc wit}. a value retailer. Wal-Mar(>
<br />arrival in lOTh closed down Other's local pharmac3, department
<br />store, and hardware store. Although o~tside t~ctors, including a
<br />national recession, also contributcci to thc downturn, many local
<br />merchants had to reposition tbemsch,es. By. thc !arc 1980s, five
<br />small specialD' stores opened with the ability to ofl~'r higher-
<br />quality items and better sec'icc than Wal-hilart. These included a
<br />fine jewelO' store, a shoe store, and cldldren's and women's
<br />apparel stores. Furthem~orc, Wai-Mart's presence attracts
<br />shoppers regionally and has helped draw business from thc
<br />surrounding countiea of.Jasper and Edwards into Oinev's.
<br />spcciahy stores. It is cica:' that Richland Coun~,'s retail growth
<br />prevailed over that of Jasper and Edwards countie=.
<br />
<br />Percent Change in Population, tncorne, and Retail Sales,
<br />1981 to 1990 for Three Counties in Southern Illinois
<br />
<br />Richland Jasper Edwards
<br />
<br />Population -0.81% -3.10% -1.00%
<br />Income 3.15% -0.75% 3.48%
<br />Retail Sales 1.86% 1.47% 0.84%
<br />General Merchandise 15.59% 5.44% 5.71%
<br />Pharmacies 9.67% NA NA
<br />
<br /> ½roqua, ~;Tsco,sin. This small communin, of 3,500 success-
<br />fully weathered the competitive forces of Wal-Mart with good
<br />planning. Fred Nelson, owner of the local True Value Hard-
<br />ware store, organized a downtown revitalization association
<br />before he and other local merchants would otherwise have been
<br />forced to close their doors. Nelson organized what he called a
<br />"reconnaissance mission" in which he and his store employees
<br />went to a Wal-Mart in Anamosa, Iowa, to check out its floor
<br />pian, }eve] of sen,ice, and stock. With the information they
<br />gathered, Nelson was able to restructure his store and provide
<br />goods and sen'ices that he knew Wal-Mart would not have. He
<br />also cut our parts of his old inventon, that he knew Wal-Mart
<br />cou}d offer at better prices.
<br /> Nelson's efforts were iteralded and mimicked by many other
<br />area business owners. Lavonne Swigum, owner of the Viroqua
<br />Home Cenrer, eliminated aiine of carpeting that she previously
<br />carried and added a quilting section. Mick RockweiJer, owner of
<br />Rockweiler Appliances and Tx', began stocking whar he called
<br />"iow-end" items that Wal-Mart carried so customers could
<br />compare his higher-quality products with what he referred to as
<br />the "iunk" the larger store carried. As other area store owners
<br />restructured their products and sen, ices to co-exist with Wal-
<br />Mart, it became clear that a niche was available for everyone. As
<br />Frank Nelson told the Ch)'cago Tribune, "Wal-Mart doesn't have
<br />
<br />to knock you out. \'4'hen the)' put their i-oot dt)x,,'i:, you get out
<br />
<br /> X'iroqua's effbrts have resulted in a solid downtown business
<br />asso~mtion th;u no~, includes Wal-Mart. Thc discount d:'pa~mem
<br />store ~ontributcs S1,000 a.year, and when a post recently bc~mc
<br />vacant on its board o~directors, W~-Man manager Bob Runvan
<br />was a~kcd to take thc position.
<br /> 7bmecula, Gg/i~,.nm. Many small towns a}so face a problem
<br />x~ hen negotiating with a large retailer that pits two small towns
<br />againq each other to see which will ofl3r a sweeter deal. This
<br />tisualh' rcsuhs in a drastic compromise on the part of the
<br />"xvmning" manicipaliD' in tc'rm~ of thc salc of land or develop-
<br />mom standards. As reported in thc _}uno 1993 i=suc of C;z/(~,'ui,~
<br />/Smui,g Cx Dct,e/tymwnt Rq, nm, Temcctfla devised a cr=ativc
<br />soiution to this problem.
<br /> Temccula is a booming small town between San Diego and
<br />Riverside. h was a prime market t}~r Wal-Mart in 1991 because
<br />irs population had doubled in t0 years and it boasted a median
<br />income of 542,000. Negotiations with Wal-Mart broke down in
<br />May 1002 because it demanded 51.5 million i~ sales tax rebates
<br />plus l0 percent annual interest on the unpaid portion of thc sales
<br />tzx rebate. Tl,s meant that if Wal-Mart received onh' 2200,000
<br />in sales t~ rebates in its first year, the city would have to provide
<br />10 percent of the remaining $1.3 million, or 2130,000, to cover
<br />its loss. Temecuta refused the offer, and negotiations broke off.
<br />Soon aftenvards, Wal-Mart was courting the neighboring
<br />communin, of Murierta.
<br /> Temecula Mayor J. Sal Munoz realized this was Wal-Mart's
<br />way of intimidating the town into an agreement. He outlined
<br />the basis for a "noncompetition agreement" with thc cin' of
<br />Murierta that would enabJe both cities to share the sales t~ from
<br />Wal-Mart no matter which town it chose. In essence, the
<br />agreement stipulated that the town in which Wal-Mart chose to
<br />locate would retain 75 percent of the sales t~, with the other
<br />receiving the balance. ~his strate~, worked, and Temecuia got
<br />the Wal-Mart wi'th no sales t~ rebates.
<br />
<br />Achieving cz Cieczr Vision
<br />"~;hether a communi~' anticipates design challenges or economic
<br />insrabilin, with the coming ora value retailer, it can seek comfort in
<br />the fact that there are many examples to learn from. Moreover, the
<br />positive impacts of big box retailers should not go unmentioned.
<br />Most stores have three shifts and can generate anywhere from 100
<br />to 300 jobs. They also draw other retailers to the area. These
<br />advantages can far ounveigh the disadvantages if a community has
<br />prepared itself for the impact ora high-volume retailer.
<br /> Achieving a clear vision of what the community wants to gain is
<br />the first step in preparing for negotiations. Knowing as much about
<br />the corporation as possible comes next, and getting from vision to
<br />realiu' without paving over the rest of the town, literal}v and
<br />fi~ratively, seems to be the art of it. Shared parking options should
<br />be considered whenever possible, Temporar?.' parking or even
<br />temporal' transportation programs for employees should be
<br />established during the holiday season to reduce peak parking
<br />demand. A~ explicit 3'et accommocating design review process can
<br />aiso help deveiop a cooperative relationship. Economic vulnerabil%,
<br />can be thwarted by creating strong local business associations and
<br />fostering regional cooperation. Business owners have to adopt the
<br />same aggressive marketing strate~' that enables the larger store to
<br />draw crowds--namely, know which products or sen, ices they alone
<br />can offer for a better deal. The proper balance of these elements,
<br />although different for ever),, community, will amount to a successful
<br />site design and a healthy economic base.
<br />
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