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Wal-Mart's spokeswoman puts best spin on story many find tainted

River Falls appears headed to the altar with Wal-Mart.

It's an uncomfortable match for many of us - especially those of us in the "strictly local" community newspaper business.

Our city danced with the giant a few years back and managed to chase it away with regulatory sticks and bureaucratic walls.

Meanwhile, we've watched new stores appear in nearby Woodbury and Red Wing, and expansions occur at St. Croix Falls and Menomonie.

When the 160,000-square foot behemoth opens at New Richmond on Wednesday, Oct. 26, there will be five Wal-Marts and a Sam's Club within 30 miles of River Falls.

So why would the corporation want to open another so close?

Since Wal-Mart isn't talking, we're left to speculate. This is an opinion page, here's my take:

  • Hudson's roughly 100,000-square foot store is ugly, aged and substandard for the tastes of many area residents. We've heard workers there have been told that once the River Falls store is up, that store will close and jobs will transfer here.

  • Wal-Mart has demonstrated its saturation strategy in many metropolitan regions. Once regional distribution centers are established nearby, operating costs fall. Thus, it's OK to cannibalize one's own customer base for the good of the team.

  • The location is prime to serve a region projected to continue growing at faster-than-average rate.

    Mona Williams has probably faced down larger and much tougher crowds during her esteemed career, but few more passionate than the 150 weekly newspaper owners, publishers and press association directors she met in Milwaukee recently.

    Williams, vice-president of corporate communications for Wal-Mart, made good on a promise made by her boss, CEO Lee Scott, to meet with small-town publishers sometime after National Newspaper Association president Mike Buffington poked the retail giant in the eye last September.

    Buffington threw a jab after receiving W-M news release suggesting small-town newspapers send their editor to their nearest store to report on the good things the company was doing in its communities.

    Buffington mailed the dispatch back to Bentonville with the reply that if Wal-Mart felt the news columns were worthy of their mention, it should consider using our columns for advertising as well.

    His bravado attracted lots of attention and prompted hundreds of news stories, on-air interviews from the likes of the New York Times and National Public Radio. A year later, Buffington put on his best diplomatic face and introduced Williams to his crowd. "This woman has the toughest PR job in America," said Buffington, after explaining that a recent NNA poll indicated 81% of newspapers surveyed had a Wal-Mart within their coverage area.

    "There's a wide gulf of understanding between the oldest business in town (the newspaper) and the youngest (Wal-Mart).

    "Sixty-seven percent said Wal-Mart had a negative impact on their communities. Just 10% said it was positive," said Buffington.

    "You guys are really a big bump right now, because you're angry with us and you feel we're not good citizens in your community," Williams responded. "We're a company in transition and we've got a bumpy road ahead. You guys are incredibly important. You're the voice, the face of your community."

    Williams offered up graphics that showed Wal-Mart operates 5,520 stores around the globe - 3,773 in the United States. They enjoy 110 million customer visits per week from 28 offices. This year, Wal-Mart projects profits of $10 billion on $285 billion in sales.

    "I expect that most of you here have a margin of higher than 3.5%," Williams jabbed.

    Wal-Mart will open 500 new stores this year, adding 100,000 jobs in the United States.

    "These are good jobs for the people who need them," Williams said. "Many of them are students, retirees - folks who bring in second incomes."

    Most are hired at $10-$13 per hour and are provided health care, profit-sharing, 401(k) plans and life insurance, she said, adding that thousands apply for the 350-400 jobs at each store.

    Williams offered a snapshot of where Wal-Mart finds itself today in an economy teetering on recession.

    "Target has just eaten our lunch in the last two years," said Williams, labeling the competitor "more fashion-forward" with more "cool stuff" than her firm.

    Its challenge is to break some core habits of the typical Wal-Mart shoppers. They only visit for the low prices; they buy the basics but don't "shop the store;" and they "don't believe Wal-Mart has everything they want."

    Williams, a Wharton Business School graduate who spent 11 years with AT&T, said Wal-Mart has entered the mature portion of its life-cycle.

    "Sam Walton was a leader during (the firm's) formulative stage. We've gone through the second phase - the normal stage of growing what you've already built and now we've become a little comfortable, a little bureaucratic.

    "How sustainable are we? Clearly, clearly not. We're going to start to decline. Instead, we want to add something new. Chaos results and we need to redefine ourselves ... begin doing things differently."

    Williams said the firm will be making efforts to "connect with environmental (groups), the anti-sweat-shop folks and try to become better citizens of the world."

    In a brave attempt at self-deprecating humor, Williams admitted that she'd recently used the phrase - "With great size comes great responsibility," to describe Wal-Mart's new direction. An audience member came to podium after her speech and suggested she's stolen that last line straight out of the "Spiderman" movie. She realized she had.

    During a followup Q & A session, Jeff Fishman, publisher of the Tullahoma (Tenn.) News, seized on Williams' statement that her company needs to make whole-store shoppers of people who come to Wal-Marts to buy the basics but don't "shop the store."

    Fishman said local newspaper readers are "literate, decision-making-type people with disposable income...The groups you're looking to grow in are exactly our customers."

    Williams agreed.

    Peter Wagner, publisher of the Northwest Iowa Review, said Wal-Mart's arrival in Sheldon and another Iowa community he serves revived "a dying town....You destroyed it first, but you are the honey that attracts the flies and dies just the opposite in the long term...In many cases, you are saving some of our communities as much as you are taking away those advertisers."

    When Wal-Mart Super centers come to towns across America, they drain about 70% of their trade from local merchants and reshape the character of the communities, retired Iowa State University economist Kenneth Stone told a national rural journalism conference.

    Stone's research also shows that the super centers have helped some local businesses that don't compete with Wal-Mart by generating traffic from a wider area.

    Stone, who has become known in some circles as "the Wal-Mart Man" because of his studies, conducted some of the first and most extensive research on the economic impacts of malls, discount stores and big-box building materials stores and various forms of Wal-Marts.

    A study in Iowa showed super centers hurt grocery, specialty and apparel stores but helped restaurants and service businesses because of the "spillover" effect of extra traffic.

    If Wal-Mart does wind up building near River Falls, it won't be a slam-dunk success story. About half our citizens pass by hundreds of shopping places each day.

    I'm convinced there's a passionate minority in this community that will never step through Wal-Mart's doors on principal - no matter how low its prices.

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