Opinions are mixed on Wal-Mart's impact on other local retailers

THIEF RIVER FALLS -- Every two weeks, on payday, Gerald and Darla Hitner make a 200-mile roundtrip from their Roosevelt, Minn., home to Walmart for groceries.

"Even considering the time and the gas, it's worth it," Gerald said as he unloaded a shopping cart containing videos, plants, medications, laundry soap, beauty products and even dirt, in addition to the groceries.

Wal-Mart is the first stop, but not the only Thief River Falls stop for the Hitners, who both work at Marvin Windows in Warroad. They also usually hit Kmart, a thrift store and Arby's.

The likes of the Hitners are in the middle of an ongoing debate surrounding Wal-Mart, the world's largest corporation that is coming to ever-smaller communities: Overall, does the mega-retailer hurt or help other stores when it arrives?

Wal-Mart opened in May 2006 on Thief River Falls' eastern edge and in August 2007 in Crookston, a similar-sized city 45 miles to the south.

Opinions are mixed on its impact on other retailers. Location plays a big role in determining winners and losers.

Many other opinions are unvoiced, as about half of storeowners decline comment, including one who said he didn't want to "appear like I am whining."

For the Hitners and many consumers, however, the bottom line is the bottom line.

"There's the wider variety and there's the convenience of getting it all in one place," Darla said. "But the big thing is, you can't beat the savings."

That's especially important, she said, during the time that Marvin Windows employees' work week was reduced from 40 to 32 hours. The 40-hour week was recently restored, they said, but there are no guarantees it will remain.

"That eight fewer hours means $800 less a month between the two of us," Darla said. "That's a lot."

Merchants in Roosevelt or Warroad aren't missing out because of the Hitners' twice-monthly shopping trips to TRF's Wal-Mart. Before its opening, the Hitners did their grocery shopping, every two weeks on payday, at either the Grand Forks or Bemidji Wal-Mart.

A greater pull

The Hitner family is an example of what is known in retail trade analysis as the "pull factor." It's the amount of money spent by shoppers who are pulled in from other towns.

Compared with numbers pre-Wal-Mart, TRF is attracting slightly more out-of-towners and has had a slight increase in taxable sales. In Crookston, the increases are more dramatic, almost doubling both its taxable sales and its pull factor from 2006 to 2008. Aaron Parrish, the city administrator, said Wal-Mart's addition has been "a net positive" for other merchants.

"Most of our retailers have been competing with big boxes for a long time," Parrish said. "Before, the big boxes were 25 miles away in Grand Forks.

"Now we have our own destination shopping place and people coming here have the opportunity to visit our other retailers, which wasn't the case before."

Dan Johannek, the head of Crookston economic development, said pull factor numbers show that many regional shoppers no longer bypass Crookston for Grand Forks. However, he concedes that Wal-Mart has "put stress" on downtown merchants by attracting traffic to its north end location along U.S. Highway 2.

Mike Moore, the Thief River Falls economic development head, said smaller towns in the region such as Roseau and Greenbush have had their retail damaged more by Wal-Mart than TRF.

Selling service

In Thief River Falls, Kari Mooney has numbers to show that Wal-Mart had an immediate impact on the Radio Shack store that is independently owned by her family.

"We went from 75 sales slips the day before Wal-Mart opened to 18 sales slips the day it opened," she said.

Their business is located next to Kmart, which has about one-third of the cars in its parking lot that Wal-Mart does. She said "you can't fight" Wal-Mart, for pricing nor variety.

"I can't sell a carton of milk here," she said. "If you need to get a lot of things, it only makes sense to stop at one place."

However, she said she can beat Wal-Mart in customer service and knowledge about electronics. What is aggravating, she said, are shoppers who come to her store to learn about products, then buy them at Wal-Mart because of the lower price.

"If I continue to help, maybe they'll come back (to buy)," she said.

Finding a niche

The Maurice's clothing store was the first downtown TRF retailer to follow Wal-Mart to the edge of town. Next was the Legends sporting goods store, which was next door to Maurice's downtown.

"The first week Maurice's left, our sales went way down," Legends owner Barry Dowers said. "We could see the new traffic pattern."

Legends moved to a strip mall that was the former Pamida, which closed within days of Wal-Mart opening. The Ben Franklin downtown lasted about two years after Wal-Mart arrived. Its expansive building downtown remains empty.

Dowers said his store is an example of the best game plan when Wal-Mart arrives: Don't try to compete with them. His sporting goods are higher end than Wal-Mart's, he said. Plus, there is an odd mix of products in the back one-third of his retail space -- quilting supplies.

"When Wal-Mart arrived, it had quilting supplies to compete with Ben Franklin," Dowers said. "When Ben Franklin closed, Wal-Mart dropped its quilting department. So, we added one.

"That's why we're the only sporting goods store in the country with a quilting corner."

Entering its fourth year at the new site, Dowers said business has grown each year. He said the store attracts more out-of-towners than local residents, evidence of Wal-Mart's drawing power.

"I think Wal-Mart has been good," he said. "I don't think it has eliminated any businesses, but it may have finished off some that were already bleeding."

Downtown stores have ups, downs

Ace Hardware in downtown Thief River Falls has existed since 1945, "So, we know what people want," owner Ron Kalinoski said.

He said his store struggled when Wal-Mart first opened, but business has been "really good" the past two years. The down times may have been more about high gas prices and other factors than Wal-Mart's appearance in the marketplace, he said.

LeAnn Nelson, owner of the Diamonds & Designs downtown, said she's not sure whether to blame Wal-Mart or a sluggish economy for a business downturn. "I hate to say it, but it probably has hurt us some," she said.

"They sell milk, eggs, jewelry, flowers and a lot of other things, so they compete with everybody in town."

She said it's difficult to compete with a chain store that's open 24 hours a day, seven days a week, She can't keep the long store hours that shoppers have grown accustomed to with the chains. Moore said that's a problem with most mom-and-pop operations.

"Retail hours can be worse than milking cows," he said.

When asked if other local retailers are better off with or without Wal-Mart, Moore answered the question indirectly:

"What I do know is that if we didn't have a Wal-Mart here, our populace locally and in the area would go where there is one."

Reach Bakken at (701) 780-1125; (800) 477-6572, ext. 125; or send e-mail to rbakken@gfherald.com .

1/2: Barry Dowers manages Legends sporting goods in Thief River Falls. Herald photo by Eric Hylden

2/2: Gerald and Darla Hitner of Roosevelt, Minn., unload groceries and other items recently after a shopping trip to Wal Mart in Thief RIver Falls. The couple makes the trip every other week. Herald photo by Eric Hylden.