Superstores&8217; opening brings mixed results to host towns

Published 12:00 am Wednesday, March 22, 2006

VIDALIA &8212;For a town of 5,000 Super Wal-Mart means growth.

It means an estimated $600,000-plus in sales tax. It means 200 jobs. And it means potential for further economic development.

Vidalia officials are excited about the new life Wal-Mart will bring to town once its already under-construction, U.S. 84 building is completed.

Email newsletter signup

Mayor Hyram Copeland said the break on electric bills the city promised Wal-Mart is well worth it and will help the city continue to grow.

And it&8217;s not easy to find many Vidalia residents opposed to the idea of one-stop shopping for cheaper prices. Local businesses have some worries, but no one&8217;s hitting the panic button.

But there&8217;s going to be an impact, studies say, it may just be a few years away.

A University of Iowa study on the impact of Super Wal-Marts in Mississippi counties with less than 100,000 people showed extra money for the towns, less for the local businesses.

General merchandise sales, including food, increased by an average of 40.2 percent in rural counties in the first year after their Super Wal-Marts opened. That increased to 41.6 percent in year three before declining slightly in years four and five.

But sales of food from existing grocery stores dropped 10 percent the first year after a Super Wal-Mart&8217;s opening. The decline continued, and five years after the opening, average food store sales were 19.2 percent lower compared to the year the Super Wal-Mart opened.

Sales at building materials stores decreased by 8.2 percent in the first year to 14.9 percent in the fifth year; in retail stores not included in the above categories, sales went down 2.3 percent the first year and were down by 11.9 percent the fifth year.

Natchez and Ferriday can attest to these facts.

Barry Loy of Supermarket Operations, which operates five grocery stores in the Miss-Lou, remembers what the grocery landscape was like before Super Wal-Mart opened in 1995.

At least one grocery store, County Market, closed around the time the Wal-Mart opened its doors. A few years later, the Kroger across the street from the new Wal-Mart would close, too.

Loy&8217;s company ended up buying the Winn-Dixie at U.S. 61 North and Palestine, making it a second Natchez Market.

And he remembers well the measures the Natchez-based chain had to take to stay competitive, including laying off some of its employees and cutting whatever costs it could.

Super Wal-Mart&8217;s opening &8220;definitely changed the landscape&8221; of the grocery business in Natchez, Loy said. &8220;We&8217;ve never done what we did before Wal-Mart.&8221;

In Ferriday, the story is even more severe. The economic growth inspired by Wal-Mart is a point anyone who took a stroll through downtown Ferriday in early 1987 would contest.

Dress shops, hardware stores, a shoe store a five-and-dime store all thrived on Louisiana Avenue.

&8220;It was booming, I had to move because they sold my lot to KFC,&8221; said Fred Graves of Graves Hardware.

Then Wal-Mart moved in and the dynamic changed.

First the dress shops closed, unable to compete with the cheaper goods provided by the giant retailer.

Then the shoe store and the hardware store shuttered.

&8220;The town started dying out,&8221; Graves said. &8220;Businesses kept going under, I don&8217;t know if they used it as an excuse or what, but it started dying out.&8221;

Graves said he has been able to stay in business by doing things that Wal-Mart doesn&8217;t do, like offer charge accounts, and paring away all the overhead from his business.

&8220;It&8217;s just my wife and I,&8221; he said. &8220;We don&8217;t pay rent and don&8217;t have employees, we&8217;re a real mom-and-pop.&8221;

But a new Wal-Mart doesn&8217;t always hurt the local economy, and the end result may be a consequence of the area&8217;s economic vitality and not Wal-Mart at all.

City officials in McComb, where a Super Wal-Mart opened in 1998 and Oxford, where one opened in 2002, both said they can&8217;t point to any businesses that closed because the store came to town.

Sam Mims Sr., McComb city administrator and father of the southwest Mississippi legislator, said the city saw an increase in businesses coming in from a radius of 10 counties and parishes.

&8220;I&8217;m sure it had to detract from some of our businesses, because the (retail) pie is only so big,&8221; Mims said. &8220;But I don&8217;t recall any negative comments, and I can&8217;t point to any businesses that closed because of it.&8221;

Mims also said he doesn&8217;t recall any backlash from locals over Super Wal-Mart coming to town.

In Oxford Mayor Richard Howorth said arguments against a Super Wal-Mart were vehement, mostly focusing on the building&8217;s size and appearance and its location.

Inadequate setbacks from property lines and the fact that Wal-Mart cut down trees that served as a buffer between it and a highway coming into town were also points of contention, he said.

But Super Wal-Mart hasn&8217;t hurt the local economy, he said.

&8220;Fortunately Oxford is economically and culturally robust enough that it didn&8217;t come in and wreak havoc,&8221; Howorth said.

Plenty of other nationally-known businesses have sprung up on the west side of Oxford in addition to Super Wal-Mart.

But Howorth said Super Wal-Mart isn&8217;t the reason.

&8220;We&8217;ve got Home Depot over there now, and Office Depot&8217;s about to open,&8221; he said. &8220;But I think all of this is simply because Oxford is a growing market.&8221;