It’s impossible to deny the popularity and influence of Wal-Mart. Almost everywhere you go in this country, you’re likely to encounter the Arkansas-based retail giant. Founded in 1962, the company has since spread throughout the world.
This week a brand new Wal-Mart Supercenter celebrated its grand opening in Pittsfield Twp. on the corner of State Street and U.S. 12 just outside of Saline, despite years of protests and petitions from the local community. With a population of roughly 8,000, the new store raises a number of questions for the local community.
Whenever a new Wal-Mart is built in a small community it is often met with similar opposition from local residents afraid of how the addition of the giant retailer may affect local businesses. For the residents of small towns like Saline or Ypsilanti the primary concern is competition.
Wal-Mart is the poster child for capitalism and after decades of rapid expansion and controversies regarding workers’ right, the company has been established in the American psyche as the villain of the retail world.
By offering groceries, clothes and other products for anywhere between a few cents to a few dollars cheaper than average, Wal-Mart forces its competitors to also lower their prices in order to retain their customers. But many small-scale businesses can’t afford to slash prices as much as the retail giant and they quickly go out of business.
“Most experts agree that the biggest fear in local markets is grocery,” said Ed Sidlow, professor of Political Science at Eastern Michigan University. “Local groceries in Saline, like Country Market and Busch’s have to be careful.”
According to Sidlow, grocery stores tend to be the hardest hit by the expansion of a store like Wal-Mart because the only difference tends to be price.
“A Wal-Mart offers a full battery of groceries, sometimes cheaper,” he said. “If you’re committing an hour to grocery shopping you might commit that hour to Wal-Mart instead of Busch’s, especially if it saves you money.”
For the most part, shoppers can find essentially the same products at both Wal-Mart and a local grocer, which means the decision comes down to money.
“From purely a local business aspect it’s going to be hard to see Wal-Mart as a good thing,” said Richard King, director of the Center for Entrepreneurship and the Small Business Development Center at EMU’s College of Business. “But for a customer it could be a positive thing.”
In an economic recession it’s easy to see Wal-Mart as more of a saint than a monster. For most families on a budget what might seem like a thin-margin in savings actually adds up overtime and really gives the advantage to Wal-Mart. After all, not everyone can afford to shop at Whole Foods, and it only makes sense to go for the cheapest deals.
“I think that those people who are most affected by the economic downturn are going to stretch their dollar as far as they can, and anyone who criticizes them is crazy,” Sidlow said.
Unfortunately, this creates a problem. On one hand, by shopping at Wal-Mart people are almost guaranteed to save money and even the smallest savings can reduce stress for families really feeling the budget crunch. But getting into this habit of always going to the large, national retail chains can be crippling to local economies.
When Wal-Mart opens a new Supercenter, like the 200,000 sq. ft. building that opened Wednesday near Saline, small stores that may have been in the area for generations and have become a staple of the local culture suddenly vanish overnight. Each year it seems more and more small businesses are disappearing while companies like Wal-Mart are still expanding, which could result in the death of the small business and the homogenization of businesses in America.
“I think that independent and small merchants are hurt by these kinds of stores, but they are hurt by Meijer and they are hurt by Target and it’s just kind of piling on,” Sidlow said.
Though Wal-Mart is the most notorious, it certainly isn’t the only large-scale department store that creates stiff competition for smaller, locally owned businesses. In this Ann Arbor area alone there are three Meijer stores, two Target stores and numerous other large corporate retailers that offer roughly the same products and services. So why is Wal-Mart almost exclusively singled out?
A big part of it is the sheer size of the corporation. Though Meijer uses many of the same tactics, it is primarily a regional corporation headquartered in Michigan, while Wal-Mart is the world’s largest private employer with locations all across the globe.
Despite its reputation as a large employer, Sidlow said he believes the company’s poor record for workers’ rights hurts its image, especially in this part of Michigan.
“One might wonder if this is one of the Wal-Marts where battles for collective bargaining might take place,” Sidlow said.
“The notion of unionization is commonplace in Southeastern Michigan and that is one area which has caused the Wal-Mart corporation considerable trouble,” he added.
But according to King, it’s still possible for small businesses to exist side-by-side with Wal-Mart, as long as they are able to offer a product that makes them unique. Even in the current economic environment there are still many consumers looking for products which Wal-Mart doesn’t have.
“There are lots of people that want lots of things other than what Wal-Mart sells,” King said. “Those products and services are more likely to be sold by local businesses.”
While many businesses that try to go head-to-head with Wal-Mart are likely to see a drop-off in customers, some local businesses able to offer high quality, specialty products can still be successful.
“They shouldn’t try to compete with Wal-Mart on price and volume because Wal-Mart is very good at what they do,” King said. “But those who find the right place will do well.”
