Wal-Mart Competitors Survive By Adapting

Business patterns in Latah County haven’t changed much since Wal-Mart chose Moscow for its first Inland Northwest store in late 1992.

Taxable sales in the county for the 1992 Christmas shopping season were about $33 million, according to the Idaho state tax commission. For the 1994 Christmas shopping season, sales were about $38 million, a 15 percent increase over two years.

The increase in sales has helped the Moscow area avoid the rash of small-business closings that sometimes follow Wal-Mart’s arrival in a small city.

However, as in other communities, competitors have made changes to survive.

One Moscow retailer having success is Tri-State Distributors, which does business in Coeur d’Alene as Tri-State Outfitters.

Owner and president Gerard Connelly researched Wal-Mart in Salt Lake City before coming to Moscow. He spruced up his Moscow store and refocused his product lines to specialize in brand names like Nike shoes that won’t sell to Wal-Mart.

“You can’t compete head-on with the largest retailer in the world,” he said. “So you’ve got to be No. 1 at something, and we’ve focused on being the very best with a lot of outdoor products.”

Connelly also started an intensive customer service program to counter Wal-Mart’s size and staff. He sends in “mystery shoppers” to his locations to check that all employees are following customer service guidelines. If they’re not, they could be fired.

So far it’s worked for Tri-State. In the 28 months that Wal-Mart has been in Moscow, the Tri-State store’s sales have been up 26 of those months, he said.

And the reason that Kmarts in Wal-Mart markets are struggling is simple to Connelly. “They’re going head-to-head on virtually everything, and it’s tough to compete with a company pulling in $2 billion a week.”