Wal-Mart Casts Long Shadow Hometown Merchants Learn To Coexist With Retail Giant

When retail leviathan Wal-Mart eyes small-town America, the business cores of those communities have two choices:

Immunize the downtown retailers by sprucing up storefronts and selling more specialized wares. Or, die a swift, price-driven death.

Five towns in the Inland Northwest now sport huge, block-shaped Wal-Marts. Next spring, Ponderay, just north of Sandpoint, will join the club.

Moscow and Colville were among the first towns in Eastern Washington and North Idaho to experience the Wal-Mart phenomenon when stores opened in 1993.

Hometown businesses in both towns seem to be surviving, but for contrasting reasons.

Small businesses in Moscow had competed against large retailers for years, so they knew how to compete. In fact, the biggest loser after Wal-Mart arrived was discount giant Kmart.

In Colville, previously innocent to mega-retailing, the local merchants that line downtown are still learning how to fight. But thanks to an influx of new shoppers lured by Wal-Mart they seem to be withstanding the competitive blows.

Image problems in Moscow

One advantage local businesses have against Wal-Mart is image - the wholesome underdog vs. the menacing giant. This has been most vividly illustrated in New England, where small towns have waged legal battles to keep the Arkansas-based chain away.

Northwest towns have been somewhat more receptive, but Wal-Mart’s image still draws high negatives in some quarters - despite its cheery front-door greeters.

The discounter got off to a bad start in Moscow, said Bob Greene, bookstore owner and Moscow Main Street tenant for more than a decade.

An under-the-table zoning change soured residents in the congenial college town immediately. Dropping the big store on the Moscow-Pullman Highway turned an already choked two-lane link into a parking lot at times.

Residents did rise up to oppose the store, said Greg Brown, a University of Idaho employee and local activist. “We wanted to have them come to us on our terms, not theirs.”

Steeled by years of competition with Kmart and the Palouse Empire Mall, downtown merchants are still standing.

Wal-Mart’s success has been hard to quantify. Taxable sales numbers from the Idaho State Tax Commission show some retail categories up, others down since the store opened.

Wal-Mart’s predictions of drawing shoppers from around the region never materialized, Greene said. An even-larger Wal-Mart opened soon after in Lewiston, effectively limiting the Moscow store’s reach to Latah County and into neighboring Pullman. Soon, a ShopKo discount store will open in Pullman.

In the other corner, downtown remains not healthy, but subsistent.

A new fly-fishing shop and a national printing chain have recently opened, Greene said.

Professional services just as doctors, lawyers and real estate offices dot the Main Street boulevard. While Greene remains pessimistic about the economic future in Latah County, downtown will likely endure, he said.

It seems the giant retailer’s biggest victim to date has been the other giant retailer in town. Moscow’s Kmart store, with scribbled cardboard signs in the front windows thanking locals for shopping the store, closed two weeks ago.

The demise of Kmart is not unusual with a Wal-Mart nearby. Kmart’s corporate offices blamed poor sales at the Moscow store, sales most likely eaten away by the shining Wal-Mart just up the road.

Kmart competes with Wal-Mart on a variety of product lines, and though Kmart is big, Wal-Mart is far bigger. Bigger means the ability to beat any price, even if it means selling a product for less than the store paid for it.

Retail shakeout continues

The other major retail player in Moscow is the Palouse Empire Mall. One mall employee called Wal-Mart a “dirty word around here.”

With its Lamonts anchor in bankruptcy nationwide and an Ernst store that competes head-on with some Wal-Mart product lines, Greene said the mall stands to lose far more than downtown.

Carl Hall, president of the mall’s trade association, says mall traffic did take a dip when the store first opened.

“But since then mall traffic’s been pretty good for us,” he said, pouring a mocha drink at his Orange Julius store in the mall. “My business is especially sensitive to traffic, and I’ve been doing better each year.”

Not all local business owners think the Wal-Mart retail shakeout is over in Moscow.

Gerard Connelly of Tri-State Distributors thinks more stores will wilt under the pressure.

Connelly knew that his general merchandise business couldn’t play ball with the Arkansas-based company. When Wal-Mart announced its intentions to dominate the Moscow retail market, Connelly went into action, spending three days scrutinizing Wal-Marts in Salt Lake City.

By expanding and upgrading his store just east of the proposed site, Connelly tried to stake his niche. Since many image-conscious national brands won’t do business with WalMart, Tri-State would now carry those brands almost exclusively.

“Instead of having a few kinds of all types of different shoes, we carry Nike athletic shoes, and a lot of them,” Connelly said. “Our sales have been up 25 of the 26 months that Wal-Mart has been here.”

While some like Connelly and civic activist Brown won’t shop Wal-Mart, many Muscovites - especially students - do.

“I get a lot of school supplies there because, well, they’re cheaper,” said Deni Cartwright, a senior at U of I from Bonners Ferry. “They’ve got a big tent set up for students with all sorts of stuff in there. And a lot of pop.”

Colville seizes opportunity

The delicate downtown of Colville - population 5,000 - was far more likely to be plundered by the coming of Wal-Mart.

The big difference for Colville was that a Wal-Mart was viewed as an economic opportunity, said Jim Wallace of the local Job Service and a longtime board member for economic development agency TRICO.

“Our big puzzle was getting the Canadian traffic headed for Spokane to stop here, or at least slow down,” Wallace said. “Wal-Mart was our answer.”

Since the store opened in August 1993, Canadian traffic is up immeasurably, he said. “You can just sit in the parking lot there and count the Canadian plates,” he said. “It’s made an incredible difference.”

Now a Super 1 supermarket, an Arby’s and a Payless Shoe store abut the Wal-Mart about a half-mile north of town. Plans for a hotel are in the works, Wallace said.

Unlike many towns in the Midwest, Main Street Colville did not stand idle.

For nearly three years, a devoted dozen retailers met every Thursday morning to plot their defense against Wal-Mart, said Donna Stewart, who owns Mosby’s Menswear.

The group wrote and received renewal grants and hired expert retail consultants from Seattle and California. The merchants took a frank, probing look at their stores and how they ran them, she said.

“What the consultants tell you is that you need to find a niche to survive Wal-Mart,” she said. “And that’s good advice. But what they don’t tell you is that Wal-Mart will soak up like a sponge all your walking traffic in downtown.”

Some Colville general retailers couldn’t make it in the months following Wal-Mart’s arrival, Wallace said.

But the revitalization of Main Street energized the remaining merchants. The group got matching grants to give storefronts a face lift. They created a common court area featuring live music. They market the downtown regionally as a great place to stop and shop.

“Just like when the people of Northridge (Calif.) had that terrible earthquake - the people there just got used to shopping outside of town while they rebuilt,” she said. “When the stores in Northridge reopened, they had to figure out how to get their customers back. Northridge had its earthquake, and we had Wal-Mart.”

None of the renewal efforts in Colville would have happened without Wal-Mart’s presence, both Wallace and Stewart agree.

Sandpoint offers little resistance

Due east across the state line from Colville, machines scrape dirt and prepare to lay the foundation of Ponderay’s Wal-Mart store.

The Sandpoint area put up perhaps the least resistance to Wal-Mart of any community in the Inland Northwest.

Downtown merchants met and talked about the problems it would create. But like Moscow, Sandpoint’s downtown had weathered a Kmart in Ponderay since September 1990. Perhaps hauntingly for the Ponderay Kmart, the new Wal-Mart is rising across the street from it.

At the planning and zoning meeting to discuss the Wal-Mart, only a handful of merchants were there to oppose the plan. In Wal-Mart wars, that’s tantamount to surrender.

The Chamber of Commerce in Sandpoint feels Sandpoint’s unique downtown shops are specialized enough to withstand the retailer.

Back in Moscow, Greg Brown feels that Wal-Mart would have its way with any Inland Northwest community.

“I don’t think there’s a town around here with enough power to prevent a Wal-Mart from coming,” he said. “The political power structure is controlled by business interests around here. Citizens don’t even know when a Wal-Mart is coming, and if they don’t find out, it’s just too late.”

The lesson for future downtowns staring directly at a Wal-Mart, TriState’s Connelly said, is precise research on what Wal-Mart carries and an emphasis on over-the-top customer service.

Tri-State’s future lies in its TriState Outfitters stores. The comparatively small stores sell specialty outdoor gear and sporting goods.

Connelly has stores in Coeur d’Alene, Lewiston and Moses Lake, the later two towns being places with Wal-Marts.

“They’re doing exceptionally well,” he said. “The key to our growth is not to be positioned against Wal-Mart.”

, DataTimes ILLUSTRATION: Color photo Graphic: Wal-Mart’s impact

MEMO: This sidebar appeared with the story: OPENING DATES Inland Northwest Wal-Marts and their opening dates: Moscow January 1993 Colville August 1993 Omak April 1993 Lewiston August 1993 Moses Lake July 1993