February 26, 2006 in Business

Upset at Wal-Mart? Take a closer look

Jan Quintrall By Jan Quintrall
 

Well, Walla Walla fought Wal-Mart and won, sort of. The world’s largest retailer simply moved a couple of blocks away, opening in 2001 in College Place, Wash.

Walla Walla won its battle but lost that tax revenue.

More interesting about this new neighbor was the reaction of the area’s Downtown Merchants Association. Its members decided they couldn’t beat Wal-Mart at the same game, so they didn’t try. The downtown merchants focused instead on higher quality, better customer service and a better shopping experience.

Did that stance attract any of Wal-Mart’s “price-only” shoppers? No, but people who were willing to pay a bit more or were looking for quality over quantity kept coming downtown. End result: a couple of smaller stores closed, but others are thriving. There have also been a couple of business relocations into the downtown corridor.

Watching communities wring their hands over the possible arrival of a Wal-Mart has me confused, but that’s not the only large company we as a region are scrutinizing these days.

Almost everyone is taking shots at Wal-Mart on the South Hill or Avista and its CEO compensation. Interestingly, on one hand we’re attacking Wal-Mart for low-paying, no-benefit jobs, and on the other we’re getting equally angry about the pay package of Avista’s CEO.

Consider this:

• The BBB had a vacant vice president position last year; if I wanted to entice someone to leave a position to take that job, incentives, bonuses and such would be necessary to place on the table.

Last week, we ran an ad for an entry-level position and the resumes hit almost 100. Hmmm, so how many applications will Wal-Mart receive when they open a new store in the area?

• The marketplace sets the bar, and it should. When the time comes that Wal-Mart can’t get people to fill jobs, it will raise the bar.

When I left Colorado Springs in 1998, entry-level fast food workers there were paid close to $15 an hour, because that’s what the market dictated. Why do so many people drive across the border from Idaho into Washington each day? What effect is Washington’s high minimum wage having on Idaho employers?

• Why is there such a groundswell to make Wal-Mart pay health care costs? Yes, our health care system is in trouble. But we need to look at all the issues, and not find just one large corporation not offering medical coverage to attack. We all own a piece of this monster, not just Wal-Mart.

• Wal-Mart doesn’t open stores just to have them. The corporation is very good at assessing markets and demand. Everyone jumps on the beat up Wal-Mart bandwagon, but the stores’ parking lots are full and sales continue to increase.

Stop buying and the corporation will stop thriving.

The hard truth is, however, that many people can’t make a choice to spend a bit more to support a non-Wal-Mart retailer, because there simply isn’t enough money in their family budget.

• On the other end of the spectrum, we have Avista and its bonus structure for its CEO. Allow me to use a sports analogy: If everyone could be Shaun Alexander, the Seahawks star would be making minimum wage.

So, Avista’s board wanted a leader who could step into a huge challenge, deal with regulatory issues and fluctuating fuel costs and move the company back to profitability and health. Oh, yeah, there are billions of people out there who can pull that off.

If I want that kind of talent, I need to pay for it because if I don’t, the next company will.

Is more than $2 million in compensation too much? Depends on what the competition is offering. The market determines the pay at the top and at the bottom.

Just like running backs in the NFL, there are not a whole bunch of players with proven track records. In this rarified air, the choices are few and the money is big.


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