Wal-Mart and Globization

[Greg Brown <gregb@alaskapacific.edu>]

Visionaries:

"Progress" continues in the Last Frontier
as it did in Moscow. You can now go almost
anywhere and see nothing unusual, nothing
unique.  Just another big box.  First, Kodiak,
now Ketchikan....Barrow can't be far behind.

The McWal-Martization of the
world continues.

Signed...the Don Quixote of sustainable
communities doing battle with the windmills
of globization.

--
Greg Brown, Associate Professor
(gregb@alaskapacific.edu)
Alaska Pacific University
(907) 564-8267
Fax: (907) 562-4276


KODIAK STORES REELING (12/7/99)
The Associated Press

Kodiak ---Retail sales have increased 30 percent here
since Wal-Mart opened nine months ago, but local
retailers say their profits are down sharply, between 10
percent and 50 percent.

Wodlingers Drug and Photo, a fixture in downtown
Kodiak since 1940, is scheduled to close at the end of
December, manager Ernie Newland said. Newland said
the store's profits went into a free fall after Wal-Mart
opened. "If you lose a certain amount of volume, then you
are not in a profitable situation," Newland told The
Ketchikan Daily News.

Wal-Mart recently confirmed it plans to open a store in
Ketchikan in spring 2001. It will be approximately the
same size as the 67,000-square-foot Kodiak store, the
company said.  The island communities share a similar
population and economy.

Merchants in the two communities reacted similarly to the
news that Wal-Mart was coming. When the retailer
announced it was building a store in Kodiak, local
business owners were furious.

About 50 Kodiak residents, most of them merchants,
established a group called Kodiak First to prevent
Wal-Mart from building in the town. The group's efforts
backfired and spurred public support for Wal-Mart, said
Tom Merriman, owner of Mack's Sport Shop and member
of Kodiak First.

Some Ketchikan business owners also initially opposed
Wal-Mart's arrival. Some merchants, along with other
Ketchikan residents, formed the Ketchikan Community
Values Committee to block Wal-Mart's plans to build
here. Ketchikan consumers rallied behind the retailer and
the group is no longer active.

The chambers of commerce in both towns did not oppose
Wal-Mart's plans.

Many merchants in the communities were angered that
their local chambers did not take a stance, executive
directors of both organizations said.

"There were businesses who felt the chamber should
have been more vociferous in their opposition," said
Wayne Stevens, executive director of the Kodiak
Chamber of Commerce.

Kodiak business owners are pointing to their plummeting
profit margins as proof that their initial opposition to
Wal-Mart was justified.

"Everyone I've talked to has profits down in the double
digits," said John Whiddon, owner of Island Seafoods
and Mail Boxes Etc.

Wal-Mart store manager Angie Reese said the Kodiak
store is doing very well.

"People have been extremely receptive," she said.
Reese would not discuss the store's profits but said
"they've basically been what we projected."

Nearly everyone competing with Wal-Mart has felt the
pinch, Merriman said. "There isn't any store in the same
arena that hasn't seen its sales decline," he said.

All of the Kodiak business owners interviewed said they
have dropped their prices since Wal-Mart opened March
31, but only slightly.

An economic impact study conducted by Kenneth Stone,
a professor of economics at Iowa State University,
suggested prices in Kodiak would drop 10 percent after
Wal-Mart's arrival.

Wal-Mart appears to be soaking up Kodiak residents'
discretionary funds, Whiddon said. "The available
remaining dollars that people have are all going to
Wal-Mart," he said.