The Walmart Trophy
It is fascinating to watch Walmart slowly implode. I am not sure people realize just how fragile their business model...
Posted by Strong Towns on Tuesday, August 16, 2011
Lots of people have predicted the demise of Walmart. Mostly it is wishful thinking; people who dislike Walmart are inclined to think it has no future, despite signs that it does. I don't think Walmart is going away any more than I believe American cities, along with state governments, are going to suddenly stop propping it up. Yet it's fascinating to watch their really fragile business model fraying on the edges.
Walmart builds cheap buildings in order to sell Americans cheap stuff. Joe Minicozzi has documented brilliantly how, the cheaper the store and the more land it wastes, the lower the taxes. The Walmart land development model has taken the concept of "buying in bulk" and applied it to the land in your city. Their goal -- lower every cost -- is directly at odds with the financial health of your community.
Which is what has always made the embrace of Walmart by Small Town America such a strange phenomenon. These are small systems. We generally know the grocer and the shoe salesman and the others being put out of business, yet we fall all over ourselves to subsidize their competition and their business model. I get it -- low prices are really seductive just as more stuff in and of itself is seductive -- but it is still strange to drive through a small town full of boarded up shops only to get to the Walmart out on the edge.
All of this makes the recent news by Walmart that they are closing some of their most fragile locations stranger still, in a very tragic way.
The Town’n Country grocery in Oriental, North Carolina, a local fixture for 44 years, closed its doors in October after a Wal-Mart store opened for business. Now, three months later -- and less than two years after Wal-Mart arrived -- the retail giant is pulling up stakes, leaving the community with no grocery store and no pharmacy.
Though mom-and-pop stores have steadily disappeared across the American landscape over the past three decades as the mega chain methodically expanded, there was at least always a Wal-Mart left behind to replace them. Now the Wal-Marts are disappearing, too.
“I was devastated when I found out. We had a pharmacy and a perfectly satisfactory grocery store. Maybe Wal-Mart sold apples for a nickel less,” said Barb Venturi, mayor pro tem for Oriental, with a population of about 900. “If you take into account what no longer having a grocery store does to property values here, it is a significant impact for us.”
Walmart buildings are designed to last 15 to 20 years. Simply the city's commitment to maintain the necessary infrastructure extends generations beyond that, let alone the cost of policing and other needed services. If cities did the math on these kind of developments, not another one would ever be built.
(Top image from Wikimedia)