Here’s the theory: It’s better to pick your own pockets, than to have someone else pick them. So Wal-Mart overbuilds in a given trade area, and lowers its own store sales in the process. It’s overall sales increase, but its productivity per square foot declines. Residents in Elyria, Ohio are watching it all happen. This city of around 56,000 people just saw a new grand opening of a 207,000 s.f. Wal-Mart supercenter on Chestnut Commons in April, 2007. To build this store, Wal-Mart needed to construct an 8 foot high brick wall, 280 feet long, to buffer the huge store from the homes nearby. The Ohio Environmental Protection Agency also complied by giving the developer the right to build on wetlands. This Chestnut Commons store is within easy driving distance of an existing Wal-Mart Discount store on Midway Boulevard, which is 130,000 s.f. On top of all this, Wal-Mart has proposed another 184,0000 s.f. superstore just north of the Midway Mall on Griswold Road. This week, the company said the opening date is being pushed back at least a year — most likely to give the Chestnut Commons supercenter a chance to build its market base. But when the Griswold Road supercenter opens, the “old” Midway Boulevard Wal-Mart discount store will close. In announcing the one year delay, a Wal-Mart PR spokeswoman told The Chronicle newspaper, “We’re committed to our customers in Elyria. There will be no disruption in service to our customers at our Midway store while the Griswold store is being built.” The Griswold Road store was supposed to break ground last month, but there has been no activity on the site. “We hope to start the process in spring 2008,” Wal-Mart predicted. But back at the “old” Wal-Mart discount store, things have definitely slowed down. The Chronicle reports that finding a parking space at the Midway Boulevard was easy now that the larger Wal-Mart supercenter at Chestnut Commons is siphoning off customers. One shopper at the smaller Wal-Mart told the newspaper, “I come here because it’s in and out. It’s not as busy (as Chestnut Commons).” But fewer shoppers has led to cuts in employee hours at the Midway store. One Wal-Mart worker admitted that some workers are transferring out — taking demotions to do so. The “associate” told The Chronicle that she was making $9.40 an hour for a 40 hour week at the old store, but her hours were just cut to 36 hours — which means she will lose around $2,000 a year in salary. She said she could have transfered to the store in Oberlin, Ohio, where she would earn $8.60 an hour — an 8.5% pay cut — because it is in a rural area. A Wal-Mart spokesman did not deny this math, but said that Wal-mart wages reflect the communities where they’re located. Elyria Mayor Bill Grace said he was “98% sure” that the new Wal-Mart at Griswold Road would be built. That means Mayor Grace is a 2% visionary.
I first heard of Wal-Mart in Elyria in September of 2005, when residents wrote me to protest the first Wal-Mart supercenter. Now they are in the shadow of a second one. Elyria today has 9 Wal-Mart stores within 20 miles, including the two existing Wal-Mart stores. When the new supercenter on Griswold Road finally does open, several things will happen: 1) the existing discount store will close 2) some workers will transfer, some will quit, and some will lose hours or pay 3) Wal-Mart’s total sales in Elyria will rise, but its sales per square foot will drop. When Wal-Mart opened its Chestnut Commons superstore, the company said that it had received more than 1,000 applications for 325 new positions. They claimed the average wage at Wal-Mart for full-time associates in Ohio was $10.40 per hour. “People know that the opportunities for advancement and a diverse workforce make Wal-Mart a great place to work,” Wal-Mart noted. Thirteen of the Elyria store’s associates have been with Wal-Mart for more than 10 years, the company bragged. Because of this over-building mentality, many workers will lose out, and the company’s productivity will drop, as it continues to pick its own pocket. For an earlier story, search Newsflash by “Elyria.”
