What happens to a tiny town when Walmart disappears
washingtonpost.com
washingtonpost.com
Old mining and factory towns are extremely sad. When the region stops generating the value that drove its initial growth, the result is an endless downward spiral to widespread poverty. Lots of former workers are unable to make a transition to another job. The only real money left is in the retirement accounts of those who "made it" before the layoffs, and the only jobs available are in the service industry catering to these folks. That money and those jobs eventually fade away. The youngest and most capable workers see the writing on the wall and get out of Dodge. Others hang on as long as they possibly can.
Of course Wal-Mart can't make a profit selling a full-size warehouse full of cheap goods in an area like this. Nobody can. But now that they're gone, somebody will succeed with a small, overpriced grocery store that pays local teenagers minimum wage and has a produce section the size of my bathroom. And even that store will go downhill over time as the people with money continue to pass away and move out.
I wish I knew the solution to this problem.
Your typical "field" in the Midwest is a quarter or 160 ac. Iowa has a yield of around 170 bu/ac and a typical farmer might have around 8 quarters. If corn is around $4, that works out to 8x160x170x4 = $870k revenue by a farmer for a year (and almost 2x that in 2012!)
As to why small communities can't seem to solve the fresh produce problem, I'm at a loss. I live in a rural farming community and we can't get fresh produce. I can't decide whether to order produce delivered from Austin or start a local produce delivery myself. Currently we make a weekly trek to civilization and fill our minivan to bursting with food and supplies.
I don't think that was the parent comment's point. The factories and mines created the towns and thereby generated the demand for the Walmart. Now those factories and mines no longer exist, so Walmart is no longer needed.
The land isn't productive to society as a whole anymore, and therefore should be repurchased (at favorable rates to society; but still enough to allow the locals to escape the area) and returned to being a nature reserve. This way the area is returned to the commons and the suffering of all life is reduced.
The article also points out that the town had already shut down before Walmart had come in. But it still seems to take the angry-corporate-greed angle. This wasn't a place where Walmart came in and displaced businesses. This is where Walmart came in where there had been nothing.
People always like to play the "there's no way this isn't making money" card like companies like to close things that make money.
The article also doesn't really talk about how most of the closures are really Walmart Express stores. If BestBuy decided to end BestBuy Mobile, it's more a decision about the format than locations.
Walmart is closing 12 Supercenters and 6 regular Walmarts. The other closings are other formats. For example, Walmart is killing off their Express stores which number 102. The second most closings is for the Neighborhood Markets which (from the map) are in urban areas where people will have other options.
From a PR perspective, Walmart should have announced that it was killing off the Express concept independent of any other closings. Close those now. Then, over the next 18 months, close a single Walmart each month. Saying that you don't like the Express concept is just a business direction. Closing a Walmart each month isn't national news. And just trudge along with some of the rest. By closing 154 all at once, it becomes news and it becomes "Walmarts" that are being closed when the vast majority are Walmart Express stores that were an experiment started in 2011. The majority of the locations being closed are an experiment where Walmart tried to create a CVS-sized store.
It's going to be crappy for a few places. But to be fair to Walmart, the residents of Kimball say that all the other shops had left before Walmart even came in. Big numbers make for news and Walmart should have been smarter and shuttered the Express stores independent of any real Walmart closings. If they had shuttered 102 Express locations and then just closed a Walmart here and there, people wouldn't make news out of it because it wouldn't be big numbers. There would be news about how Walmart can't do smaller-format stores, but that's a very different story from the Post article. The real story here is that Walmart didn't manage the closings in a PR-friendly way.
Maybe they don't care about the short-term bad PR.
Maybe they figure they actually benefit from some PR that complains about the bad things that happen to the local economy when Walmarts close. That will help them in negotiating with other towns and employees/unions elsewhere.
If Walmart vanished, almost no one in town would miss it because everyone complains about how high the prices are compared to local stores, and how little there is on store shelves; and what local stores can't sell us, we'd just order online.
If someone showed up with a time machine, and told me Walmart went out of business 10-15 years from now, I'd believe it. If all Walmarts are mismanaged as badly as this one, how does that company even exist?
The only thing I go there now for is paper towels and toilet paper and cat litter. Everything else I use, they either don't carry, or I can get cheaper elsewhere.
I've read a lot of complaints about Walmart, but never once about how they are expensive. Fascinating.
Basically, no one, not even the Store Manager, has much flexibility in store pricing. Walmart corporate punishes stores by taking unapproved differences in pricing out of the store budget, and stores are all generally severely under-budgeted to begin with, so no store, especially not ours, is going to do it.
In poor areas like mine, Walmart doesn't give the store the flexibility to compete. Not that I care about Walmart's bottom line, but that can't be very cost effective for those stores.
That might be the impression you get from your circles (and it's also unfashionable to be known to shop at Walmart at certain circles as well).
But it's not necessarily the actual dependency status of the whole 8/15K people on having that Walmart.
I know what you mean about it being unfashionable to shop there, but the thing is, I'm usually the one saying that it's unfashionable, no one else I know agrees with me on that; I'm a citizen of the Internet, they are not. Most people I know don't care if it is Walmart, they just want to exchange currency for goods and services.
But like, most people in town just want to put food on the table and whatnot, and meat prices are, for example, about a buck higher per pound for beef (not that anyone in town can really afford beef at current pricing; all the stores around here have shrunk what beef occupies in the meat case due to that), they have a very poor selection of fruits and vegs, the bakery sells the absolute worst tasteless and sometimes stale products, and Walmart brand foods are absolutely disgusting sometimes and aren't even cheaper than other store's store brands.
Walmart just seems to do everything wrong. Everyone I've met around here seems to have some story of their own on why this is true, I've never met anyone who liked shopping there.
Around here, food stamps come I think twice a month (you're put into one cycle or the other), most of the town I swear qualifies for at least the minimum for it, and there's also social security and welfare. On those days, our two main local grocery stores are packed, Walmart doesn't really seem to have anyone. In fact, of all the years I have lived here, I have never seen Walmart packed.
Yeah, none of this is scientific, it's all anecdotal evidence. But I've lived here so long, I remember when we never had a Walmart, and there has never been a time I can remember when anyone has been excited about that.
You know what personally excites me? When Amazon has a product I buy become available for Subscribe and Save, so I can get it for 15% less, then another 5% less because of the Amazon store card, pay slightly less for it than anywhere else locally, and then not have to actually go to the store and buy it because an UPS guy drops it off for me.
And that entire model right there? Terrifies the shit out of Walmart.
Ok so I'm still a bit pissed off about that. When I saw the story on Whitewright texas [1] the thing that struck me was not that Walmart leaving would leave them without a grocery, but that the previous store chose not to re-open, nor was anyone stepping up to take over the lease of the Walmart and sell groceries there.
So why not? Generally the answer is that they would have to raise prices to make it possible to survive and that the townsfolk would still dive the 22 miles away to the nearest Walmart that was still open to save that money. And since gas has come down in price, probably less than $4 out of pocket to do that.
[1] (video) http://www.msn.com/en-gb/news/parisattacks/with-no-walmart-t...
We're all okay with that. The problem is the people that remain there in poverty.
The very small city where I grew up (pop. 4,700) had, 25 years ago, a Carpenter school bus manufacturing plant, a limestone company, and (at least) two other small factories. If you didn't work at one of those, you likely worked in the service industry supporting them.
First, the school bus plant moved to another location a few hours away. If memory serves, most of the employees were offered the opportunity to transfer but few did. While they could have moved their households, most of their immediate families were there and they didn't want to leave them.
Then, the other factories closed down one by one. One was purchased and its operations moved to Mexico for the cheaper labor. The other factory was shut down as well, its operations moved to a different state where another factory was expanding.
The limestone company still exists but there are no new jobs there. The folks who do work there mostly started right after high school when, for example, dad (who worked at the company) got his son a job there.
The jobs are all gone but, somehow, the city remains.
Myself, I moved out of town as soon as I had the chance. I live 45 minutes away in a city 15x the size. I drive past there occasionally, when I have to go to my company's office for some reason (I work remotely). I usually stop by and see my grandmother who still lives there. Everyone else in my family has pretty much left. The population has mostly stayed the same.
In my opinion, this small town no longer serves a useful purpose. It has been overrun with drugs. The only "jobs" available there are in the service industry and anyone with a "good job" works out of town and commutes.
That brings me back to your question. How does one just close it down? You just can't tell thousands of people to get out, that "we're turning the lights off on June 30th so you better be gone by then".
Probably the easiest thing to do would be to be conglomerated with the nearest larger town, so the small town of A becomes no longer its own town but a small area of the still active town B.
A town near where I was born went through this. Originally it was known as Port Robinson, now it's just the Port Robinson area of Niagara Falls.
Why would walmart just give away all of that money they invested? Especially in an economy that is starting to decline.
The county is looking into buying the property.
"You want to leave,” she said. "You feel like, what is there for me now?”"
I hope you get out Hailey.
"""
To hear Mary Francis Matney tell it, Walmart didn’t kill the once-vibrant cluster of shops next to a railroad and a creek in the faded old coal town of Kimball, W. Va. — the disappearance of the mines had pretty well taken care of that already. But now that Walmart’s leaving, too, as one of 154 U.S. stores the company closed in January, the town might be snuffed out for good.
"""
"Given some positive and some negative outcomes, it's probably safest to say that Wal-Mart's net imprint on a county's health appears to be smaller than most perceive." [1]
[1] https://www.minneapolisfed.org/publications/fedgazette/the-w...
[2] https://ag-econ.ncsu.edu/wp-content/uploads/2015/12/novdec05...
[3] http://www.forbes.com/sites/timworstall/2013/03/31/of-course...
My small town for example. https://www.google.com/maps/search/grocery+stores+near+Ellij...
These days it has grown a bit, but Walmart is a very important part of the community. Before Amazon, it was the one stop shop for food, guns, toys, toiletries and other categories.
I can't believe I just saw that in the same sentence. Perhaps the guns leaving town is a good thing.
Farmers markets can be more expensive, but I generally find the food to be of higher quality, and that money tends to go directly into the community.
Also, on the food thread, there are some things that people used to make at home and can significantly reduce overall food costs. Yogurt, as an example, can be made at home (easily) and is less than 25% of the cost. Humus can also be made easily and at lower cost at home.
Fresh raspberries have always in my experience been expensive items. (Frozen, less so, because it mitigates some of those issues).
I mean more of a mix of food and also everyday products as much as possible from the surrounding area. Whatever isn't possible would come from outside the region.
Woe to the wretches wrought by way of Walmart. But wait! Perhaps there is a way they can be saved, all without leaving the comfort of their homes...
Walmart drove into these small communities, destroyed the smaller stores, then realised after deliberately making either a loss or tiny profits it wasn't economically viable, then buggered off.
I think the only lesson I can see in this is that small communities should always oppose multinational retailers when there is a local option. Even if they have to spend a few dollars more. Otherwise, they'll be left with nothing.
But why wouldn't smaller stores open again now walmart is gone?
Edit: Say what you want about them being mom & pop stores that somehow cant start up again, if it takes 3 hours to drive to a shop and back there is a market opportunity. People will pay more for groceries when it doesn't involve a 6 hour round trip. I thought the idea of Americas great free market is that this void would be filled?
It very well could 10x on you, too.
Today, takes a big start cost to go from zero to viable, and the lack of intuitive mom and pop know how is a risk too. In these locations, that startup money itself will be risk adjusted, so expensive.
If I ran 7/11 or Shell, I might be thinking about how to put in gas 'n goes with a somewhat larger retail footprint, a larger percentage of life groceries than potato chips. That would have the backing of a large corp, so the first yearly lack of profit wouldn't kill mom and pop's retirement, and comes with knowledge of running the outlet and managing supply lines.
Bonus, you're gonna gas up before you make that three hour grocery run, maybe what they have at the gas station is good enough, or reduces the number of trips you need to make.
There are lots of ways to fill a hole.
In theory. In practice there are tons of areas that a vacuum exists for decades.
The same way there are tons of rural communities in the US where you still can't get an internet connection apart from dial-up.
What evidence do you have for that?
When a company such as Walmart opens or closes a large store, there seems to be a mass of news articles explaining how the opening or closing is destroying the community.
When a large store comes in, people rarely consider that the new jobs will have benefits and advancement opportunities not found in the traditional mom-and-pop stores. When a large store closes, people rarely mention that it will leave room for new mom-and-pop stores to open.
The fact is, large stores have a pluses and minuses. Their opening or closing is more a result of local economic conditions than the cause.
Real life doesn't always play out like simple (simplistic) economics.
E.g. sometimes nobody will do the investment to build one for years.
Or it will much smaller and more expensive that a Walmart, but enough to stiffle anybody opening a competitor.
Further, what the heck are you talking about with "benefits and advancement opportunities" at Walmart? The employees are on food stamps just to get by! Where does that leave them extra capital or "benefits" to that situation?
The rich call this a "food desert," urbanites call this the bodega or corner korean market and europeans have zillions of these. I actually love shopping in these places - terrific & patient service and amazing finds if you're patient.
The food distribution business is beautiful that way - economies of scale are very gentle. It's the exact opposite of automobiles and infrastructure software.
p.s. amazon+UPS is another great stopgap for these communities, and surprisingly efficient if they setup a DC (distribution center) somewhere a few hrs away with more limited selection. It's the 2016 equivalent of the milkman.
I cannot imagine anywhere in the lower 48 United States where there could be a community in which people have to drive three hours to get food. If there is, the demand would certainly justify someone from inside or outside the community opening a grocery store. A large capital outlay would not be necessary.
That's a very real and serious problem for low-income and fixed-income consumers...many of whom are forced to shop wherever they reasonably can...
There are many "food deserts"--areas where it's difficult to buy affordable good quality food--in the U.S., especially in sparsely populated urban and rural areas...
It's true that if the need (demand) is great enough in an area a retailer of some sort will probably eventually open shop to fill the void...waiting for that to happen can be very painful for the poorest consumers...
The best hope for communities abandoned by Wal Mart may turn out to be franchises related to the "dollar store" concept...
How Dollar Stores Were Planted in the South and Bloomed...
http://www.atlasobscura.com/articles/how-dollar-stores-were-...
Dollar Stores: Big Business, Rock-Bottom Prices...
Too bad they won't do a piece on what happens in a small town when Walmart opens. In mine multiple campgrounds and small locally owned small businesses closed down. Not to mention the workforce is all people from out of town now earning a pittance, living on government assistance.
Here's one by The Post, for example: https://www.washingtonpost.com/business/capitalbusiness/wal-...
Walmart gave more people jobs at a better wage and reduced the costs of most goods for everyone.
I looked at their average wages on payscale.com (hard to libk from my phone) and the max for most positions is close to $15/hour. The minimum is above minimum wage.
Almost anyone can do these jobs and they are hardly a ’pittance’.
That's only been true within the last one or two years as Walmart attempted to avoid further labor-related litigation and unionization efforts. Prior to that, Walmart payed local minimum wage and frequently stiffed workers for time spent checking in and and out shifts.
I'm sure there are more convenient ways of bypassing the paywall, too.