
What happens to a tiny town when Walmart disappears - nkurz
https://www.washingtonpost.com/news/wonk/wp/2016/02/05/what-happens-to-a-tiny-town-when-walmart-disappears/
======
strommen
The title could be changed to: "What happens to thousands of tiny towns when
the big business that brought the town into existence stops making money".

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.

~~~
ghaff
I often wonder, when driving through remote rural communities, how the
economics work. I expect what you wrote is generally the case. Retired people
with some savings and/or pensions, social security, etc. plus a minimal
service economy for those people.

~~~
douche
People travel distances that would be unimaginable for some of us to get to
work. 30-40 miles one way is not terribly rare. Or they spend the week living
at the job site, and go home for the weekends.

~~~
ghaff
I'm not sure 30-40 miles one way is terribly unusual even in relatively
urbanized coastal areas :-) But I agree with your basic point. I'm not
personally familiar with how shifts typically work with oil drilling on land,
but when I was working in the offshore drilling industry it was week-on/week-
off in the Gulf and many of the workers came significant distances--often from
rural towns in Louisiana, Mississippi, or Alabama.

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mdasen
The article points out that in 95% of cases, there's another Walmart within 10
miles of the one they're closing. It seems like the Post is choosing the most
extreme case it could find.

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.

~~~
sokoloff
It depends on Walmart's overall motivation.

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.

------
DiabloD3
My town has about 8k people, and the local Walmart services our tiny micro-
metro of about 15k people.

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.

~~~
jonknee
> 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.

I've read a lot of complaints about Walmart, but never once about how they are
expensive. Fascinating.

~~~
DiabloD3
Apparently it isn't unique, it is a product of Walmart corporate interference
into how each store individually operates.

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.

------
ChuckMcM
I noticed that we didn't get any national coverage when Fry's destroyed all
the electronics stores in the Bay Area and then decided to stop stocking and
selling electronics. JDR, Quest, Jade, Sunnyvale Electronics, and Quement.

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...](http://www.msn.com/en-gb/news/parisattacks/with-no-walmart-
texas-town-has-no-grocery-store/vp-BBoSGHg)

~~~
georgeecollins
RE Fry's :You can pick a lot of electronics components up at the Jameco in San
Carlos. They don't have it on display but they stock it and you can pick it up
right there in a few minutes.

~~~
seanp2k2
HSC Electronic Supply in Santa Clara is also amazing if you've never been.
3500 Ryder St, Santa Clara, CA 95051. Their hours aren't amazing but the store
definitely is.

~~~
ChuckMcM
Love HSC but since most of their stock was surplus their variety has gotten
worse and worse as more and more manufacturing moved out of the Bay Area. But
if they have something you might want, better buy it because it won't be there
when you need it. This has always frustrated me.

------
rocky1138
Am I the only one okay with small towns which no longer serve a useful purpose
closing down? Save some history in a nearby museum and on Wikipedia then turn
the lights off on the way out.

~~~
jlgaddis
How do you go about "closing down" a small town?

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".

~~~
rocky1138
A few towns have done it: [http://www.reuters.com/article/us-usa-goldbar-
disincorporati...](http://www.reuters.com/article/us-usa-goldbar-
disincorporation-idUSBRE86B1II20120713)

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.

~~~
rwmurrayVT
That's a fairly common practice around major metros. I know in Edmonton they
eat up surrounding areas as they grow.

------
malandrew
I'm wondering if Wal-Mart could allow the community to adopt the stores
(without their brand name attached) and manage them as a coop instead of
shuttering them. In other words "It's not worth it to us to keep this building
around, but if it is worth it to you, feel free to keep it running"

~~~
bobby_9x
Would the community be able to get together and buy the building or take over
tge lease?

Why would walmart just give away all of that money they invested? Especially
in an economy that is starting to decline.

~~~
funkyy
I dont think changing WalMart in to farmers market would be that expensive. If
farmers and small business could get more exposure for a bit of rent, why not.
Local governments should be interested in this as this would generate jobs in
area.

------
patleeman
"For her granddaughter Hailey Noe, a high-schooler with long hair and heavy
eyeliner, the Walmart was the last thing that made staying in the immediate
area even viable.

"You want to leave,” she said. "You feel like, what is there for me now?”"

I hope you get out Hailey.

------
everyone
Presumably this is a chance for small local shops to come back. Usually the
arrival of a large supermarket like Walmart means the death knell for many
small local shops in its catchment area, and a savage blow to that areas
society.

~~~
MCRed
I saw an economic study from several years ago showing that the arrival of a
Walmart actually stimulated the growth of "Small shops" around the Walmart.
That it stimulated commerce in the area-- in part because walmart brings in
people from quite a distance (especially in rural areas) and the stores showed
up to capture that traffic.

~~~
officialchicken
Link, please. Not that I doubt you, but that kind of statement needs to be
backed up. Every study and article I've seen over the past 10+ years that
concludes the effect is neutral at best. Directly from the federal reserve
bank:

"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...](https://www.minneapolisfed.org/publications/fedgazette/the-
walmart-effect-poison-or-antidote-for-local-communities)

[2] [https://ag-econ.ncsu.edu/wp-
content/uploads/2015/12/novdec05...](https://ag-econ.ncsu.edu/wp-
content/uploads/2015/12/novdec05.pdf)

[3] [http://www.forbes.com/sites/timworstall/2013/03/31/of-
course...](http://www.forbes.com/sites/timworstall/2013/03/31/of-course-
walmart-destroys-retail-jobs-thats-the-darn-point-of-it-all/#5f7df6c8152b)

------
lettercarrier
The non Express stores were long known as poor performers, even if they were
new openings. The newish CEO has razor sharp skills and keeps making decisions
that long ago should have been done.

------
bhartzer
Could be a tactic by Walmart get rid of the competition. They open smaller
stores, get the small businesses to close. Then by closing their smaller
stores they force people to go shop at their larger stores.

------
dghughes
Imagine the opposite of a Walmart a store that primarily sold local products.

~~~
GFK_of_xmaspast
Have you been to a farmer's market recently?

~~~
xeromal
Not trying to be snarky, but the majority of farm markets I've been to are
overpriced. 6$ for raspberries, 7$ for a hummus. I know we lived in an era of
low-quality, cheap food but for people like my family cheap grocers like
Walmart are a necessity.

My small town for example.
[https://www.google.com/maps/search/grocery+stores+near+Ellij...](https://www.google.com/maps/search/grocery+stores+near+Ellijay,+GA/@34.6879091,-84.5081625,14z/data=!3m1!4b1)

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.

~~~
bashinator
How does the price of actual produce compare? Raspberries are a luxury crop,
and hummus is processed. How about lettuce, tomatoes, bok choi, herbs, fruit,
etc? At my farmers' market, the produce is significantly less expensive than
at the grocery store, and far tastier.

~~~
thaumasiotes
What makes raspberries more of a luxury than "fruit"?

~~~
caf
Compared to something like apples or oranges, raspberries are land-intensive
to grow; very expensive to pick and pack; fragile; and have a short shelf
life.

Fresh raspberries have always in my experience been expensive items. (Frozen,
less so, because it mitigates some of those issues).

------
oniMaker
Remember this is being published by Bezos. It's a great tactic to frame the
closing of these stores as afflicting the poor and downtrodden.

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...

~~~
chris_wot
You are seriously heartless. Many small communities utterly rely on buying
groceries. Can you imagine not having anywhere to buy food and having to drive
3 hours just to get it?

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.

~~~
orf
> Can you imagine not having anywhere to buy food and having to drive 3 hours
> just to get it?

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?

~~~
Terretta
The old mom and pops bootstrapped organically, grew both inventory and the
know how to stock it over decades, in lockstep with the community.

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.

~~~
a3n
There's probably a lot of truth in what you say. But, the economy abhors a
vacuum, and there will either be "something" that starts up, or in some cases
not and those towns may die. The dead towns will have a complicated story that
in many cases will probably include the death of local businesses by Walmart.

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.

~~~
eropple
I'm not sure you quite grasp how hardscrabble these areas are, and 7/11 and
Shell are both franchise operations in the first place. The capital still
needs to come from somewhere, and gas has worse margins than grocery in the
first place.

~~~
a3n
I understand the area is hardscrabble. And yes, 7/11 and Shell are franchises,
that's the point. It's a response to the idea that mom and pop might not be
able to step up to serve the community. That would be preferred, but if they
don't, it's still possible to reduce the need for three hour drives, with a
BigCorp that already knows how to do retail and already has the lines in
place.

There are lots of ways to fill a hole.

------
diyorgasms
I've hit my article quota from WaPo for the month, and as such was unable to
view this in my browser. For anyone else having this problem, wgetting the URL
worked for me.

I'm sure there are more convenient ways of bypassing the paywall, too.

~~~
riebschlager
You can also open the link in an incognito window.

~~~
diyorgasms
Good call thanks.

~~~
jlgaddis
The best way I've found is to copy the link from this discussion/comments page
you're on now, open a new incognito window, paste the link and pull up this
same page in the new window, then click on the "web" link just below the title
/ above the comment textarea.

