Tuesday, March 4th, 2014

The Bentonville, Arkansas Effect by Eric McAfee

[ It’s frequently alleged that Wal-Mart is a destroyer of small towns. Today Eric McAfee of American Dirt takes a look at Wal-Mart’s home town of Bentonville, Arkansas to see what its effect has been there – Aaron.]

It is a truth universally acknowledged that, from the perspective of urban sociologists and planners at least, major discount retailers such as Walmart have thrived on the destruction of commercial activity in traditional town centers. No doubt my assertion borders on exaggeration, but it would have to, considering I’ve cribbed Jane Austen’s famous (and equally ironically hyperbolic) first seven words to Pride and Prejudice, in which a man’s search of a wife sets a blithe tone for much of what follows. By contrast, the unceasing diatribes against Walmart from urban advocates are rarely whimsical. And while not every high-profile writer/blogger on urban affairs excoriates Walmart, the general tenor of the discussion ascribes much of the decline of downtown retail to the much-maligned megachain. After all, virtually every freestanding small city in America over 20,000 people that is not part of a larger metropolitan agglomeration can claim a Walmart, perched at the edge of the municipal limits. And yes, the burgeoning of Walmarts does more or less coincide with the near abandonment of historic, pedestrian-scaled main streets in favor of car-oriented commercialization consolidated into big-box department stores.

But did a corporation—or the corporation—really cause all this?

If the average American consumers genuinely cared enough about Main Street or the courthouse square, wouldn’t they have shunned this commercial cataclysm before it radically altered the entire landscape? Wasn’t it the consumer that ultimately fueled Walmart’s meteoric growth, by opting for the convenience of everything under one roof, abundant free parking, and (perhaps the most objective factor) those famously low prices? Some might argue that I’m unreasonably throwing Walmart a bone, since the folks at the boardroom table clearly knew what would happen to Main Street, as department-store big-box shopping encroached on communities that commercial developers had previously perceived as too modest in size to support this retail typology. And, yes, I recognize the firm’s historic opposition toward unionization, its eventual reneging on a long-standing “Made in America” pledge, and even the management of logistics/merchandising favoring the automatization of functions that once provided communities with stable jobs. Maybe I am cutting Walmart some undeserved slack. But I also think the corporation’s biggest critics fail to recognize that Walmart didn’t become a leviathan overnight, any more than these towns devolved from flourishing to failures with the flick of a light switch.

My own articles on main street America have explored the topic routinely. But it took a visit to Bentonville, Arkansas to develop a more nuanced understanding of Walmart’s approach to community engagement right at the belly of the beast.

My suspicion is that, until probably around the year 2001, 98% of Americans hadn’t heard of this well-scrubbed little municipality in the northwest corner of the state, just a stone’s throw from the rugged topography of the Ozarks. Even today, if people are familiar with the town, it is only because it hosts the corporate headquarters for the world’s largest retailer. And there’s nothing wrong with this seemingly simplified association: after all, one would be hard-pressed to find anyone in Bentonville who would argue that the city is better known for something else. But what sort of impact has Walmart’s presence exerted on what otherwise would likely be a nondescript, mid-southern county seat?

Not surprisingly, the influence has been formidable. I mention the year 2001 because, upon publishing the results of Census 2000, the nation learned that the Northwest Arkansas Metropolitan Statistical Area (consisting of the primary cities of Fayetteville, Springdale, Rogers and Bentonville) had become the sixth-fastest growing region in the nation. While a Census update isn’t the sort of news item that necessarily grabs the public by its lapels, it can flirt salaciously with the unconscious and, eventually, through mimetic repetition, penetrate to the conscious. With each passing year, Bentonville has grabbed the headlines more often, as decisions from the Wal-Mart Stores, Inc. Home Office exert a greater impact on the global economy. I would hesitate to assert that the name “Bentonville, Arkansas” is common knowledge to the same level that a similarly-sized city such as “Beverly Hills, California” might be, partly because the similarities between these two places basically stop there. But its star is rising on both the national and international horizon, since many of Walmart’s foreign retail ventures have proven just as successful as their domestic efforts. And Bentonville, predictably, has enjoyed its share of the region’s growth: at over 35,000 people in 2010, it more tripled its population since the 1990 census, and, as recently as 1960, it was a quiet village of barely 3,500 people.

The impact on this growth is obvious, particularly when viewing the street configuration.

The shift from a conventional grid to a more hierarchical arrangement is conspicuous and unsurprising.The oldest part of the city adopted the grid, which was customary for shaping virtually all communities in the 19th and early 20th century. Yet 80% of Bentonville’s city limits (which extend in all directions beyond the boundaries in the image above) fits the more expansive, automobile-oriented configuration, in which streets curve and wend, sometimes into hairpins, sometimes into full loops. Often they terminate as culs-de-sac. For a municipality that remained a modest village until the 1950s, this growth pattern is normal and broadly characteristic of numerous Sunbelt communities.Thus, the city of Bentonville has decentralized considerably in the last fifty years, in addition to hosting the global headquarters to the retail behemoth most regularly flagged as the culprit in expediting the demise of downtowns. Given these two factors, one prevailing question remains: what on earth does its beleaguered town center look like?

Chances are, you’d be as surprised as I was.

It looks terrific.Nearly 100% occupancy, clean sidewalks, a well-manicured streetscape. And virtually of all the retail mix—from bike shops to brasseries, yoga studios to yogurt cafes, tea rooms to trattorias—caters to an upmarket clientele, suggesting that the leasing rates are fairly high.

The culminating attraction, however, is the humble storefront that spawned it all:

Sam Walton’s original five-and-dime now serves as the Walmart Visitors’ Center and a mini-museum, with interactive exhibits and the recreation of a soda fountain.

These pictures date from a summer festival on the central square, taken a few years ago, in 2010. Though they are obviously a bit faded by now—not all of the visitor attractions were open yet during my visit—I can say with a fair amount of confidence that downtown Bentonville is even stronger today. After all, most estimates show the city has continued to grow another 10% since the 2010 Census results, and, considering that it was demonstrating considerable resilience during the peak of the Great Recession, the downtown is likely only to build on a momentum it had established long before the bubble burst. A detractor might challenge my assertion by arguing that I captured the city during an atypically vibrant time, when out-of-towners had flocked to the city for the summer celebration on the courthouse square. But how could the downtown support a high concentration of restaurants, cafés and boutiques if it weren’t lively during the other times of the week as well?

The fact remains that downtown Bentonville boasts a number of civic associations that have worked tirelessly to boost its cachet, including Downtown Bentonville, Inc, a nonprofit association that promotes, attracts investment, and plans activities for Bentonville’s historic downtown, as well as the Bentonville Merchant District, which seeks to attract upscale traveling merchants through the provision of Class A office space and furnished loft-style apartments close to the city center. The city also has a Convention and Visitors Bureau and a Chamber of Commerce. These organizations have no doubt worked tirelessly to re-centralize investment in Bentonville’s small downtown, even as the vast majority of the population growth over the last two decades has taken place in the purlieus. By most metrics, their efforts have paid off. But plenty of other similarly sized cities can claim the same business associations without these results; I blogged about Jefferson City, Missouri earlier this year, a small city whose civic leaders have collaborated to promote the downtown. However, the results in Jefferson City, while palpable, have been much more modest than Bentonville—and it is nothing less than the state capital.

Bentonville is simply part of a region that is enjoying a persistent economic boom. The other primary cities in this unusual metropolitan area—Rogers, Springdale and Fayetteville—are also growing like mad. It doesn’t hurt that the region is home to two other nationally prominent companies: Springdale’s Tyson Foods, the world’s largest meat producer, and trucking giant J.B. Hunt Transport Services, Inc., based in the town of Lowell, which abuts Rogers. But the real cog in the wheel remains the world’s largest retailer, headquartered in Bentonville, and I still suspect the corporation and its numerous investments has more to do with downtown’s vibrancy than the tourist bureau. Walmart undoubtedly prefers to associate its name with a municipality that enjoys a profile of prosperity and high quality of life; the company will do what it takes to maintain that image within Bentonville.

So what is the visual evidence that this isn’t just a run-of-the-mill boomtown? Beyond from the picture-perfect courthouse square, the air of plentitude permeates the city.

However, it isn’t just the park spaces that distinguish the more recently developed outer reaches of Bentonville; all the spaces in between have received above average treatment as well.

So a city street has sidewalks. Big deal, some might say. But it is out of character for low density, hierarchical, auto-oriented development in the South to make any concession for pedestrians, let alone a full network of sidewalks along all of the major streets. Compare Bentonville to just about any other city in Arkansas (outside of the Northwest) and you’d be hard pressed to find sidewalks on any arterial or collector roads beyond the historic original
street grid. Both the Department of Parks and Recreation and the Department of Planning in Bentonville have determined that core pedestrian access remains critical, even when the development pattern is sparse, in keeping with the preferences of the majority of people who settle in this part of the country. The former of the two aforementioned departments reveals that it has conceived network of parks, greenways and biking trails rivals that of a community three times its size.

Meanwhile, the latter-mentioned planning department has several aces up its sleeve as well. While it isn’t unheard of that a city might support a 76-page Bicycleand Pedestrian Master Plan, a Smart Growth Guidebook, or a Traffic Calming Guidebook, it certainly places the city well outside the bell curve when juxtaposed with its peers. After all, even the neighboring city of Rogers (pop. 55,000) shows no evidence that its planning department has the resources even to conceive of such initiatives.

The aforementioned features are hardly likely to elevate anyone’s pulse; they aren’t exactly competing with Manhattan’s High Line for infrastructural innovation. And it’s unreasonable to surmise that Walmart had any real influence on what remain purely publicly owned assets. But one structure in Bentonville is likely to turn the head of even the most skeptical coastal snob: the Crystal Bridges Museum of American Art.

The structure was not complete when I visited Bentonville in 2010, but it opened to the public in late 2011, and made international headlines for both its novelty (first major American art museum to open in 50 years, and the only one in an over 100-mile radius) as well as its magnitude (over 200,000 square feet of space on 120-acre grounds and a collection valued in the hundreds of millions). The striking edifice reaches Bentonville courtesy of internationally recognized Israeli-Canadian architect Moshe Safdie. Perhaps most importantly though, it is resolutely the vision of Alice Walton, daughter to founder Sam Walton and heiress to his fortune. In one of many interviews she offered at the time of the museum’s opening, Walton, who has been an art collector most of her life, acknowledged that she wanted to make a difference in this part of the world by bringing “something we desperately need”. She contributed over $300 million to the project, built on family land. Admission to the museum is free, but because of its destination status, visitors will typically linger, travel the grounds, shop, buy a meal. A Huffington Post article from the museum’s infancy concluded that the museum would skyrocket past its estimated 250,000 first-year visitors, based on the success after just three months open to the public.

If Crystal Bridges Museum lives up to its promise as an attraction of national or even international caliber, Bentonville clearly needs the tourist infrastructure to support those visitors. But it would appear it already has it. Just down the road, in neighboring Rogers, an Embassy Suites Spa and Convention Center flanks one side of the interstate; the Pinnacle Hills lifestyle center sits on the other. And, earlier this year, the sleek 21c Museum Hotel, famous for the prominent positioning of contemporary art, opened right off of Bentonville’s courthouse square – only the third of its kind in the country. (Louisville and Cincinnati claim the other two.) Many of the amenities that have sprouted across Northwest Arkansas over the last twenty years are in keeping with a metropolitan area of nearly a half million people; of course it has a mall, convention center, and a seasonal symphony orchestra. But while growth trajectory of the metro might resemble that of Phoenix or Las Vegas, no single municipality has spawned everything here in Arkansas. As of 1950, only college town Fayetteville had even 10,000 people. The other towns—Lowell, Rogers, Bella Vista, Johnson, Springdale, and of course Bentonville—were isolated villages that boomed simultaneously, swelling their incorporated boundaries until they touched one another. As a result, Northwest Arkansas may be the country’s youngest conurbation: a 35-mile string of small cities—a microlopolis. (The only comparable phenomenon I can think of domestically would be the Texas border towns along the Rio Grande, but even Brownsville and McAllen were more than villages fifty years ago, and they’re big cities over 100,000 people now.)

The rapid ascension of these communities into a regional economic powerhouse—with the amenities one might from a single, medium-sized city—may very well neatly manifest the multiplier effect. But it still doesn’t explain how Bentonville, the epicenter of Walmartlandia, has managed to hold its own with a lively downtown, when plenty of other fast-growing big cities struggle to keep it all centralized (Houston, for example). After all, in one of the most famous journalistic explorations of Northwest Arkansas, Financial Times’ “The Town that Wal-Mart Built”, Jonathan Birchall observed in 2009 that he always found it “hard not to be hit by the irony in this Bentonville Renaissance. Wal-Mart’s football-stadium-sized supercentres are, after all, the epitome of the chain store culture that has destroyed small town centres and homogenised communities all over America in the past three decades.” But it sounds like he took the bait.

The town that Walmart built has either proven itself immune to the main-street-murdering forces that afflicted most American cities, or it has recovered from that ailment magnificently. Bentonville also boasts a regional airport that offers year-round, nonstop daily service to New York, Los Angeles, and Chicago; Alice Walton’s money helped build the terminal, which serves a population that had no regular airfare until 1998. Bentonville Public Schools have offered the prestigious International Baccalaureate program since 2007. And yes, Bentonville has a Walmart not so far away, in what probably was the edge of town not too long ago.

By this point in such a lengthy analysis, it’s obvious what has happened: Bentonville has responded to the fact that it hosts a multinational corporation by offering the sort of amenities needed to attract talent to the region—talent that, its current leadership presumes, will propel Wal-Mart Stores, Inc. to another fifty years of unprecedented growth.

Most MBA grads trained at Harvard, Wharton or Kellogg are going to need enticement to move to an area not recognized for its urban offerings. On top of all the talent in multinational retail, Bentonville and its neighbors most also graciously host the satellite offices of 1,300 suppliers whom Walmart has lured due to its vast trade network—ranging in size from one sales exec to something as large as Procter and Gamble, for whom a few hundred employees call Northwest Arkansas home. The elite business class that routinely visits the Walmart headquarters expects top-tier hotels and shopping, while many of the executives who make it
their permanent home will inevitably seek sophisticated eateries in an attractive, walkable setting. How much of all this was funded directly by Walmart is anyone’s guess (though I’m sure at least someone out there has the numbers). The fact remains that the corporate culture in Bentonville fueled a demand for a Parks Department that builds a network out of its green space, or a Planning Department that performs traffic calming studies.

The hardened cynics can read about this serendipity in the Ozarks and offer an acerbic rebuttal: of course Walmart is going to prop up its hometown, but does that absolve it from the devastation that has taken place virtually everywhere else? This assertion would be valid if every town with a Walmart suffered an equally moribund Main Street. But they clearly haven’t. And there remain villages too small or too remote for a Walmart, which have confronted the exact same decline of entrepreneurism in their historic centers. Arguing from that same angle, the City of Bentonville did not enjoin Walmart to revitalize downtown—or force Alice Walton to build Crystal Bridges—any more than existing laws compelled Cornelius Vanderbilt to endow a university in Nashville, the capital of a state he never even visited. No doubt some of Walmart’s boosterism in Bentonville is self-serving, since a desirable community only helps to improve Walmart’s reputation as both an employer and corporate citizen, which in turn can attract further investment. However, viewing all corporate altruism as suspicious requires a labyrinthine recontextualization that is just as distorted as saying “Walmart killed our downtowns”. Or its equally hyperbolic counterpart: “Walmart has had no impact on the way we shop on main street”. Clearly it has, but the forces compelling consumer behavior remain complicated—baffling even. For while most of us can understand that we abandoned our old downtowns out of convenience and lack of foresight,
no one will ever truly be able to explain want prompted many American consumers
to give up their cars so they could return to bicycles. And if you don’t think I’m concluding ironically, I’ve got a Jane Austen novel to sell you.

This post originally appeared in American Dirt on October 16, 2013.

Topics: Architecture and Design, Civic Branding, Demographic Analysis, Economic Development, Historic Preservation, Talent Attraction, Urban Culture
Cities: Bentonville (Arkansas)

28 Responses to “The Bentonville, Arkansas Effect by Eric McAfee”

  1. John Morris says:

    Sam Walton was smart enough to build a business based on the planned destruction of cities and small towns – already happening through “free” highway construction and zoning.

  2. I think in many cases the destruction of Main Street at the hands of Wal Mart or any other big box store is a manifestation of entropy in an already depressed or at least stagnant market. A growing and successful municipality can absorb both sprawl and revitalization of their downtown, especially if the existing downtown area is space constrained through zoning. A stagnant town will go after “teh new shiny” on the edge just to get something, even if it mean sacrificing the “old and busted” downtown. It’s too bad few realize just how much more bang for the buck they’d get if they spent that money in the “old and busted” part of town.

    Because of that, places like Bentonville may be operating on borrowed time. They obviously have the cash from growth to not only build a ton of new and very expensive infrastructure to serve very low-density development on the edge of town, but they can also use it to spruce up downtown and kind of “share the wealth.” I’m basically channeling Strong Towns here, but all those sidewalks and landscaped boulevards and long winding streets on the periphery are going to come back to bite the town later when the cost of maintaining and rebuilding it all comes due. It looks like they’re in the early cash-flushed period of the growth ponzi scheme, but unless they can keep growing forever, it will eventually collapse.

  3. John Morris says:

    Sidewalks and bike paths are not that expensive to maintain in most places.

  4. DBR96A says:

    The small towns with decimated Main Streets either a) aren’t economically healthy enough to support both a Wal-Mart and a thriving central business district, or b) offered the same goods and services that Wal-Mart offered. That’s all there is to it. Most of the businesses in downtown Bentonville offer upscale goods and services, which Wal-Mart doesn’t offer. The future of central business districts is upscale, out of the scope of Wal-Mart. Need a toy for your son’s 10th birthday? Go to Wal-Mart. Need a violin for him to play in the orchestra? Go downtown. Need some fast food for the family for dinner? Pick up a rotisserie chicken and some potato salad at Wal-Mart. Need to take guests out to dinner, or celebrate an event? Go eat downtown.

  5. Jim D. says:

    I’ve never fully bought the ‘Walmart killed Main Street’ narrative. Throughout the Northeast where I grew up, traditional downtown shopping areas were dying out long before Wal-Mart and Target expanded in those regions. In most cases, the culprits were suburban malls which often lured many of the same Main St. retailers who soon closed down their downtown stores. In this part of the country, what Wal-Mart really seemd to kill off was weaker department store chains such as Bradlees and Caldor (Woolworths was pretty much already gone by then).

  6. Mon Oeil says:

    My wife and I visited Pea Ridge National Military Park last November. We stayed one night in Rogers, visited the park, then drove over to Bentonville to see the sights the following day.

    B’ville is a testimony to the power of Mucho Moola.

    The old town part of Bentonville is indeed a visual checklist of all the complete streets, walkability, bikeability you might wistfully dream about for your own town. The contrast between Rogers and Bentonville in that regard is stunning: night and day. When we got to the center of Bentonville, we thought we’d arrived at a Potemkin Village: so perfect (and unnerving) that it couldn’t be real.

    We brightened considerably, however, as we discovered this Disney-like anomaly only exists in the old grid of streets. The surrounding streets and arterial roads could easily be mistaken for Plano, TX, or some suburb in Ohio. Phew! Back to normal for us. We scooted onto the back roads west of town and continued on our way.

  7. John Morris says:

    Problem is that Walmart itself isn’t doing too well as it missed the shift back towards cities and failed to adopt its stores to a smaller scale. The result is extreme dependence on a poor rural and exurban customer base vulnerable to fuel costs.

    Aldi’s, Target & perhaps CVS & Walgreens should have been their only hefty competition. Family Dollar, Dollar General would likely have not have the businesses they have today if Walmart had adopted a smaller store model.

    They are trying to turn the super tanker now, but they could be too late.

    The trillion $ question is what happens to the hundreds or thousands of Super Centers they may close.

  8. WalMart exists to suck all the wealth it can from the communities in which it locates. It does not exist to decimate communities; that’s just an externalized cost of doing business.
    Where does all that money go? Bentonville, obviously. And WalMart’s corporate executives do not work for minimum wage. Is this so hard to understand?

  9. John Morris says:

    Here is short article on Walmart’s only real bright spot right now.


    “There was one bright spot: Wal-Mart’s smaller stores. Bill Simon, the head of the retailer’s U.S. operations, noted that the smaller locations (which range in size from 15,000 square feet to 39,000 square feet) had positive comparable sales growth and increases in traffic each quarter of 2013.”

    Honestly, how long did it take them to figure this out? Kmart had successful stores in NYC since the early 1990’s. Even Home Depot adopted their store in Manhattan. They gave Target and every other urban retailer a free ride by insisting on identical massive footprint stores in all locations.

    At this point, I have serious doubts that a management this out stubborn and out of touch can turn things around.

  10. John, keep in mind that activists have kept Wal-Mart out of many of these areas. Wal-Mart would love to open more stores in NYC.

  11. John Morris says:

    Wal-Mart made it very easy to keep them out by insisting on a store model not acceptable or likely economically practical in most dense cities.

    Kmart, Target, Staples, Best Buy & almost all the other big box retailers came out with an urban friendly design.

    Activists are now trying to keep the new stores out- based on the name alone- but that is a tougher sell.

  12. John Morris says:

    @ Aaron

    I normally respect this blog because of your ability and interest to back your opinions with facts. Where are the facts that show that Walmart failed to enter big urban markets just because of activists alone?

    This story from Miami is a pretty typical example of the chain trying to force a one size model on a city.


    In the end, a store was approved, but in that time Walgreens, CVS, Family Dollar and Aldi’s could have built out 30 stores.

    I’m not reflexively anti Wal-Mart, but it does seem to have a very authoritarian culture better adopted to pushing around desperate small towns.

    Had they been more flexible 20 years ago, they would very likely be one of the dominant urban retailers.

  13. Eric says:

    The city of Harrison, OH, successfully denied a WalMart over concerns of impacts on small businesses. Turns out, it was denied because Kroger was building one of their Marketplace stores nearby. Beware of big boxes not named WalMart- Kroger, Meijer’s who’s been known to bribe local officials, and I’m sure others depending on your region.

  14. John Morris says:

    Of course this stuff goes on all the time, but in the case of an average Wal-Mart plan for NYC or DC, denial was a slam dunk since in most cases they were demanding a huge variance from normal development. In NYC, I think only eminent domain could make a standard super center footprint available.

    If Wal-Mart had used a Walgreen/Aldi/CVS/Family Dollar model they would have been hard to tag as the distant, suburban- “other”. One can only assume management thought traditional city design was a thing of the past and they didn’t have to adopt.

  15. Mike D says:

    Wal-Mart wasn’t the cause of dying downtowns, merely the best exploiter of changing rules. The real culprit is the highway system. It allowed people and businesses to leave the existing, compact cities and towns for the suburbs. So Wal-Mart was able to exploit the public subsidies of sprawl combined with the opening up of China for cheap manufacturing, also subsidized with public money, at the same time that the US economy was shifting from manufacturing to service dominated.

    Bentonville is the beneficiary of this because it is Wal-Mart’s home. The Waltons and their employees, at least the executive class, have gobs of money and don’t want their backyard looking trashy so they demand high-end retailers, a clean downtown, good sidewalks, art museums, etc. But how is this any different than the chemical or oil industry execs who don’t want that activity going on in their backyard? It’s not.

    The other “successful” cities in Arkansas are also dependent on public subsidies or lack of adequate government regulation, both of which are how conservatives want government to act. If you take away the highway subsidy (i.e. make people directly pay for these roads), take away the subsidies to have stuff built in China, Bangladesh, or where ever the next Third World country we can exploit is, break up the monopolies and let regulators do their jobs, these companies would shrivel up like dying downtowns. And all that money that these companies have spent on their own towns would disappear.

  16. Thanks for the comments and observations, one and all. Of course it’s not rocket science that Bentonville owes its prosperity to the presence of the world’s largest retailer, and the execs certainly don’t “want their backyard looking trashy”–though one would presume that the middle class would aspire to that as well. (Or everyone, for that matter.) Even as this strange microlopolis remains peppered with highly affluent nooks, its most visually dominant presence (and the median household incomes/poverty statistics support this) is a solidly middle-of-the-road middle class–in an era when many argue the middle class is suffering an ineluctable squeeze. Bearing that in mind, the demographic targets of retailers such as Walmart, Target, Walgreens, Aldi and Dollar General are far more nuanced than is reflected by lumping them all together as mere competitors. After all, prices at Walgreens/CVS are much higher than Walmart–certainly enough of a differential to repel households below a certain income.

    I’d agree that Walmart is far less willing to shoehorn its typology into heavily dense, urban settings like NYC. And its horizontal layout–allowing for maximum efficiency of logistics and intake of new merchandise–is probably critical to letting the company price its products just 5-10% cheaper than Target/Meijer/Bed Bath and Beyond etc. Without that margin, what is Walmart’s selling point?

  17. Eric says:

    “If the average American consumers genuinely cared enough about Main Street or the courthouse square, wouldn’t they have shunned this commercial cataclysm before it radically altered the entire landscape?”

    Acckk! No! This sentence is so layered with fallacies and specious logic that it’s difficult to even get started.

    It is illegal, *illegal*, in nearly every municipality in the country to recreate an environment like downtown Bentonville. It would be illegal to build another Georgetown in Washongton D.C. Saying that Bentonville residents prefer historic Bentonville, so big box stores must be part of a rational development pattern is so facile as to evoke rage. It’s the only thing legal to build in most places! If 50% of people prefer oranges and 50% prefer apples but a grocer only has apples available, the fact that no one is buying oranges isn’t evidence that they wouldn’t be preferred by many.

    More on point, whites-Only dinner counters didn’t go away because people stopped wanting to go to them. Sometimes bad things are popular and profitable. Without regulation, the smoking rate would be more than double what it is today. Not everything that is profitable is good. Businesses can do things that are bad for the public, even if the public is a willing participant.

    Beyond that, people don’t always know the external costs of the choices they make. People may value a coherent public space a great deal and not realize how some developments that seem to superficially make sense threaten it.

  18. @Eric, I’m not sure what you’re saying. If there’s a limited supply of traditional building styles (which I agree with) but strong demand, wouldn’t this lead to those limited supply areas thriving and going up in price? That’s happened in Georgetown and some other places. But in the average American Main St. that is really the matter in hand, it didn’t happen.

  19. That may be true Aaron, but at the same time those Main Street businesses are hobbled by suburban-oriented regulations above and beyond zoning. When an existing store goes out of business, for whatever reason, new ones are usually barred from moving in due to lack of on-site parking, fire codes, accessibility requirements, and prohibitions on mixing uses in the same building. That’s a big part of the reason why the price of those buildings can be so low, and why you end up with Main Streets that get reamed out for parking while all the non-first-floor spaces are left abandoned.

  20. Eric says:

    Well, we don’t need to look at just American cities for examples of urban development. Most other places in the developed world have regulations that result in coherent, walkable development, and that’s the result. In contrast, I was in Dallas just yesterday–close to the city center in what appeared to be a prosperous neighborhood–and only one side of the street had sidewalks. And there was no parking, so it was a bit threatening to walk on that sidewalk next to moving traffic.

    I don’t need to explain this to you, but in the U.S. we overbuilt roads unrelated to demand, made parking-free development illegal and we aren’t be surprised by the result. A coherent, walkable core is necessary, but not sufficient to create a Bentonville-style city when other supply and demand factors are at play. There are various obvious and not-so-obvious tipping points and thresholds that affect regional demand. I don’t pretend to understand the economics of all of them, but I think everyone understands that they exist.

    I always thing it’s instructive to look at the many small communities that have maintained a historic core. There are lots of small towns along Michigan’s west coast and in the Pacific Northwest, the Maritime provinces in Canada and in New England that are thriving. Whenever I bring this up to people, they usually hand-wave it away as evidence by saying, “but those are resort communities or college towns.” A lot of them are. But what they have is a *reason for people to be there* plus, an accident of history as to why they weren’t bulldozed. Usually because they were too far from a highway or geography constrained sprawl. Anyway, they stayed coherent and now real estate is relatively expensive in Petoskey, MI because it’s a desirable place to live close to amenities.

    It’s an accident of history that a lot of small, salt-water-taffy towns didn’t get bulldozed and are now prosperous and worth visiting just for the novelty of a seeing charming community, but there’s absolutely nothing stopping us from simply zoning for development in that fashion again. That’s the norm in most of the world. And all things being equal, people don’t just want it, they clamor for it.

  21. TNMillenial says:

    @Eric – tangential, but I just saw that Petoskey made Publisher Weekly’s shortlist for bookstore of the year. Clearly a sign of a thriving small town community.

  22. George V. says:

    The fact that “Main Streets” like this pass for urban in American at this point shows just how suburban we are. Downtown Bentonville functions more as a tourist theme park than any kind of livable, walkable, mixed use development. People with money enjoy the history and unique architecture, so they drive down, park, and check out a restaurant and a crafts shop. Oh, and elaborate bike trails mean little for urbanity – I see those in exurban developments all the time.

    I know Walkscore is far from perfect, but a house on Central Ave that’s about as close to Downtown Bentonville as you can get only scores a 63. You can get those scores in suburbs with maybe 5,000 people per square mile pretty easily. It’s not impressive.

    When you think about it, developments like Downtown Bentonville were basically the first outdoor malls. Rather than mix retail and residential, retail was largely confined to a central district, with corner stores fulfilling immediate needs for outer residents. In bigger cities, you commuted into “downtown”, perhaps on a streetcar/train or with your horse and wagon, and that was really the only substantial walkable area you had available to you.

    In fact, Alexis de Tocqueville found American Main Streets quite strange. In European “inner cities”, people of all walks and stripes of life were crowded in, cheek by jowl. But on classic American Main Streets, the population was mostly a collection of lawyers, doctors, and various professionals, the commoners stuck on far-flung farms. It was never a true urban area.

    Any older area with a little extra money to go around is going to have an at least OK downtown. That’s just a prevailing trend. But most of the patrons will live in the suburbs.

  23. Chris Barnett says:

    “suburbs with maybe 5,000 people per square mile”

    And where, pray tell outside of the urban Northeastern US does one find such a suburb? Maybe the old industrial suburbs of Cleveland (Elyria, Lorain) and Chicago (Cicero, Berwyn). Maybe LA/Orange County. The rest of the US’ suburbs are less dense than that.

    This is why people are drawn to exurban (or even suburban) cities’ quaint old downtowns…they remind us of our small-town and rural origins. It’s hard to believe, but when my parents grew up, the US population was still something like 30% rural and a fair amount more in small towns and small cities with Bentonville-like downtowns.

  24. George V. says:

    Actually, Chris, the population-weighted density of the U.S. is over 5,000 per square mile. It’s sorta complicated, but basically, population-weighted density figures out the actual densities in residential areas. So there’s that.

    And even when we ignore that stat, the whole of California, for example, has more major suburbs with population densities over 5,000 than you can shake a stick at (just look for yourself). A quick search around St. Louis revealed a few right away, including University City and Clayton. Hell, I even found two outside of Denver: Edgewater and Mountain View. Basically, most major American cities have at least a couple inner ring suburbs with densities over 5,000.

    Hell, even where I live in Detroit (an area that natural favors auto-oriented development) we have over a half dozen inner ring ‘burbs with population densities over 5,000.

    So, I don’t know where you live Chris that a suburb with over 5,000 population density is so shocking, but it assuredly must suck. Maybe you live in Bentonville?

  25. George Mattei says:

    Not at all surprising that Bentonville is such a nice town. One of my wife’s best friends from college lived there for a few years when she worked for Frito-Lay as an account exec for the Wal-Mart account. They went to Miami of Ohio-which is knows for its undergrad business school. If you know anything about Miami (the “Harvard of the Midwest” as the faithful refer to it (yes it’s a stretch, but it’s still a good school)) you will know that folks graduating from there most likely would not want to live in a dusty old southern town.

  26. Eric (#17 and #20), do you really think that towns like Bentonville (and all the other smaller communities that have healthy, active main streets–a quotient that is growing rather than shrinking) have simply removed the policies that served as barriers to retail redevelopment? If it is “illegal”, as you say, to recreate Bentonvilles, how are they happening, in even very conservative, anti-transit milieus, to which Bentonville would almost certainly qualify? And it was really only policy that caused consumers to gravitate toward big boxes–but otherwise they’d still cling to these three story Italianates with a 3:1 depth to width? So it has nothing to do with a rediscovering of the intrinsic qualities to old historic main streets that foster shopping as a leisure activity? (And, let’s face it, in the era of the internet, leisure shopping is about the only type where bricks-and-mortar still has an auspicious future.)

    I guess if you feel that only regulation has helped half the smoking rate in the US–and not empirical observations of friends and family dying from lung cancer–then you’re probably impelled to believe that policy is the primary driver of American consumer decisions. And in that case, my logic does probably seem pretty fallacious. Suum cuique.

  27. John Morris says:

    @Eric M (American Dirt)

    “I’d agree that Walmart is far less willing to shoehorn its typology into heavily dense, urban settings like NYC. And its horizontal layout–allowing for maximum efficiency of logistics and intake of new merchandise–is probably critical to letting the company price its products just 5-10% cheaper than Target/Meijer/Bed Bath and Beyond etc. Without that margin, what is Walmart’s selling point?”


    Walmart is now coming around to trying a smaller scale store adopted to urban environments. My guess is the average prices will be slightly higher. They really lost a lot of time on this and let a lot of weak rivals gain an upper

    “Behind a real estate strategy focused on providing the broadest selection of products and convenient access through a digitally connected, multi-format portfolio, Wal-Mart Stores Inc. (NYSE: WMT) today announced it is significantly accelerating its capital plan for U.S. small store format openings for the current fiscal year.

    The company is expanding its original capital forecast provided last October, and now expects to add approximately 270 to 300 small stores during the fiscal year, doubling the initial forecast of 120 to150 stores. Walmart U.S. will continue its plan to open approximately 115 new supercenters this year.”

  28. Chris Barnett says:

    Keyword “smallER”. The new stores appear to be the 40,000 sf “neighborhood market” type.

    Those are mostly-grocery with pharmacy, which allow Walmart to increase grocery market share. It seems unlikely to me that they will feature higher prices in the short run. The strategy would seem to be knocking out regional chains so that the market is dominated by Kroger, Walmart, Albertsons/Safeway, and Target.

    It’s not a Main Street move…in fact, the opposite. Thus far (at least in Indy) the smaller stores are in first ring suburban infill sites, where incomes are below median.

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