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The Wal-Marting of America

Wal-Mart will be closing its store in Livingston, Ala. early next year. The reason offered is that Wal-Mart has opened Supercenters about 25 miles away in Demopolis, Ala., and in Meridian, Miss.

When Wal-Mart located in <?xml:namespace prefix = st1 ns = “urn:schemas-microsoft-com:office:smarttags” />Livingston 25 years ago, the main street in this college town of nearly 4,000 residents was vibrant. A score of merchants offered a variety of clothing, hardware, electronics and other goods. <?xml:namespace prefix = o ns = “urn:schemas-microsoft-com:office:office” />
 
Across the years these shopkeepers learned they could not compete well with Wal-Mart. They could not sell as cheaply and did not offer as wide a selection of goods. Many went out of business. Today, Main Street, while still attractive cosmetically, offers far fewer goods and services to the residents and college students of Livingston.
 
A little more than 40 years ago, when Sam Walton opened his first Wal-Mart stores in the trade-center towns of the Ozarks, he surely had no idea that his success would reshape not only retailing but also community boundaries, first in America and now across the world.
 
Those of us who lived in these trade-center towns, mostly rural county seats, welcomed Wal-Mart. We saved money there. We had a larger selection to choose from.
 
The policy of employing part-time clerks fit the lifestyle of our small town communities. Farm wives, widows and Social Security recipients found employment that fit their needs as “associates” in the Wal-Mart stores.
 
And few were the trips to Wal-Mart when we did not run into friends and relatives with whom we could visit and catch up on the local happenings. Other national chains followed Wal-Mart to our towns. Sales tax collections were up. Our towns made improvements. We felt blessed.
 
In the first 20 years or so Wal-Mart opened over 1,000 stores and never missed. Each one was successful. Actually, in some instances the success exceeded the vision of Wal-Mart and a larger store had to be opened.
 
It seemed that only the merchants in the smaller towns around and some of the local main street competitors suffered.
 
A few of us lamented this loss. These merchants had been the backbone of our towns. They had funded events and projects that boosted our towns. They held public office. They had a vested interest in the well-being of our town.
 
Wal-Mart and the other national chains, while they made some contributions, did not provide the leadership in the community that we had experienced from the main street merchants in the past. But most of us did not really take notice of this.
 
Also, in those early years Walton stressed that they were buying goods produced in America. He even entitled his autobiography, Made in America.
 
The point that was made is that many of the goods sold at the small town Wal-Mart were produced by plants in other small towns across our land.
 
Things changed. Wal-Mart stores expanded. First they opened in the small cities of America. They began to compete with Kmart. They were successful. Then they began to move into the suburbs of the major cities. And now Wal-Mart is appearing inside major cities.
 
Further, Wal-Mart expanded into the grocery business. To house this expansion many of the new stores were much larger, “Supercenters.”
 
And as this has happened the older, smaller stores, such as the one in Livingston, have become expendable.
 
The pressure to keep prices low seems to have driven Wal-Mart to buy more and more things produced in other nations. For example, they, like so many retailers, offered more and more items produced in China.
 
Wal-Mart needed more clerks. The supply of workers who desired to be “part-time” employees was exhausted. But in order to keep prices low they continued the policy of hiring the clerks on a part-time basis, even when the workers in the cities needed full-time employment with benefits. So far, in spite of mounting criticism, Wal-Mart has not changed this policy.
 
In the process Wal-Mart became the leading retailer in the United States. And the family of Sam Walton became the richest one in our nation.
 
The Walton family’s wealth is surprisingly not a summation of all the profits made on all those tires and socks they sold. Rather it is a reflection of the rising price of Wal-Mart stock.
 
Long gone are the days when a stock’s value was determined by actually calculating the future dividends and returns to investors. No kidding, companies really did send out company profits to shareholders.
 
Today stock values are invented by fantasizing about how fast a company can grow sales and revenues, somewhat irregardless of profitability and return to investors.
 
It seems that increasing the value of stock has become the primary focus of the management of corporate America. This is true at Wal-Mart and most every place else.
 
To be very specific, the value of the stock has become more important than the losses and inconvenience of the folk in Livingston, Ala. It is more important than the needs of the clerks. It is more important than the needs of textile workers in the South. It is more important than the needs of “blue-collar” America.
 
It seems that Wal-Mart has forgotten the very people that made it possible for it to become the leading retailer in America and in the world. Those of us with long memories recall how J.C. Penney and Sears did the same. They are long gone from the courthouse squares of rural America.
 
But Wal-Marts, look out. The “dollar stores” are moving into the small towns of our nation. They have learned from Wal-Marts.
 
Gary Farley is partner in the Center for Rural Church leadership, Carrollton, Ala.