Palmer and Bill King, the owner of RVI, which sells motorcycle and snowmobile accessories, led the faction that split off from the chamber of commerce to form a new, more activist group, the Bath Business Association (BBA), which claims 75 members. "Wal-Mart is a threat to every small business in Bath," says King. "That's not to say it's going to put everyone out of business, but there are certain things you have to do or else it'll kill you." He immediately went out and bought some Wal-Mart stock. "I started photocopying its quarterly P&Ls and bringing them to our meetings just to scare people."
Bob Reny, who had spent four days trooping through Wal-Marts in Florida, came to Bath to speak before the BBA about the company and its tactics. The association also organized two exhaustive four-hour sessions in the face of Wal-Mart's imminent arrival, which amounted to sort of a plumbing of the civic soul. "Each of us had to make a commitment of what we were willing to do to make the community move forward," recalls Halcyon Blake.
In the spring of 1992 Ken Stone came to Maine to address merchant groups from towns in the path of the Wal-Mart advance. His advice was simple and direct: don't compete directly with Wal-Mart; specialize and carry harder-to-get and better-quality products; emphasize customer service; extend your hours; advertise more -- not just your products but your business -- and perhaps most pertinent of all to this group of Yankee individualists, work together.
In 1992, after hearing Stone's pep talk, Jayne Palmer increased her advertising budget by 30%. She computerized her inventory and tied her system in with General Electric Credit, enabling her to order GE products direct from the company and save money by getting better terms. She extended her hours and eased credit to customers. She created a room in her store where people could watch TV while their children played on the floor. She cut back on the low end of her inventory, knowing Wal-Mart could always undersell her there.
John Hichborn, who operates the True Value Hardware store in Bath, which had been in his wife's family for four generations, felt he was well positioned -- even though Ken Stone's Iowa data showed that hardware stores took a huge market-share hit, minus 30.9%, when Wal-Mart came into the state. "Our customers know our inventory and are responsible for it," says Hichborn. People had been coming to the store for generations and apprising Hichborn of their hardware needs, and there they'd always find employees who knew the inventory. "Each department is run distinctly with two employees responsible for all decisions within it, including purchasing and merchandising," says Hichborn.
Craig Burgess extended the hours of the family market and stepped up promotions. "It's important that we keep on emphasizing the low prices we do have," he says. He claims that Wal-Mart creates the illusion that it always undersells the market, based on a handful of heavily marketed items at rock-bottom prices, but that the rest of Wal-Mart's inventory is not all that competitive on price. He says that if customers perceive that Wal-Mart consistently undersells specialty retailers, those retailers are as good as dead.
The Bath merchants also came together for the Christmas 1992 shopping season, with 39 of them kicking in $220 each to fund a campaign promoting downtown as a shopping destination, the first time that had ever happened. They lit every tree in town. Sales in December were brisk. Bill King recalls how customers coming to his store told him how relieved they were to get out of the malls and do their shopping in the relative peace of downtown Bath.
The merchants' efforts even extended to some informal intelligence gathering. Some of them used the same contractors that had worked on the Wal-Mart construction. They tapped into that source to guess at a completion date for the building, so they could mount a preemptive ad campaign. They continued to comparison shop at Wal-Mart stores in New Hampshire, in the process getting thrown out for taking notes. They then started using concealed tape recorders activated by voice.
Wal-Mart could also play that game. Last summer it sent Don Shinkle, its vice-president of corporate affairs, to Maine for two weeks to soothe groups of local merchants. Jayne Palmer recalls few if any substantive answers to questions at the meeting she attended.
In late January 1993 the Holiday Inn in Bath received a call from Wal-Mart asking for a quote on 30 rooms for six weeks -- an obvious tip-off of the grand opening. Which six weeks, the motel asked? We can't tell you that, replied Wal-Mart, just give us a price.
* * *
Matt Eddy, the town planner in Bath, says, "Wal-Mart is exceptionally well organized. Before most people knew it was even coming to Maine, it had four or five building sites it had strong options on and was going through the simultaneous review-and-approval process."
Wal-Mart likes to move as quickly -- and as quietly -- as possible. That is understandable, given that wherever the retailer goes, it sends inevitable ripples through local economies. Developers and bankers become camp followers of Wal-Mart because they know that when the company puts up a building, it immediately creates value for miles around. Andy Rosenthal, a Maine developer who has worked with Wal-Mart, notes that typically Wal-Mart owns land until it has its building built -- then it sells the land and becomes a tenant. "That gives it control when the project is under construction, and flexibility once it's up," Rosenthal explains.
Wal-Mart thus recoups its investment and is on the hook only for its lease. Ken Stone explains the rationale behind that strategy: "If K mart comes into the market with a bigger store, you can bet your bottom dollar that Wal-Mart will soon find a place for a bigger store." He notes that according to Wal-Mart's 1992 10-K report, the company owns only 16% of the properties on which its Wal-Mart stores are located.
That is not atypical for large retailers, which are not, after all, in the land business. But Wal-Mart's tendencies implied a lack of commitment that worried people in Bath, many of whose families and businesses had stayed put for generations. Another troubling element involved the disjunction between how many jobs Wal-Mart claimed it would create and how many of those jobs were really only part-time -- as many as 60% by some estimates. "That creates a hidden cost to the community," asserts Jayne Palmer. She reasons that if Wal-Mart ends up "paying less than people can live on" and doesn't offer sufficient benefits, local taxpayers will simply end up subsidizing a ragtag work force.
