Again, a high percentage of part-time jobs is not atypical in retailing, and Wal-Mart's Don Shinkle maintains that the company's work force is at least 60% full-time. But Wal-Mart hardly defines full-time in a conventional way. By the company's standard, any employee who works at least 28 hours a week is eligible for benefits -- and thus is considered full-time.
Beyond the Wal-Martspeak about who qualifies as a full-time worker, Bath had bigger things to worry about, namely, Wal-Mart's quest to vertically integrate the shopping experience. The traditional Wal-Mart discount store -- which powered the bulk of Wal-Mart's first $50 billion in sales -- can be seen as just the first of three waves of multibillion-dollar corporate growth. The second wave began in 1983, when the company entered the club-store/warehouse business, opening its first Sam's, which sold dry goods in bulk. Bill King recalls recently going into a Sam's and finding motor oil priced below what his distributor charges. That meant that Sam's, buying in significant quantities, had the power to "turn the market on itself," as King puts it. Retailers could simply bypass their distributors in favor of Sam's -- and Sam's could take revenues from local merchants on two levels: as a supplier at the wholesale level, and as a competitor at retail. Wal-Mart envisions being a $100-billion company by the year 2000, with the spread of Sam's stores to as many as 500 units fueling much of that growth.
And then there is the third wave of the Wal-Mart growth strategy, which could turn the corporation into a retailing colossus. That involves entering the $362-billion-a-year grocery market, which Wal-Mart has begun addressing through its Supercenters, combination discount stores and supermarkets. (The first of those opened in 1988, and today there are 35.) Also, in 1991 Wal-Mart bought McLane's, a grocery distributor with $3.7 billion in sales. In 1992 it bought the Phillips Cos., an Arkansas-based grocery chain with $290 million in sales. Taken together, those two acquisitions allow Wal-Mart to operate a controlled experiment and refine the concept before rolling it out nationwide.
* * *
Bob Reny, like any entrepreneur, loves to turn a buck. But he also has a thing about stores' being open on Sunday. To him, Sunday is for church, rest, and family -- not to mention ice fishing and berry picking. For 28 years Reny had successfully fought the repeal of state blue laws that denied major stores Sunday hours. Says Reny, "I believed that if you rescinded those blue laws, you would irrevocably change the face of Maine." Finally, two years ago, Reny lost the blue-law battle when his opponents, backed by $600,000 from large retailing interests, won a referendum by only two percentage points, having outspent Reny's side 12 to 1.
Earlier, on the New Hampshire side of the border, Wal-Mart had built a distribution center and readied to open up in Maine, if and only if the state's blue laws were rescinded. Bob Reny says that 100,000 Mainers work in retailing, "and a lot of those people have families. Now some of them will have to work on Sundays." He notes that this puts the squeeze not only on people working for large retailers who can afford to pay their employees time and a half to work on Sundays but also on small retailers like him who are forced to keep pace.
The repeal of the blue laws was the first example of the muscle large interests like Wal-Mart could bring to bear when they entered a market. The second occurred in Augusta, the state capital, when the legislature voted to allow the newly built Augusta Mall -- to be anchored by a Wal-Mart -- to use $7 million in sales-tax receipts it generated for improvements specifically around the mall. Reny was fighting that measure until he went away one weekend -- and it was summarily passed. He considers such a tax break outrageous, since it uses public dollars to give further advantage to the mall against downtown merchants, who are already reeling from the flight of business to the mall.
In November 1992 Wal-Mart opened its second Maine store, in Rockland, 45 miles north of Bath. In one week it received 2,800 applications for work and hired 200 people. Some left their existing jobs to work for Wal-Mart, believing it would offer steadier employment. After the Christmas rush ended, the store laid off some newly hired workers. In December, the Rockland Wal-Mart's first full month of operation, Rockland showed a 55% gain in retail sales. The four surrounding towns showed declines ranging from 6% to 17%.
* * *
Some of that big gain could doubtless be chalked up to initial curiosity about the new Wal-Mart store, but it also pointed out the two-edged sword that Wal-Mart represented. Wal-Mart, in industry jargon, had "pulling power." It also stanched "leakage." Before Wal-Mart arrived, Rockland's leakage rate was about 50%. The city lost half its retail business to neighboring towns: for every $1 Rockland consumers spent in Rockland, they spent another $1 somewhere else. And that spoke directly to the quandary Wal-Mart created for small towns wherever it went.
If your town doesn't attract a Wal-Mart, then a neighboring town might, translating into increased trade and tax revenues for your neighbor -- and less for you. Your neighbor's pulling power creates your leakage. That was the problem faced by Amy Naylor, the town planner in Brunswick, when Wal-Mart bought property in Cook's Corner, an area about two miles east of Brunswick and four miles west of Bath. Recalls Naylor, "We had just finished a townwide plan that really brought home citizens' desire to create neighborhoods, keep the town livable, and have a human scale. That came over clearly."
Wal-Mart entered on the heels of that debate. "People were knocking on my door for two weeks, asking, 'How can Wal-Mart come in after we've just been through this process? This is not what we want,' " Naylor says.
