She was leery of Wal-Mart's site plan. "I tried to call Wal-Mart and see if its people would come up and talk to us about it," she recalls. "They wouldn't set foot in the state until they had gotten all the approvals." In other words, Wal-Mart's message to Naylor was, Talk to our hired guns in Maine.
Second, she worried that Wal-Mart would accelerate the drift of business out of downtown Brunswick to Cook's Corner, where a new courthouse complex, a hospital, and a new mall were going in, creating what Naylor called an "economic vortex." "Wal-Mart is not going to generate new sales," says Naylor. "It's going to earn its money from existing stores. It's not providing great jobs with a future. Wal-Mart will not do its banking in Brunswick or in Maine. We are a colony market to it. It will use our consumers and our labor as its raw material, and everything except the low wages and the tax revenues it provides will be pumped out of state."
Yet no matter what Naylor thought, she had little choice, as the issue boiled down to the realities of pulling power and leakage. "If I had gone to my town manager and said, 'We have to stop Wal-Mart because these are low-income jobs, Wal-Mart does all its banking out of state, and it will put a real strain on services,' I'd be told, 'It's 200 jobs, we'll get tax revenues, and if we don't take Wal-Mart, Bath will.' I couldn't go to the town council and say, 'I lost Wal-Mart.' If I did, I'd be out of a job."
* * *
As Wal-Mart readied to open its Brunswick store, in late April, concern prevailed in Bath over who would draw the Wal-Mart bullet in this game of Russian retail roulette. "I think that man's business is going to be devastated," says Halcyon Blake over lunch one day, referring to Don Povich, a specialty clothier on Front Street. Povich says he isn't worried. He endured the first wave of flight to the malls, 20 years ago. Another merchant worries that Jayne Palmer at Gediman's would get hurt, while Palmer points out that Wal-Mart seems to be stalking Bob Reny by locating near his stores. Reny foresees his sales initially declining 10%, and then rebounding because Wal-Mart can't match him on value: "With Wal-Mart there's a lot of hype and no reality," he says defiantly.
To date, Wal-Mart has opened seven Wal-Marts and two Sam's Clubs in Maine. It will not reveal how many locations it will eventually have in the state. Company spokesman Don Shinkle says, "Wal-Mart believes that the type of discount retailing we do will be fully appreciated in Maine." He adds, "Regardless of where we locate, acceptance is going to be very good. There is nowhere that we are not accepted with open arms. Our results in Maine to date are nothing short of overwhelming."
Asked for specifics, Shinkle demurs. "We do not share numbers."
Whereas Shinkle showed predictable confidence, the locals displayed a native skepticism, which held that Maine was different and that Wal-Mart's highly centralized operation -- the Rockland store had its lights and thermostat controlled by a company computer in Oklahoma -- would be a negative in a traditional state like Maine. On top of that, Wal-Mart had brought in a manager from Florida to run its Rockland store.
Despite making a huge investment in Maine, Wal-Mart, locals suspected, had done scant market research. A number of sources claim to have heard as much directly from Wal-Mart officials. One source, Amy Naylor, the planner in Brunswick, recalls a meeting where "they told us they just had a feeling it was going to be right."
Don Shinkle replies that Wal-Mart may move fast, but it moves with care. "You can rest assured that some of the finest marketing and real estate minds in the country work for this company." That may be so, but to what extent were those minds, calling the shots from headquarters in Arkansas, oblivious to nuances in regional markets? When the company built its store in Bangor, it installed electric heat, which, as every homeowner who has endured a Maine winter knows, is about three times more expensive than oil heat in the state. In its first month the Bangor store ran up an electricity bill of $80,000 -- whereupon it ripped out its electric heating system and replaced it with oil.
* * *
The Bangor blunder, Wal-Mart's opponents contend, revealed the hubris of a large national corporation that was sure it could roll out its formula to every corner of the country. But would the formula work in Maine? A recent study commissioned by a large local business projects that retail sales in Maine will grow only between 1% and 2% in each of the next 15 years. The state's retail environment has already been honed by years of rigorous discounting in the form of numerous factory-outlet stores coupled with an enduring recession. Says Dave Morse, the publisher of a number of weekly Maine newspapers: "If you've survived in Maine to this point, you know what you're doing. You're not just a shopkeeper, you're a merchant."
Maine is not a wealthy state, and its population is older than the national average. Older people tend to shop on Main Street. Living in the land of L. L. Bean, Mainers know the meaning of value and quality. "These are people who will walk into a store, buy the one thing on sale, and walk out," says Morse. "They shop for value, and they shop hard." Many simply have found Wal-Mart lacking. "Everybody I've talked to has said its inventory is phenomenal and the layout is nice," he says, "but its prices are not always the cheapest, and its quality is not always the best."
What's more, Wal-Mart paid far too much for the Rockland site, asserts John Morris, a local architect and developer who six years ago built a nearby shopping center that now competes with Wal-Mart. Morris notes that Wal-Mart paid $2.3 million for an eight-acre site -- and added another $1 million in improvements. "I know a development group that had an option on the site two years earlier for $800,000 and didn't exercise it," he says. He doubts Wal-Mart will be able to generate enough revenues in Rockland to service its debt and turn an acceptable profit. "If your net margin is 5% and you paid $1 million more for the site than you should have, that means you have to generate another $20 million in sales to compensate."
