Wal-Martizing Northern Michigan - Will the World‘s Largest Retailer Sell our Soul for Less?

March 24, 2004

Fears over the loss of local jobs, businesses, and the soul of a small town are driving the fight against a proposed Wal-Mart Supercenter in Charlevoix Township. It‘s a battle being fought across the country by many small towns -- and increasingly, big cities -- that have seen the damage done over the past decade by the business practices of the world‘s largest retailer.
“We‘re seeing a grassroots movement across the country fighting Wal-Mart,“ says Robert Hoffman, president of the This Is Our Town group in Charlevoix that opposes the project. ‘Hundreds of communities are trying to fight Wal-Mart.“
While being interviewed by Mitch Albom on WJR-FM in Detroit recently, Hoffman says the station got calls from all over the state blasting Wal-Mart. “We got phone calls from places like West Branch and Bad Axe saying that when Wal-Mart came in, it destroyed the local economy,“ he notes.
Hoffman‘s group of 30-40 core members have collected close to 3,000 signatures from local residents on petitions opposing the new supercenter. At stake is a 157,400-square-foot Wal-Mart Supercenter which would be located near Charlevoix‘s airport and Stover Creek on U.S. 31 South. In addition to groceries and retail sales, the center would include a tire and oil change facility and a 779-space parking lot. If the supercenter clears local zoning and environmental hurdles, it will open in the spring of 2005.

LOCAL CONCERNS
Until a few months ago, those hurdles seemed like a done deal, since the 17-acre site is zoned commercial.
But a host of local fears may influence the outcome.
“We have a number of different concerns,“ Hoffman says. “We have economic concerns as far as the impact on the community and local business. Statistics show a net loss of full-time jobs when Wal-Mart comes to town in addition to being detrimental to local business. And quite often the cost of providing local services is greater than the tax gain to the community.“
Another concern in environmental. The supercenter would be located next to wetlands which feed into Stover Creek, which runs in turn into Lake Charlevoix at the Ferry Beach swimming area. Up to 13.5 million gallons of water run-off from the 17-acre parking lot and building is projected to wash into the creek and Lake Charlevoix, tainted by pollutants from thousands of vehicles.
“That‘s the equivalent of dumping the contents of our community swimming pool three times a week into Stover Creek,“ Hoffman says, adding that the Michigan Department of Environmental Quality and U.S. Army Corps of Engineers are presently studying the matter.
Another concern is traffic -- a major problem considering that Charlevoix is legendary for its mile-long tie-ups getting through town in the busy summer season.
“In the summer, traffic backs up all the way from downtown to M-66,“ Hoffman says. “If Wal-Mart brings in the number of customers it claims, then the traffic here will back up even more.
“But the most important concern we have is the impact on Charlevoix‘s small-town character,“ he adds. “If we bring a new big box store to town, it will possibly destroy what we have in Charlevoix.“

BIG HEAT
Wal-Mart has taken plenty of heat across the nation in recent years for its cutthroat pricing tactics, which tend to force smaller retailers and grocers out of business. According to food industry analyst Sandy Skrovan of Retail Forward Inc. in Columbus, Ohio (quoted in the Detroit News), every Wal-Mart Supercenter that opens over the next five years will put two smaller grocery stores out of business.
Evidence of that trend is already clear in Petoskey, where Carter‘s Food Center closed its doors last year after 20 years in business, unable to compete with the new Wal-Mart down the road. Plans for a new Wal-Mart Supercenter in Cadillac were reportedly a contributing factor to the closing of a Glen‘s Market there in 2002. The Cadillac supercenter of 200,000 square feet is being constructed across from the present Wal-Mart store and is expected to open in 2005.
Several months ago, Acme denied a plan for a supercenter to be located near the Grand Traverse Resort. If approved, local supermarkets could find themselves fighting for survival, as is currently the case in the Detroit area for chains such as Farmer Jack‘s.
For small merchants -- and even supermarket chains -- the arrival of a Wal-Mart Supercenter can be a life-and-death business proposition, since the corporation buys on a global scale and has the clout necessary to squeeze its suppliers for the lowest prices. Although this sounds like a good deal for local consumers, it‘s also true that the dollars of area residents are funneled to the corporation‘s headquarters in Bentonville, Arkansas, rather than back into the local economy.
Even Meijer, which pioneered the first superstore in 1962, is said to be reeling from the Wal-Mart effect. In January, Meijer laid off 1,900 managers in five states. Presently, the Grand Rapids-based chain of 158 stores has begun a remodeling campaign in hopes of keeping its customers loyal against incursions by other big box store operations such as Wal-Mart, K-Mart and Target.

MONEY MATTERS
Dramatic differences in wages and benefits also create problems for Meijer and supermarkets across the country trying to compete with Wal-Mart.
Wal-Mart‘s non-union employees -- called “associates“ by the company -- make an average of $8 per hour, whereas a Meijer employee can make more than $18 per hour, according to the Detroit News. Similar dynamics have driven a ferocious grocery store strike in California, where striking union members are demanding more pay and benefits from supermarkets which are unable to compete.
Nationwide, grocery stores make less than one percent profit on the products they sell, so when Wal-Mart uses its buying power and low wages to drive down the price of products on its shelves, other retailers are forced to follow suit or lose customers, Skrovan says.
In addition to low wages, Wal-Mart employees also pay up to $2,844 per year, plus a deductible, for medical coverage, according to an April, 2003 article in Mother Jones magazine. As a result, some 40% of Wal-Mart‘s employees choose not to receive coverage from their own company, and may have to rely on Medicaid.
The Mother Jones article by Karen Olsson claims that Wal-Mart is setting the standard for wages and benefits in America, owing to its huge size and rapid expansion. “Americans can‘t live on a Wal-Mart paycheck,“ says Greg Denier, communications director for the United Food and Commercial Workers International Union. “Yet it‘s the dominant employer, and what they pay will be the future of working America.“

WORKER WOES
Although Wal-Mart made $6.6 billion in profits in 2002, its average hourly worker earned only a little more than $18,000 per year. Numerous lawsuits have also arisen from the practice of Wal-Mart managers forcing employees to work unpaid overtime. In 2003, the corporation was being sued by its own workers in 27 states for wage-and-hour law violations.
Things are hardly any rosier for hundreds of thousands of workers manufacturing Wal-Mart products in the People‘s Republic of China. According to the Washington Post, more than 80% of the 6,000 factories Wal-Mart buys its products from are in China, and these are staffed primarily by poor migrants driven from the countryside to industrial cities. A Chinese worker receives about $120 per month, often laboring long hours in conditions that would be considered unsafe in the U.S., the Post notes.
One 27-year-old mother who works in a Chinese toy train factory supplying Wal-Mart says she can‘t afford to buy toys for her own nine-year-old son on her $75 per month salary, according to the Post. Rarely can she afford to buy meat for her family‘s table. “In four years they haven‘t increased the salary,“ she says.

THE GOOD NEWS
It‘s difficult to obtain a response from Wal-Mart on allegations against the company. Numerous articles written about Wal-Mart have a pattern of “no comment“-style responses from spokesmen, or answers that dodge the issues. For this article, an Express call to a Wal-Mart press line was directed to John Bisio, a regional community affairs manager based in Arkansas. The scratchy recording on Bisio‘s voice mail said he was out of town for the week. For a company with $245 billion in annual sales, Wal-Mart doesn‘t seem to have much in the way of a press relations department.
But if Wal-Mart seems reluctant to air its laundry in the press, at least its website offers information on the company. Www.walmartstores.com offers information on the economic benefits of the company‘s 51 stores, 8 supercenters and 21 Sam‘s Clubs in Michigan. Wal-Mart says it employs more than 20,000 Michigan workers and gives back $4 million statewide to community causes. The company also says it spent $1.8 billion on in-state suppliers; paid $28 million in state and local taxes; and collected $150 million in sales tax for Michigan‘s benefit.
The statistics underscore the fact that although Wal-Mart‘s products may be primarily from China, the company provides local jobs for contractors building its mammoth stores.
Wal-Mart also claims to pay competitive wages (the $8 per hour claim to the contrary), and has no dearth of applicants among its blue apron-clad army of 1.3 million associates. In fact, the company is the largest private employer in the world. For Americans with few job skills, the company‘s blend of flag-waving Americana and down-home ambiance can make Wal-Mart a desirable employment destination.
Although you don‘t have to look far on the internet or the popular press to find cascades of information despising Wal-Mart and its practices, it‘s also true that it was named the most admired company in the U.S. by Fortune magazine last year. Wal-Mart was also named one of the most philanthropic companies in the country in 2002 for donations of more than $150 million to support community programs in its 3,400 locations. It has donated more than $184 million over the past 19 years to United Way chapters, $80 million in scholarships since 1979, and $265 million to hospitals for children‘s care.

P.R. OFFENSIVE
Wal-Mart has launched a public relations offensive of television commercials, featuring hearty, solid-citizen types claiming that the company supports small towns through fundraisers and contributions to local causes such as D.A.R.E.
But critics such as Hoffman claim that the commercials are a sign that Wal-Mart is losing its good neighbor image.
“Nationwide, people are starting to change their minds about Wal-Mart,“ Hoffman says. “Look at their commercials -- 10 years ago they were claiming their products were made in America -- now it turns out that they buy 80% of what they sell from overseas. Companies that are good companies and good neighbors don‘t have to tell people about it in TV commercials.“
On Wednesday, April 28, a special meeting of the Charlevoix Township Planning Commission will be held at Charlevoix High School to discuss the fate of the Wal-Mart Supercenter there. This Is Our Town plans to prep for that meeting with a community forum at the high school on Thursday April 15 at 7 p.m. The event will feature author Al Norman, who wrote “Slam-Dunking Wal-Mart,“ a primer on “How you can stop superstore sprawl in your hometown.“
“We just want people to be informed,“ Hoffman says. The planning commission has a number of criteria to look at and we feel that when they have all of the information, they will have the grounds needed to deny the Wal-Mart site plan.“
Hoffman notes that there are people in the Charlevoix area who want a Wal-Mart Supercenter in town, but they already have a nearby alternative. “We recognize that people want Wal-Mart‘s lower prices, but we say to them that we already have one -- it‘s 17 miles away in Petoskey. But as far as having one in Charlevoix, the detriments far outweigh the advantages.“

For more information on Wal-Mart and the situation in Charlevoix, see www.thisisourtown.org or www.walmartstores.com.