Wal-Mart Opening in Louisa

A Wal-Mart is opening right in the middle of downtown Louisa, WCAV reports, and Mayor Jim Artz couldn’t be happier. He describes it as being “like Santa Claus…coming to town.” Just one person interviewed seems to have any sense, the grandmother of James Grooms, who points out that Wal-Mart will put out of business every local establishment still hanging on. The mayor says, simply, “if you can’t stand the heat, get out of the kitchen.”

Wal-Mart’s business strategy is, famously, to move into economically hurting areas like Louisa, make their prices so low that they shut down the mom-and-pop businesses, and then they raise their prices again when they don’t have any competition. In exchange, locals get minimum wage jobs. I’m mostly blogging about this so that I’ll be able to link to my “I told you so” when the mayor gets run out of town on a rail in a few years.

24 thoughts on “Wal-Mart Opening in Louisa”

  1. sort of make sense with the rumor going around about Wally World putting a supercenter right on the Greene County border. I heard WM has been trying to put a super center in Albemarle for a long while. And of coarse that has been subject to resistance. Now WM is rumor to close the current one and move to the greene county border.

    Now if you put a WM in Louisa, you make everyone south of CVille happy.

  2. Like George Will, from whose column of yesterday I will shamelessly steal from in my rebuttal to Waldo’s asinine post, I do fully understand liberals’ hatred of Wal-Mart. I mean I know it’s wrapped up in the usual liberal elitism a

  3. (continued from above) and condescension toward the grubby masses, but come on! According to Will, Wal-Mart is the “most prodigious in the history of the private sector in this galaxy” with 1.3M employees – almost as many as serve in a uniformed capacity in the US armed forces. “By lowering consumer prices, Wal-Mart costs about 50 retail jobs among competitors for every 100 jobs it creates. Wal-Mart and its effects save shoppers more than $200 billion a year, dwarfing government programs like food stamps ($28.6 billion) and the EITC ($34.6 billion).”

    Nevertheless, it remains the target of a relentless liberal jihad. No doubt some of this is due to Wal-Mart’s successful resistance to unions, but with 127 million customers a week is demonizing Wal-Mart really such a great idea? What’s next on your hit list, grandma and puppies?

    And by the way, I do not believe it’s true that Wal-Mart lowers prices in order to drive away competition only to raise them again when there’s nobody left. You’re thinking of a bad TV movie or maybe only an Afterschool Special. Wal-Mart’s business model enables it to create and maintain low prices, regardless of the competition.

  4. Wal-mart lowers prices for everybody all the time. This is a bad thing.

    Local gas stations don’t drop prices fast enough. This is a bad thing.

    Low prices bad. High prices bad.

    I’m very confused.

  5. JS, I’m not arguing that Wal-Mart has a right to exist and do business. Nor am I arguing that they fit a libertarian ideal of the strong surviving. But the town of Louisa is about to have a monoculture — a single business that is responsible for the overwhelming majority of their retail purchases and their tax base. A monoculture is as bad in business as it is in nature and in computer security. Wal-Mart then holds tremendous sway over the town of Louisa, and the town is functionally stuck with whatever decisions that the company makes.

    Much like Detroit finally realizing how stupid it was to premise their entire model for existence on automobile manufacturing, Louisa will come to regret allowing Wal-Mart to occupy a similar position in their town.

  6. Town of Louisa is not south of Charlottesville. It’s east and almost in metro Richmond (though a bit closer to Cville).

  7. have you ever been to louisa? there isn’t any competition for wal-mart to drive out of business. everyone i know from louisa has to go to c’ville or richmond to do all their shopping.

  8. JS – yes, George Will presented compelling evidence that WalMart is an extraordinariliy successfully economic giant. We have known for many, many years – since the Robber Barons – that it’s perfectly possible for an economic giant to crush all the “competition” – monopolies are very good at protecting their monopoly.

    I think those low prices will be just wonderful until they’ve driven out the competition and can then, like all monopolies, extract much higher prices. They (like Food Lion) do this consistently wherever they go.

    The only problem with all those jobs they create – what is it George Will said, “100 new jobs for every 50 they destroy” – is that you can’t afford to shop, even at Walmart, on what they pay. So, most of those folks wind up getting a second job. That’s one way to undo labor laws – everybody will work 12-16 hours a day, it’ll just be for two different employers. The employment numbers do still net out.

    Economic Serfdom==the ultimate ‘service economy’

    I have a question for JS: have you ever had to make it independently on a WalMart style job?

    Colfer – it’s much easier to come north to C’ville and pick up 64 and then head to Louisa.

  9. Indeed, there is very little retail in Louisa right now. There’s a Food Lion, but Food Lions never, ever go away.
    The McDonald’s and little Italian Restaurant will be fine. Also, Louisa’s main street is already dead, so there’s no fear that Wal-Mart will kill that.
    However, If I was a merchant in the town of Gordonsville (10 minutes away) or Orange (20 minutes), I’d be feeling a little nervous this morning.

  10. There’s another problem with massive corporations that drive out local business — where the money goes. Within an hour or two of buying something at WalMart, your money is wired out of state. In contrast, by buying something at a locally owned business, your money stays in the area. WalMarts suck the money out of a town. (This goes for Target and the other big box stores as well, of course.)

  11. Tim,

    I simply cannot understand your point-of-view at all.

    If keeping business local is the key to success, Louisa should be thriving. From the sounds of things though (I’ve never been there and had to pull up a google map — ~30 miles due east of the University), they are not.

    You completely neglect that the big box stores bring in lot of cash, which pays more employees and grows the wealth (in part due to vast improvements in efficiency). It doesn’t just end up in the hands of a few small business owners (and let’s not pretend that small business owners are necessarily any more altruistic than big box owners.) You also neglect that the products bought and sold are most likely not manufactured locally. By the time they appear on the store shelves, half their sticker price has already been wired out of the city. And what if the local store owner is a smart investor? He could just as easily be wiring his profits to a banker in New York who invests in (gasp!) Wal-Mart or Exxon or McDonald’s instead of Buddy’s Gas & Go or Cletus’s Garage.

    Your logic indicates that any nationally owned business in a small location — or any location — generates a net void. HOW CAN THIS BE? We should all be broke!

    Furthermore, for everyone else commenting, I have never in my life seen a stand-alone Wal-Mart. Every Wal-Mart I have ever encountered is surrounded by a plethora of other businesses — some local some not.

  12. On Wal-Mart monopolies…

    In the small towns where the small, local businesses are always afraid of being put out out of business, is there really competition to begin with?

    If there is only a single grocery, or hardware store, or clothing retailer and if monopolies are specifically bad, does it matter who is in charge of the monopoly?

    And if there is in fact “competition” among different retailers in the same sector, but prices are higher, can we not assume some amount of collusion in such a small market? Isn’t collusion just as bad?

    I think cville_libertarian is half right. Monopolies are good at protecting their monopoly. But you don’t have to be a retail giant. You can just be a podunk small business owner with friends on the city council.

    And with that I’m finished commenting for the weekend as it’s time to switch into college football fanatic mode. And yeah, I’m thinking Western Michigan at 9.5 is a good bet.

  13. NoBrainer – you’re right, there is no difference between one local monopoly and another – from the consumer standpoint. But, as Tim says, the local business keeps the money in the local economy. The small local business owner lives and spends in his community.

    A Louisa Walmart will keep some dollars that would otherwise go down the road to a WalMart (or other Big Box) in Henrico, but beyond the business taxes, it’s not clear that the dollars will be any more local. You’re making the assumption that the Louisa Walmart would bring non-Louisa dollars into Louisa. I doubt that – it might keep some of them at home.

    I doubt the folks in Gordonsville or Orange need worry – I expect they already have people coming to the c’ville Walmart. FoodLion in both those places (Orange and Gordonsville) is perfectly capable of matching WalMart pricing.

  14. I saw the figure once on percentage of all retail sales that goes to chain stores. It’s really high. Practically all. I’d really lost perspective living around the Cville Downtown Mall.

  15. If I was a merchant in the town of Gordonsville (10 minutes away) or Orange (20 minutes), I’d be feeling a little nervous this morning.

    The people I know in Orange are already driving to the Super Wal-Mart in Culpepper. And most of Gordonsville is already all owned by a single individual* (and that’s all the buildings on the “historic” main street- with the exception of the Dollar General and the ABC store).

    [*= I can’t remember what the fellas name is though.]

  16. Waldo: there are no businesses in Louisa still “hanging on”. Recently, while driving thru Louisa, my children asked me: “Where do people buy clothes in Lousia?” We drove around looking for an answer, and the only place we could find was the Southern States store, where you could at least buy bib overalls. As evil as it sounds, the Walmart might actually bring commerce back to Louisa, where it is currently noticeably absent.

  17. I always go back and forth on Wal-Mart, because my finances often require me to shop there BUT I believe that their corporate philosophy is just horrible. Whenever I shop there, I feel slightly dirty, because I know someone, somewhere along the way, had to pay for those “low, low prices,” be it workers in a sweatshop in China or the environment off the coast of Chile, where the vast majority of Wal-Mart’s $4.84/pound “Atlantic” salmon is commercially farmed.

    One thing I don’t think we’ve touched on in the comments is: how will Wal-Mart be as an employer in Louisa. I have heard that the folks who work at the distribution center in Zion Crossroads can earn a fairly good wage. Associates at a new superstore will likely not. There have been countless tales of unpaid overtime and discrimination. Most of their workforce can’t even afford the relatively paltry health insurance the company usually offers. Wal-mart has a very active union supression program, meaning you have low-waged employees with no collective bargaining power.

    Now, a local mom-and-pop probably wouldn’t offer benefits or higher wages or a union shop either, either, but Wal-Mart is not a mom-and-pop. They are the world’s biggest employer, and they should hold to a higher standard — not the lowest.

    There was an excellent “Frontline” sometime back that explored the Wal-Mart phenomena, and while I wouldn’t go so far as to say it was balanced, it was an interesting look at some of the collateral damage of their manner of doing business. It’s avaliable via streaming video at http://www.pbs.org/wgbh/pages/frontline/shows/walmart/

  18. “Town of Louisa is not south of Charlottesville. It’s east and almost in metro Richmond (though a bit closer to Cville). ”

    Colfer… Oddly enough Louisa County is considered to be part of the Richmond Metro Area.

  19. 60 years ago, a paps with 4 kids and wife at home could work at the local shoe store and with time and a savings spirit, could live the American Dream with a little townhouse or property 10 miles out in the country. Paps spent time with the kids teaching them baseball and good manners.

    Today, paps is working overtime, mom is working 2 jobs and the kids eat shit for dinner. But they do have videogames, 3 TVs, a boom box in every room can and get all that at Wal-Mart for cheap cheap cheap! Why do they have 3 TVs? One for every child! You know, Nickelodeon is the baby sitter!

    And Bush is killing thousands in the Middle-East to safeguard our “way of life”!!! What a plan! Yeah, the one where 3% of the population is living like Sheiks in 5 million buck homes in gated communities! But none of them shop at Wal-Mart – I’m puzzled…

  20. Thanks for that link, Clio. I try to avoid Wal-Mart as much as I can. I have no direct proof that other box stores treat their employees better or use local suppliers or make business connections with local businesses, but it’s demonstrated that Wal-Mart does none of these. I’m assured that Wal-Mart will always favor low costs over anything else. Aside from business tax, real estate taxes, and utilities, Wal-Mart probably won’t draw any other BTB from anyone in Louisa, or Albemarle, or Richmond. If they could pipe in their own water at low cost, they probably would. As it is, most of their suppliers are overseas these days, and they drop even popular, high-quality, American manufacturers when their prices are too high (like Rubbermaid, which you can buy everywhere BUT Wal-Mart).

    So where are the profits going? Not to local business partners or workers.. If Louisa councilors can swing a development deal surrounding the new Wal-Mart for other retailers to open Subway franchises and such to take advantage of the Wal-Mart crowd and recoup local biz, then perhaps they can make it work for the area.

  21. Wal-Mart won’t kill the competition in Louisa or replace good jobs in Louisa with bad jobs because there isn’t any competition and aren’t any good jobs to speak of in Louisa.

    The effect it will have will be to let area residents who currently have to drive to Richmond or the north end of C-ville (which, as a Louisa Co. resident, I can tell you is NOT convenient to get to from out that way, you have to drive through town, and how stupid is that?) to shop at Wal-Mart will now be able to shop locally, and some minimum wage workers who had to somehow get to those areas will now be able to work closer to home. I’d think Waldo and the like-minded would be happy about the resulting reduction in traffic.

    I generally don’t shop at Wal-Mart but then I don’t shop at any Mom-and-Pop stores in Louisa either. I’d prefer to see a Target or Home Depot go in to save me some of that driving, but hey, it’s an imperfect world.

    I expect the effect on the Downtown Mall will be negligible either way.

  22. I don’t really understand Wal-Mart’s motivation. Zion’s Crossroads would be a much better fit than Louisa. The proposed site is good for the people in Louisa (small stagnant population), but most of the county never goes to Louisa anyway so it really won’t have that big of an impact. But this county is run by the good old boys from Louisa proper, so I imagine this is Wal-Mart’s way of greasing the eventual Super-Wal-Mart at Zion’s.

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