05. Impact of an Anticipated Walmart on the Northern NeckA." TKAWUKVIA-"A
Dr. Thomas Muller, Ph.D.
Fairfax, VA
January 1999
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BACKGROUND............................................................................... I
AREA SIZE, CHARACTERISTICS AND TRENDS ........................I
PROPOSED NEW SHOPPING CENTER ........................................3
WAL-MART MARKET SHARE ....................................................... 8
BENEFITS OF WAL-MART ............................................................ 10
uslao-jamme-unr 'J[juq hi
OTHERISSUES ................................................................................. 14
APPENDIXI ...................................................................................... 16
Residents of Kilmarnock, Lancaster County and The Northern Neck have expressed a
concern that a contemplated shopping center that would include a large Wal-Mart and possibly
other businesses would potentially result in adverse effects on the community. The objective of this
analysis is to examine likely economic and fiscal effects were Wal-Mart to locate in Kilmarnock.
Both costs and benefits are considered to provide elected officials and residents with factual data
where such information is available. Data sources include numerous Federal State and business
publications. In this report, information not based on quantifiable data is identified as such.
This study examines the likely impact of a proposed shopping center on the Town of
Kilmarnock and nearby areas. In such an analysis, the first task is to determine the number and
characteristics of shoppers at the proposed new business. As discussed later, the primary market
area of Kilmarnock for most goods (and services) is Lancaster County. The secondary market area
for the anticipated shopping center is part of Northumberland County.
Market Area Variation
The specific market area for retail sales varies with the product sold. Convenience goods, for
example (which are typically sold at a 7-11), tend to be purchased in close proximity to one's home
or place of work. Shopper goods, or items people shop for (which comprises most of Wal-Mart or
typical department store non-food sales), have a spatially larger market as would many of the
products sold by Lowe's.
Demographic Characteristics
The most notable demographic characteristic of The Northern Neck, including Kilmarnock,
market area is its age distribution. As seen in Table 1, the twe,counties that form the primary and
secondary market have the highest percentage of persons above the age 65 of any city or county in
the entire Commonwealth of Virginia. It is one of the few places nationally where the number of
deaths exceeds births. This means a very high retirement population - persons who elect to come
to the area because of its high quality of life and rural setting. One out of three persons in the area
is a Social Security recipient- again the highest percentage in Virginia. The critical nature of this
demographic characteristic is discussed in more detail later in the report.
Income Characteristics
Per capita income In Lancaster County is somewhat above the Virginia average, with
11 /09/08
Characteristics-
Lancaster C.
Northumburiand
Virginia Lancaster as
Demographic
County
Share of VA
Population (1996)
11418
12908
6,700,000
-
Under 5 Yrs
5%
6%
7%
0.67
65 and Over
26.8%
25.8%
11.2%
2.39
Birth Rate
9.1
9.2
14.8
0.61
Death Rate
17.1
15.1
7.9
2.16
Net Migration
1161
1155
1990-1997
1161
1155
Household Size
2.34
2.34
2.75
0.85
Economic.
Social Security
Recip. per 1000
328
306
143
2.29
Retail Employment
1030
901
Average Payroll
$17,894
$29,421
Retail Sales (1992)
$90.5
$33.3
60822
Ret Sales Per Capit,
7,926
2,580
9,078
0.87
Per Capita Income
$27,420
$21,498
$24,010
1.14
Bank Deposits 1992
216855
133245
79799
Per Capita
18,992
10,323
11,910
1.59
Tax.Sales 1996 Mil$
82
38
53,923
0.15%
Per Capita 1996
7,450
2,918
8,048
0.93
FA
household income close to the State average. Northumberland per capita income is, however,
considerably below average. On the other hand, wealth (as measured by bank deposits) is 60
percent above the Commonwealth average in Lancaster County. The source of income is also
unique among political subdivisions in Virginia, as a large share of income is from investments.
Specifically, over two thirds of all income in Lancaster County is derived from dividends, interest
and retirement pay. Earnings (mostly from wages and salaries) account for only 30 percent of all
income. In no other Virginia County or city is there a parallel to this income distribution. In most
of Virginia, the major income sources are earnings from wages and salaries (see Table 2). The
critical nature of this demographic characteristic and the mobility it implies for the populace is
discussed in more detail later in the report
Employment Characteristics
As shown in Table 3, employment at place of work in Lancaster County totals about 4,000.
This is a below average rate given the population level. However, seasonal unemployment spikes
but year round unemployment is low. Therefore, the rate is due to the population distribution. Most
jobs are in services (40 percent), followed by retail employment (22 percent).
Retail Sales Trends
Retail sales, as reported by the Virginia Department of Taxation, have risen very slowly in
Lancaster County since 1994, below the growth in the State of Virginia. The 1992 Census of Retail
Trade (Bureau of the Census) estimated all retail sales in that year at about $85 million. Sales
subject to local sales taxes were $79 million in 1992, rising to $85.1 million in 1996. The cause for
the modest gains is the most likely the slow population growth.
Kilmarnock, as noted earlier, is anticipating a proposal for a new shopping center, .with
approximately 109,000 square feet Wal-Mart Supercenter as the anchor. (Wal-Mart could also be
a freestanding unit without other stores). There is a possibility -that a Lowe s could also locate in the
proposed center. However, a review of their location strategy suggests that this market is too small
for a 100,000-sq. ft. or more stores they are now opening. Other locations (such as where the
nearest Wal-Mart stores to Kilmarnock are located) would appear to be a more appealing site for
such a large building materials store.
What, if any, other retail or service stores would locate in the shopping center is not known.
Fast-food outlets typically locate near Wal-Marts, although most new Wal-Marts have such fast-food
operations within the store.
Wal-Mart Characteristics
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Table 3
Sector No- Jobs Average No. Establish.
Weekty .-
Agriculture
94
$293
18
Construction
216
387
52
Manufacturing
222
385
25
Trade- Wholesale
114
481
19
Retail
877
258
93
FIRE
290
694
41
Services
1568
385
166
Local Govt
401
391
6
State- Fed
87
579
14
Transportation
138
597
19
Total
4007
$392
453
Source: State of Virginia
5
When assessing the economic viability of any retail business, the source of clientele is a
primary issue. In the case of Wal-Mart, the issue is not complicated. Each Val -Mart carries the same
basic categories of merchandise. The Supercenter Wal-Marts also carry grocery items and some very
large Wal-Marts include additional specialized departments, as observed in Tappahannock) but
there is a common element to all stores. As a result of this consistency in product (but not
consistency in price r V la err; 542I g poliq ), distance to the nearest Wal-Mart is a good guide
.to its market area There are two Wal-Marts about 45 minutes driving distance from Kilmarnock.
one in Gloucester and another in Tappahannock. As noted later, the latter is a very large (recently
expanded) Wal-Mart, with what appears to be over 140,000 sq. ft of space. Because of its size and
other shopping opportunities in the market area, which includes Warsaw, the Tappahannock Wal-
Mart will probably continue to draw from much of Northumberland County. As such the market
area for a Wal-Mart in Kilmarnock.is expected to be all of Lancaster County and, as a secondary
market, the eastern part of Northumberland County. The communities of Heathsville, Burgess,
Reedville would be included as the secondary market, while areas west of Heathsville would be part
of the Warsaw/Tappahannock market. Middlesex County residents are drawn to Gloucester. Some
Kilmarnock area residents even with a local Wal-Mart may also shop at the other Wal-Mart stores -
and conversely, a Middlesex resident could shop in Kilmarnock. Generally, however, the market
areas appear stable based on current shopping patterns.
Kilmarnock does offer `higher market end" shopping opportunities that can attract more
affluent shoppers from a larger market area. However, these consumers are typically not Wal-Mart
shoppers because the store does not carry these higher quality products.
Population of Wal Mart Market and its Implications
The population of Lancaster County (as of 1996) was 11,418. This represents less than a
one- percent annual growth since 1990 and there are no obvious reasons to assume a radical
change in the growth rates. If we include one half of Northumberland County, the total Wal-Mart
market area has about 18,000 persons. This appears to be substantially less than the market for (�
any Wal-Mart in Virginia or in other states the writer of this report studied. There are currently 59
Wal-Mart stores (excluding Sam's Club) in Virginia outside Fairfax and Arlington counties (these
two counties combined have about one million residents but only two Wal-Marts). With a net state
population of 5.7 million, there is one Wal-ilvlart per 96,000 persons. Excluding the largest
metropolitan areas in the State, the Virginia average Wal-Mart market has about 60,000 residents.
Even in Arkansas (the state with the highest number of Wal-Mart stores per capita) there are 83
stores, or one Wal-Mart per 32,000 persons (although the average store size in the State is below
the national average). Given these facts, why is Wal-Mart interested in this market with fewer
residents than in Arkansas, the home of the chain?
Wal-Mart (as distinct from other businesses) apparently does not produce market studies
as part of its location decisions unless required or asked to do so by 1 officials. Were such a
study to be un ert en by W -t art, it would help local elected officials to determine the impact
of the store in Lancaster County. In the absence of such a study, we can only speculate on their
motivation. However, Wal-Marys interest is likely due to two factors: there is no sizable general
0
merchandise store in the market, and al -Mart has exhausted the most obvious sites. Because of
this, Wal-Mart now has a policy to `backfill' gaps on a map where there are no Wal-Marts. An
examination of Wal-Mart locations indicates t Lancaster County is such i gap. The company,
as shown by the location of its newest stores such as in Woodstock, Va., is now closing gaps to
assure that no one is more (except in very low density areas, such as Montana) than 30 minutes
from one of its stores
The blanket coverage policy that is being carried out nationally is intended to maximize the
Wal-Mart market and block competitors from entry into smaller markets. The policy seems to work,
as per store sales continue to rise.
Sales in Market Compared to National Averages
The typical 109,000-sq. ft. Wal-Mart in 1997 had average sales of about $330 per sq. ft. or
$36 million. By comparison, total taxable and prescription drug sales in the Lancaster County
market area during 1998 are estimated at about $95 million (some products, specifically motor
vehicles and certain fuels, are not subject to sales taxes). Adding secondary market sales in parts
of Northumberland County, total market sales total about $110 million.
Taxable sales include restaurants, building materials and all other goods subject to the state
sales tax. On this basis, Wal-Mart sales would equal about a third of all taxable sales in the market
as defined. There are about 7,500 households in the total market area. This means that, .on
average, every household would have to spend about $4,500 at the Wal-Mart each year. Nationally,
Wal-Mart domestic sales are about $110 billion (including Sam's Club), or about $1,100_per
household. Thus, local Wal-Mart sales would have to be 4.1 times the national average.' However,
the national average includes large cities with few stores. Therefore, a more reasonable local sales
multiple would be 3-3.5 times the national average.
Comparison to Other Wal-Mart Stores in Virginia
The newest Virginia Wal-Mart store is to open in Woodstock during 1999. This is one of the
smaller Wal-Mart markets in the State. However, the market area nonetheless has about 35,000
persons, twice the size of the local market. A smaller Wal-Mart in South Boston (opened in the
1980's) has a similar sized market of about 32,000 persons.
Is A Local Wal-Mart Viable?
Given the small market size, would Wal-Mart be a viable enterprise? At first, the response
would appear to be no. But as will be shown, it could be viable and potentially profitable given a
-set of assumptions. It is important to note that between 1992 and 1997 Wal-Mart expanded the
number of stores from 1,932 to 2,667. The number of stores closed during this period was 38 or
1.4 percent of the total. Thus 98.6 percent remained viable (Wal-Mart K-10 SEC filings). The
typical Wal-Mart store generates pre-tax profits of close to $2 million. By contrast other chains, such
as K-mart, closed hundreds of stores in recent years with profits at best only a fraction of Wal-Mart.
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This financial and closure record means that a Wal-Mart, once opened, is very likely to stay. Given
that the Wal-Mart pricing policy can eliminate any competition, this is understandable. The worst
situation would be for Wal-Mart to enter the market an eave r competrtive stores are no longer
present. This would leave local residents with practically no shopping options and must be
considered.
The common method of comparing retail stores to each other L "market share'. Typically,
a proposed store estimates what share of current and future market area sales it would need to be
economically viable. Given only slow sales growth in the area market, sales would have to be mostly
from those generated by the current population base.
Wal-Mart Food Products
There are three supermarkets in Kilmarnock: Food Lion (Lancaster Square Shopping Center), Vur
Dixie (Chesapeake Common Shopping Center) and Tri-Star Grocery. In addition, there is a Food
Lion in Heathsville. The combined square footage of these stores is estimated at about 90-95
thousand square feet. In addition there are numerous other small providers of food products,
perhaps adding another 17,000 square feet for a total of 107,000-112,000 sq. ft of space. Wal-Mart
would add another 37,000-40,000-sq. ft. in an already crowded market given estimated sales per
square foot. Currently the local food sales level indicates that there is some food shopping from
residents outside Lancaster County. It could also be that local residents are purchasing more non-
food items (such as school supplies, sundries) at these stores than in more urban markets. Current
food sales in the market area are about $ 38 million. (based on sales somewhat below national
average per sq. ft. or $340 compared to the $354 average). Wal-Mart food sales would be about
$13.5 million (39,000-sq. ft. times $345). Given that about $13 million would come from existing
stores in the market, the Wal-Mart share, would be 35 percent of the market.' Given the
demonstrated ability of Wal-Mart to maintain high sales, its presence would likely lead to the
closure of at least one, but more likely two of the weakest Kilmarnock supermarkets. Were this to
happen, local shoppers would have less choice than at preseant.
Non -Food Products
In addition to grocery products, Wal-Mart will sell other, more 'traditional' products. Based
on the typical Wal-Mart store profile, the most vulnerable non-food stores are in the following
categories:
Low -medium priced apparel and shoes
Wal-Mart sales of food products in SuperCenters are estimated in a recent article (Supersi :ing the Supermarkets
New York Times November 13 1998) to be 50 percent of all sales. The article discusses the difficulty regional
supermarkets have to stay in business in smaller cities when Wal-Mart enters the market
Record/Video
Pharmacies/ over the counter drug and cosmetic products
Electronics/small appliances
Sports goods
Low -end jewelry/watches
Cards -low -end gift products
Photographic
Garden Supply
Auto parts -general
Hardware products -general
Housewares
Wal-Mart Capture Rate
Market residents currently shop elsewhere for certain products. This shopping can be
divided into three categories:
* Products and specific brand names unavailable locally because market is too small
(this is typical in allsmaller markets.) Some of this shopping is by mail order or special order. Wal-
vlart will typically not carry these specialized goods for the same reason local merchants do not sell
these products - market demand is inadequate.
* Products available locally, but may, in some cases, be purchased at a lower price in
large markets. For low -end brand name merchandise, Wal-Mart can 'capture' this leakage,
*Big ticket' items when buyers seek to look at numerous alternatives and only a few choices
are available locally. Wal-Mart would rarely have there items.
Total primary market leakage is estimated in the $30 million range with several million
additional leakage from the secondary market, or a total of $34 million. However, Wal-Mart sales
from recapture would represent only a minority of their anticipated total sales-. Grocery sales are
projected to be $13 million with virtually no recapture sales. Most recapture would be in non -
grocery items. Based on observations in other markets, which did not have groceries (groceries
generate additional traffic/sales in non --grocery items), at best 25 percent to 30 percent of sales now
taking place outside the market could be recaptured, with 25 percent a more realistic upper
estimate. Many Local residents, given their disposable income levels and age demographics,
seek quality goods and choices not available at Wal-Mart. Others, regardless of income, seek a more
competitive market area such as Newport News for expensive items including certain electronics
(for example, Circuit City has many more TV brands and sizes and other product choices
compared to Wal-vlart). Although Wal-Mart carries many goods, it by no means exhausts all
consumer products. A 25 percent recapture rate would be $8.5 million. This means that $36
million less $8.5 million. or 527.5 million would (-k)me from locql retail businesses. Of this total. 813
million would be grocery sales, with $14.5 million other mercliandise.2 A share of these potential
11 Every market has leakage. Even residents of Fairfax County shop by mail or in other
Q
recapture sales probably now take place at the two nearest existing Wal-Mart stores. If Wal-Mart
captures these and other sales now leaving the area, this would leave $14.5m. to be captured from
local merchants. However, this recapture level would be concentrated in certain shoppers goods,
not across the board. Drug store items and hardware store goods, for example, would be essentially
unaffected by recapture, as most persons already purchase these items locally. Most of recaptured
sales would be such products as lower -end electronics, appliances, and low -end apparel.
Probable Impact of Wal-Mart on Existing Businesses
The distribution of sales by category as reported by Wal-Mart is shown in Table 4. The data
ul this table show how Wal-Mart sales of $23 million in non -grocery items would be distributed
based on their national sales pattern. Wal-Mart is estimated to capture at least $13-$15 in. from
non -grocery local sales (the balance is recapture). Local 'competitive' sales are shown to total $25
in. Therefore, Wal-Mart would have to capture between 51 percent and 57 percent of local business
enterprise sales in categories shown to have 'average sales (recent data show that Wal-Mart stores
in Virginia have above average sales). This would mean that local merchants would lose a majority
of sales to Wal-Mart. The actual percentages vary from 18 to 60 assuming a 30 percent recapture
rate, higher assuming a 25 percent recapture rate-
1 1010011 " IC 1 .. j . 111-41
Although Wal-Mart is likely to have various direct adverse effects on local businesses and
shopping areas, there are some benefits. The major plus is that local residents now driving to other
Wal-Marts to shop will save on time and gas.' Also, Wal-Mart may carry some products not in the
market at present. However, a review of local stores indicates that most product Wal-Mart carries -
but not necessarily the same brands- are available. Finally, consumers could find lower prices on
some items. However. in the absence of competition, according to studies and Wal-Mart ricin
policies, prices are higher in smalltowns an in cornpetltive suburban markets. `''
As this report shows, these benefits are outweighed by costs to the community. A smaller
(about 30,000-sq. ft.) general merchan�c ise store addition to the community would benefit some
households currently shopping elsewhere for products without the magnitude of negative impact
Wal-Mart would create.
markets for specialized goods or because prices are lower elsewhere.
® Wal-Mart knows exactly how much Lancaster County residents spend at nearby Wal-
Mart. Therefore; local elected officials should be able to obtain this information if Wal-Mart
were to file an application.
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Real Commercial Property Values
In addition to a shiftin sales, Wal-Mart would have a specific impact on the downtown
area of Kilmarnock and the two shopping centers outside downtown. As a result of a shift in sales,
some existing businesses would experience severe problems (if the shopping center had other
stores, the shift would be even greater). This, in turn, would reduce commercial property values
in the downtown area and, perhaps most dramatically, at the two shopping centers. This pattern
can be o sery m Warsaw and Tappahannock with the closure of supermarkets, drug stores and
other stores after Wal-Mart arrived and later expanded to become a SuperCenter. The expanded
Wal-Mart, in addition to a supermarket, has a donut factory, bank, hair salon, video sub -store,
vision center, pharmacy, pet sub -store and sells guns, bikes, flowers, and plants in addition to
"traditional" merchandise. Although this is a larger market area compared to Lancaster County, the
impact on other shopping areas is evident. In Warsaw (in Richmond County, about seven miles
from Tappahannock) and Tappahannock, several pre -Wal-Mart shopping centers are mostly
vacant. In the Warsaw Valley center a large supermarket (A to Z Foods) and a very large drug store
(Warsaw Drugs) are out of business. The Warsaw Supermarket just closed, but the store signs
remain as of November 1998. The Essex Square shopping center seems deserted, with numerous
stores closed. None of this should be surprising, as sales at the Wal-Mart are probably well in excess
of $40 million. Total Essex County sales in 1996 were not much above those in Lancaster County.
Even with the addition of Richmond County, the market could not absorb an enlarged Wal-Mart.
The result- closed stores that are an eyesore and reduced value as commercial property. The
significance of this shift in retail activi is obvious - Wal-Mart pays property taxes, but the gain, in
the sence of rapid market expansion, is offset -and could „b more than o set - y re uctrons in_
other locations. that Wal-Mart es per square foot exceed other stores, but initial property
assessmen °e typically based on construction costs plus land value, not sales. In later years,
property values are based on the market value of property. These values, in turn, are based on such
factors as rent per square foot and values of similar property. These rents are based on demand,
and with empty stores assessed values decline - which feeds back into assessments.
Retail space previously a supermarket but now empty has little market value. If a secondary
use such as storage is found for the space, its value also declines compared to the use the space was
built for. This is evidenced by the vacant strip across Route 17 from the Tappahannock Wal-Mart.
This property was assessed at $3.6 million in 1990, but adjusted downward to $2.5 million in
12
1997. It is now for sale for $1.5 million (a pending lawsuit against the County asserts the value is
now less than $1 million). The $1.5 million asking price represents a $2.1 million or a 58 percent
decline in value in one vulnerable location.
A study of real property values in several small Iowa cores (about 6000 to 12,000
population) and their counties (about 18,000 to 25,000 population, including the cities) in the mid-
1990's illustrates this same pattern. An examination of property values based on sales before and
after Wal-Mart opened shows the adverse effect on values of down -town property following the
opening of Wal-Mart.' The primary cause for stagnating commercial property values was the
decline in the number of retail stores and the decline in sales in stores other than Wal-Mart within
and outside the cities (in small towns) within a few years following the opening of Wal-Mart.
The assessed value of the (potential) Kilmarnock Wal-Mart store (other than land that
already pays taxes) should be about $3.5 million. The assessed value of commercial retail property
in businesses likely to compete with Wal-Mart within Kilmarnock is about $8-10 million. Were these
property values'to decline by 45 percent over time compared to what they would be in the absence
of Wal-Mart, the decline would exceed the property gain from Wal-Mart. Reductions in sales from
current estimated levels among existing businesses (grocery and other competitive goods) are about
45 percent. Given that property values decline in proportion to reductions in retail sales, the
reductions in property values would be $3.6 - 4.5 million. The precise net property value impact
(which would take place over several years) would depend on such factors as the County assessor
and the future business climate. The estimated assessed value of Wal-Mart was based on Iowa
data, but construction costs should not be lower than in rural Virginia. These data show that offsets
from existing property can eliminate gains in property values from new construction if there is no
market for existing structures.
Often, local officials consider only property values based on new construction, and d:-ade
not
consider the effects of new commercial space on already present property values. In retail
when there are small increments of new space based on a rise in demand, this is reasonable.
However, the addition of a superstore such asWal-Mart requires that the adverse effects on existing
property values be considered carefully. Based on the Iowa data and observations in Essex and
Richmond counties, this should be a significant issue locally.
Employment Effects
Although Wal-Mart would employ a substantial number of mostly 20-34 hrs per week
employees, this gain would be offset by reduced employment in existing businesses. An Iowa study
indicates that there were few, if any long-term job gains from War ivlart. There were gains for a one-
year period after opening, but after other competitive stores reduced their jobs, little net gain after
the fir_:t year. Other studies in New York indicate significant net job losses as a real possibility. This
should not be surprising because Wal-Mart sales per employee are substantially higher than for the
typical store. Therefore, fewer employees are required to sell the same quantity of merchandise.
i
o kPiat Happened fThen fi al -Mart Came To Town? Thomas Muller and Beth
Humstone, The National Trust for Historic Preservation May 1996
13
Sales per retail trade employee in Virginia are estimated at about $111,000. However, Wal-Mart
sales are about $146,000 per employee. This means that if local stores employ 133 persons to sell
$14.8 million in merchandise, Wal-Mart would need only 100 to sell the same amount. The sales
at Wal-Mart are estimated at $36 million. This would mean 246 mostly part-time (less than 36 hr.
per week) jobs. At the same time, local market merchants would loose $27.5 million in sales. Given
$111,000 in sales per employee, this can mean a loss of 248 jobs. Thus the gains from Wal-Mart
are wiped out by losses from existing merchants.
UnliirP �n�����-+��nnr�, new retail creates no jobs at the regional level throbs If sales
recapture rates are lower than shown; the potential job loss would be greater. If recapture rates
were as high as 30 percent, there would be again of about a dozen jobs. This job impact analysis
calculation explains why in Iowa, retail employment in towns with Wal-Mart showed no net gains
compared to statewide trends. We would expect a similar pattern locally. There would be an initial
rise in total retail employment, followed by a decline. The Iowa study shows that retail activity in
small towns close to but outside the jurisdiction where al -Mart is located tends to fall
substantially. Thus, some job losses take place in these communities.
Lowe's
As stated earlier it is unlikely, but by no means impossible, that a Lowe's would locate here.
Were this to happen, the Lowe's market area would be larger than Wal-Mart for some of their
products currently unavailable in Lancaster County. Because the nearest stores are in
Fredricksburg and Newport News, some persons could be willing to drive an hour or more for
certain "large ticket' items.
Were the store to open, the $8 million current Lancaster County sales in building material as well
as sales of major appliances would be extremely vulnerable. However, total market sales would
account for only a small share of sales needed to keep a large Lowe's profitable. There would be
an overlap in merchandise with Wal-Mart of perhaps 10 to 20 percent. The combination of Wal-
Mart and Lowe's would totally alter the location of most retail business in the County. Combined
sales of the two giant stores would be in the $70 million category, or close to all retail sales in the
County.
Aspects of Wal-Mart and Lowe's Presence Undue to the Lancaster County Area
Although every market is somewhat different, The Northern Neck has several unique
characteristics. First, demographics- about a third of the population is retired- could impact the
volume of Wal-Mart sales significantly. This population spends more on travel and health than
14
younger groups. Second, parts of the population are more affluent than the average in the State
and nation. Because this population lives in the area by choice, the quality of life in general and the
preference to live in a semi -rural environment in particular are more important to community well
being and growth than in a typical American community. Usually, we live in a community because
jobs are there or because we grew up in the area and therefore find employment locally. In this
instance, many households have relocated to The Northern Neck area simply because it is a nice
place to live. Therefore, disruption in the pattern of traditional local trade, additional traffic, crime
and other problems associated with huge commercial centers would have a more adverse impact
on the image of the community than, for example, would be the situation in a typical suburban
community. The Wal-Mart off Route 66 in a commercial area of Fairfax County (one of only two
in the largest Virginia county because, given the competition, Wal-Mart would have to charge lower
prices than in smaller Virginia markets -hence less profit) is located near four other superstores.
Therefore, it has little impact on the local quality of life. But Fairfax is very different from the
Northern Neck. Lancaster County has The Tides Inn, a highly rated resort that is favored because
of its attractive rural, peaceful location as well as several large high quality retirement communities
whose residents are attracted to the area by the location. These enterprises, it should be noted form
the backbone of local service employment and could be left very vulnerable if `quality of life' were
degraded.
It is almost impossible to quantify without extensive surveys this quality of life impact, but
it is nonetheless present and anecdotal evidence indicates it is a significant factor. Combined with
other, more quantifiable effects discussed in this report, it should be given considerable weight in
evaluating the impact of the proposed center on local communities.
Secondary Effects
The type of changes in retail activity induced by Wal-Mart could have secondary effects on
businesses and activities other than retail trade now located in the small downtown area. This
pattern has been observed in other small cities as activity shifts to a new commercial center. Over
time, the Wal-Mart commercial area would expand, with additional commercial activity moving
from existing areas to the new location.
Secondary effects beyond the scope of this paper include crime, traffic congestion, fire
protection, environmental degradation and other issues that should not be ignored.
15
lent k r t t.
te*One
Bay Flooring
White Stone Pharmacy
Lamberth Building Materials
Garden Center
m�
Garden Center
Auto Repair Store
Specialty Shops
r: r1
Main Street
Planing Mill
Jewelry Stores (upper end)
Hospitality Carpet Store
Mens and Womens stores (xnid.to upper end)
Main Street Gift Company Store (small)
Kids clothing store
Furniture/ furnishing
TV, appliances
Gifts (small)
Jewelry (lower end)
Kilmarnock Pharmacy/drug store
Home furnishing/ appliances
Women apparel (upper end) (2)
Apparel (lower end)
16
Appliances
Furniture/fu .(lower end)
Auto parts (large)
Auto store (smaller)
Eubanks Hardware
Shoe store (low middle)
Restaurants
Other Lancmter
Lancaster Square Shopping Center
B&D Video
Cards and Gifts
Record Shop
Radio Shack
JT Harris (moderate clothing)
CVS Pharmacy
Dollar Store
Food Lion
Chesapeake Common Shopping -Center
Sears appliances, electronics
Capri Jewelers (lower end)
Gift Store
Cato Jr. (lower end clothing)
Dollar General
One our Photo
Winn Dixie w/ Pharmacy
Other Kilmarnock
Urbanna Lumber
Electrical and plumbing
Hardware store (small)
Drug store (small)
Market (small)
17
Hardware Store
Garden Supply
Family Dollar
Food Lion
Building Supplies
Video (small)
Market (small)
.Va (Northumberland
i
Market (small)
IN