Like it or not, Walmart's in growing mode here
| Monday, Apr 25 2011 02:00 PM
Last Updated Monday, Apr 25 2011 02:00 PM
Few companies can match Walmart Stores Inc. in its ability to generate controversy.
The world's largest retailer is simultaneously championed and skewered for eco-friendly packaging and polluting; for creating jobs and killing them; for serving the poor and underpaying them.
Whatever you think the retail giant is up to, expect it to do a lot more of it in Kern County.
The Bentonville, Ark., company is on a building spree here. It opened two Walmart supercenters in Bakersfield in 2009 and 2010 -- bringing the total in the city to four -- and is scheduled to complete expansion of its east Bakersfield location this summer.
A Delano store is set to open next year. A Ridgecrest supercenter is under construction across the street from a smaller, existing Walmart that will close. Proposed new stores in Tehachapi and Wasco are in different stages of the approval process.
"We've heard from Kern County residents that they want more options for affordable and healthy food and convenient shopping," said Amelia Neufeld, the company's senior manager of public affairs and government relations. "Walmart is uniquely positioned to deliver both."
It's no surprise that Walmart sees an opportunity here.
Kern has 126 retail stores for every 10,000 people in the county, according to the California Retail Survey produced by Pollock Pines, Calif., market research firm The Eureka Group.
By comparison, the ratio is 163 stores per 10,000 people in all California counties.
And that's just today.
"Where California is going to grow is going to be the Central Valley. That's a fact," said Kevin Palla, commercial manager for Watson Realty in Bakersfield. "We've got the affordable land and we've got the water. As the land here transitions away from agriculture, those water rights remain. Walmart is positioning itself for the future."
The valley also has the demographics to support shopping at Walmart, Palla said.
Opponents howled in protest when a Target went into Bakersfield's Shops at Riverwalk development instead of something more upscale, but "the reality is considering what happened to the economy, they'd better be glad a Target opened there instead of a Nordstrom's.
"The Targets and Walmarts of the world serve the masses, and their price points match up with the income of the people who were there then, are here now, and will be here in the future."
Indeed, in even the most contested locations, there are fans who welcome the lower prices Walmart is known for and the hiring that comes with a new store opening. Some have presented petitions of support at Planning Commission and City Council hearings.
Walmart says the Tehachapi and Wasco supercenters should create about 300 jobs each, with an average hourly wage of $12.28.
The east Bakersfield and Ridgecrest expansions should add another 85 jobs per store.
Moreover, the tax revenue the stores create will help support the communities where they operate, Walmart said.
Last year Walmart collected $954.2 million in sales taxes for California, and paid more than $141.1 million in state and local taxes, the company said.
The Kern County Economic Development Corp. says communities benefit when Walmart enters an underserved area because it plugs "retail leakage," or consumers driving out of town to shop and paying taxes to other communities.
"There's a lot of that in some of our outlying areas," said President and CEO Richard Chapman. "In some communities it's as high as 50 percent."
UC Berkeley takes issue with the assertion that Walmarts help the tax base. It has studied the retailer's impact on local communities for years, and says most Walmart associates earn below poverty wages. That makes them eligible for food stamps, free school lunches, Medi-Cal and other public safety net services, which ultimately hurts, not helps, the tax base.
"And that's not just at Walmart," said Ken Jacobs, chair of Berkeley Center for Labor Research and Education. "When a Walmart comes in, other stores cut their wages and benefits in order to compete with Walmart's prices, so it brings everyone down."
Critics also worry that Walmart will drive smaller retailers out of business.
Kmart and one or both of Tehachapi's two supermarkets would be threatened, said Shannon Turner of Tehachapi First, a group formed to fight the store's expansion efforts there.
"That's not even considering the small -- I refuse to call them mom and pops -- they're family businesses. This is a small community, and those businesses are run by families," Turner said.
Charles Fishman, author of "The Wal-Mart Effect," said the concerns are valid. Generally, five years after a new Walmart opens, overall employment is down about 50 jobs because the retail giant kills off competing businesses, he said.
Walmart denies that.
"It's a common misperception that we hear a lot," Neufeld said. "But the vast majority of our stores co-exist with dozens of small, medium and large businesses."
Far from driving other retailers to extinction, Walmarts strengthen nearby businesses by driving foot traffic their way, she said.
Delano City Councilman Sam Ramirez is resigned to a new Walmart in his city making it harder for existing businesses to compete, but says it's not a death sentence.
When Home Depot entered the market for the first time, residents feared for two local hardware stores.
"Seven years later, both stores are still up and running," Ramirez said.
Competition is good for consumers because it forces stores to improve prices and quality, he added.
"It's a legitimate concern some stores will see a decrease in sales or employees who defect to go work over there, but in a city of 52,000, we don't have many shopping opportunities. We need more, not less."
Turner of Tehachapi First said Cathedral City had just the opposite experience. Its local stores closed, and then Walmart took off, too, leaving behind a vacant eyesore.
"There aren't enough people to support all these stores. They're overbuilding," she said. "When Walmart decides to leave, what are we going to have? A bunch of vacant, blighted buildings. It's going to be urban decay."
Tehachapi community development director David James pointed out that the city didn't recruit Walmart. Walmart came to Tehachapi after analyzing the community and concluding it could fill a void.
"As long as retailers see a need, they're going to come here," he said. "The first thing they teach you in science is that nature abhors a vacuum."
