Du Quoin, IL. Nearing Wal-Mart Saturation

Is Wal-Mart Competing With Itself in So. Illinois? [Du Quoin Evening Call (Ill.)]

fear that customers from Elkville, Vergennes and Ava that routinely travel the aisles of the Du Quoin store will head for Murphysboro. Why? The new store on Rt. 13 east of Murphysboro has a food liner. The old Murphysboro store didn’t.

It’s the same fear that set in when the new Wal-Mart Super Center in West City opened, pulling business from the Mulkeytown and Christopher areas out of the Du Quoin store.

The Du Quoin store has seen some attrition in its employment, which peaked at 200 shortly after it opened in 1999.

It is also the profit center for the City of Du Quoin’s sales tax revenue. The most recent treasurer’s report shows the city had sales tax income of $1,190,676 as of the end of September. That is down $14,288 from the same nine-month period a year ago.

Roderick Scott, a media spokesman in Wal-Mart’s Bentonville, Ark. office said Wal-Mart doesn’t compete against itself and the Southern Illinois stores are reasonably spaced.

He said the new Murphysboro store was built “to provide better service to our customers.”

Scott said the original Murphysboro store was built in the early 1980s and was actually a sister store to the Du Quoin store. He said it is much smaller and showing its age and that it was simply time to build a larger store with more services for customers between Murphysboro and Carbondale.

Scott said that stores 17 to 20 miles apart in an area are common and do not tend to pull business from neighboring stores.

But, Wal-Mart employees say that not only did the new West City store pull business out of Du Quoin, but that the impact of the new Murphysboro store is already being talked about. Employees say their supervisors are bracing them for at least a short term “rollback.”

Everyone is worried about job security.

Scott said that in a store like Du Quoin with upwards of 150 employees “we are normally short a dozen or a couple of dozen employees.”

“Wal-Mart is proud of the fact that three out of four of our employees are fulltime,” Scott said.

One employee told the newspaper that Wal-Mart’s customer mindset works both ways. “We get a lot of Carbondale customers because they don’t want to deal with the larger stores. They like Du Quoin because it’s easier to get around in the store, ” one clerk commented.

Scott said the new generation of super centers was designed for people who want to both shop and just browse.

A recent Wall Street Journal article says Wal-Mart is having to rethink its marketing strategy to compete with Target and others. Shoppers aren’t looking for just the lowest price anymore. But, Scott says Wal-Mart competes very well against Target, which has a store in Marion.

The Du Quoin store is scheduled for a makeover in 2008 and will include eliminating some areas that are not well traveled, while adding new areas and services that customers are asking for.

Wal-Mart is an important part of our economy and important to the people who work there.

Company-wide, sales for the second quarter of fiscal year 2008 were $91.99 billion, an increase of 8.8 percent over the second quarter of fiscal year 2007. Income from continuing operations for the quarter was $3.11 billion, an increase of 4.1 percent from $2.98 billion in the second quarter of fiscal year 2007.

“Although some people will report that Wal-Mart has had record sales and earnings, our underlying operating performance this quarter is not what we expect of ourselves, and not what our shareholders expect of us,” said Lee Scott, Wal-Mart Stores, Inc. president and chief executive officer. “For the remainder of this year, our management team is focused on inventory improvements, delivering quality products at low prices, and store execution at the highest standards.”

Scott pointed out that consumers continue to be under pressure economically.

“Many customers around the world continue to be under economic pressure and they expect Wal-Mart to be their advocate,” Scott continued.

The Company expects to add 48 to 49 million square feet globally, which is an increase of 6 percent in fiscal year 2008 over fiscal year 2007. During each of the following two fiscal years, Wal-Mart expects to increase square footage between 48 million and 52 million square feet, an increase of 5 to 6 percent.

Wal-Mart is executing the plan announced June 1, 2007 to moderate its U.S. supercenter growth. The Company expects to open 195 supercenters in the United States this year, down 30 percent from the 281 opened during last fiscal year. Projections for next fiscal year and the following year call for 170 and 140 supercenters respectively, including expansions and relocations.

Eduardo Castro-Wright, Wal-Mart Stores U.S. president and chief executive officer, pointed out that supercenters have a higher rate of return than any other format in the United States and the Company will continue to focus on building the supercenter brand.

“As part of this effort, the company will focus on expansions and relocations of existing discount stores to supercenters, which will result in building fewer new stores. We also are building smaller supercenters, particularly in more condensed trade areas in established markets,” Castro-Wright said. “And, we will concentrate on markets with the greatest growth potential.”

Murphysboro is such a market.