Will new Walmart be good for Whitewater?
A massive expansion is planned next year for the Walmart store in Whitewater, but officials believe the change actually could help rejuvenate the local economy by inviting outside consumers and stifling high prices.
"It's been long in coming," said Russell Kashian, economics professor at UW-Whitewater. "It's a good thing in the fact that the Walmart here is an outdated building. They either have to expand or move. It's a positive in the fact that they're making a commitment to the community."
Several research groups and economists have studied Wal-Mart's effect on communities and small businesses with varying results.
The Center for Urban Research and Learning of Chicago in 2009 evaluated a Walmart store that opened in a Chicago suburb three years earlier. The study found the store was able to absorb sales from other retailers without expanding the market.
Suppliers for toys, electronics, hardware and home furnishings were hurt the most, according to the report. Researchers also found Walmart's opening had almost no effect on employment loss when its own labor force was taken into consideration.
Kashian said the circumstances in Whitewater are different. The Whitewater project isn't a new store, meaning the project will have less of an impact on local businesses.
The store opened in April 1989 and will expand 40 percent—from 70,655 square feet to about 99,000 square feet—and add a full-service grocery store and other amenities. The addition needed approval from the city council because of safety and utility standards, among other requirements.
The expansion at some point will require construction along Main Street. The city and Walmart will pay for a new traffic signal at its entrance to make way for the expected increase in traffic.
City Manager Kevin Brunner said a study in 2008 concluded more than $60 million in grocery spending was leaking from an eight-mile radius around the city. Walmart's addition could keep a lot of that business in town.
The closest Walmart Supercenters are in Jefferson and Janesville. Kashian said Whitewater likely will start drawing consumers from Milton and Fort Atkinson, both less than 13 miles away.
Adjacent to Walmart is Sentry, the city's largest and only major grocer.
Kashian said it's up to Sentry to differentiate itself—such as using a high-end butcher or selling organic foods—to avoid significant losses.
Walmart's presence likely will drive prices down, which will be welcome news to more than 14,000 people who call Whitewater home.
"I think (Sentry) will take a loss," Kashian said. "But at least we're in a city that's relatively underserved for groceries."
Some consumers worry big box stores such as Arkansas-based Wal-Mart invade small communities, eliminate the competition and raise prices, but Kashian said there is no evidence of that. If it happened, shoppers would go elsewhere, he said.
Construction on the building was expected to begin in October but was delayed because of stormwater utility and fire safety upgrades. Store Manager Joey Marx said construction should be completed by December 2011.
Marx said the expansion will create jobs, but a number has not yet been determined.