Wal-Mart pulls the plug

Local officials and Wal-Mart were all smiles when the ribbon was cut for the opening of the Neighborhood Market in Hillsboro Heights April 8. Nine months later, the corporate office announced it would be closing the Hillsboro store and numerous other Neighborhood Market facilities, regardless of profitability, on Jan. 28.
Local officials and Wal-Mart were all smiles when the ribbon was cut for the opening of the Neighborhood Market in Hillsboro Heights April 8. Nine months later, the corporate office announced it would be closing the Hillsboro store and numerous other Neighborhood Market facilities, regardless of profitability, on Jan. 28.
Whether it?s called a Wal-Mart Express or a Wal-Mart Neigh??borhood Market, the Hillsboro store is one of more than 150 locations closing because of a pilot program that failed.

Less than nine months after its grand opening, Mayor Delores Dalke on Friday heard the Hillsboro store is closing Jan. 28.

?First, I got a call before 7 a.m. from corporate headquarters, and later a call from the local manager (Brian Miller),? she said. ?When Brian called, he was in shock.?

Dalke, who is in Denver, Colo., said news of the closing on Jan. 28 is a major hit to the city.

Corporate officials, she said, also called the Wichita mayor, which has three of these sized stores.

?All of these stores that are called their Express models are closing,? she said, ?It?s not just in Kansas, but all over the United States.

?They are only keeping the big super centers.?

For Dale Franz, owner of Dale?s Supermarket, the news was surprising, but not totally unexpected.

?My warehouse told me for many, many years that this town is only big enough for one grocery store,? he said. ?That?s why when Vogt?s Grocery Store was here, we both struggled.?

The problem with Wal-Mart coming to a town the size of Hillsboro involved the company maintaining a large corporate attitude.

?They couldn?t special order anything, and they didn?t cater to the small-town people,? he said.

When news that all the Express stores were closing, Franz said he learned that Rose Hill?s other grocery store closed down, and at the Clearwater grocery store, the pharmacy closed because a large majority of customers switched to Wal-Mart.

Part of the rationale, Franz speculated, was that if a lot of the local grocery stores and pharmacies closed, it would mean Wal-Mart?s Supercenters would gain all that back.

?Who would be willing or able to drop $2 million to $3 million (to start a new store) after the Express store closed?? he said.

Dalke explained this situation is similar to when Alco declared bankruptcy.

?It didn?t matter that the Hillsboro store was making money?it was the end of it for all the stores.?

Another negative impact associated with the store?s closing involves city workers.

?We didn?t give our city employees any kind of raise last year because of Alco and Heartland Foods leaving, and what that did to our sales tax,? she said.

?With things going so much better (with the new Wal-Mart here), we voted to give our employees a raise at the last council meeting and now our sales tax is going away.?

Regarding the building, Dalke said she was told that Wal-Mart Real Estate Division would be in charge of that.

It was also Dalke?s understanding, she said, that the employees will continue working at the Hillsboro Wal-Mart until Feb. 10 to clean out the store.

?I was also told the company will try to put as many employees to work in Newton and McPherson as possible, and the rest will get severance pay.

?It?s awful,? she said about the news.

Delia Garcia, media relations in Phoenix, Ariz., said all 102 Express outlet stores were closing because as a pilot format, it didn?t work.

?It gave us some critical learning and after looking at our portfolio we made the deci?sion that to maintain health of the business it was a step we needed to take,? she said.

?We try doing new things all the time and use pilot formats to improve on customer service.?

Wal-Mart is a business that responds to customer demands, Garcia said, and the express was an opportunity to do key learning and see what was important to their needs.

Customers better served with a full-size neighborhood market concept and these are better positioned to be more efficient and effective, she said.

The Express store is about 12,000 square feet and the Neighborhood Market stores were about 38,000 to 40,000 square feet in size, Garcia said.

Although the Hillsboro store was called a Neighborhood Wal-Mart, it was actually an Express store, she added.

Garcia said: ?Closing stores is never an easy decision, but as we looked at better serving our customers and position our company for future growth, it was a decision we needed to make.?

As for the building, Wal-Mart will look at leasing or selling it.

The reality is that Wal-Mart continues to grow as a company and will open between 200 to 240 new stores, she said.

?We know it is a challenge in Hillsboro for our customers because the nearest Wal-Mart is 22 miles away, but we also knew our Hillsboro customers were also shopping at the supercen?ters, too,? she said.

In Kansas, she said, six Express stores included Burlington, Clearwater, Columbus, Ellsworth, Hillsboro and Rose Hill.

In Wichita, three traditional Neighborhood Market were also closed.