Thousands of visitors will descend on Northwest Arkansas this week, filling hotel rooms, restaurants and stores in advance of Friday’s annual Wal-Mart Stores Inc. shareholders meeting.
Buses will shuttle the visitors, mostly company employees from across the nation and around the globe, to events up and down the Interstate 540 corridor between Bentonville and Fayetteville and at points in between.
The business backdrop for the event is a strong firstquarter earnings report, offset in part by a two-year string of lackluster sales in the company’s U.S. stores.
That’s not likely to dampen the enthusiasm of the visiting shareholders, nor will it diminish the significance of the event hosted by the world’s largest retailer.
“It is first and foremost fantastic international exposurefor Northwest Arkansas,” said economist Kathy Deck, director of the Center for Business and Economic Research at the University of Arkansas’ Sam M. Walton College of Business in Fayetteville.
“We depend on this in Northwest Arkansas as one of those foundation tourism events. Our tourism is business tourism,” she said.
Awaiting those business tourists is the newly revamped and expanded Wal-Mart Visitors Center on the Bentonville square, also known as Walton’s Five and Dime, which was company founder Sam Walton’s first store. The center now features the Spark Cafe. The “spark” is that starlike image that’s been at the end of the Wal-Mart logo since 2008.
Sluggish sales? Not a big issue for Ed Clifford, president and chief executive officer of the Bentonville/Bella Vista Chamber of Commerce and a former merchandising man-ager for Wal-Mart.
“For us, we’ve had another year of all the positive things” as a result of Wal-Mart’s presence, he said. He expects many of the visitors to the square to also check out the construction progress at the Crystal Bridges Museum of American Art, which is scheduled to open in November.
The downtown square can get a bit congested during shareholders week, he said, but the local merchants like it.
“The more they see, the more they smile,” he said.
Bentonville Mayor Bob McCaslin calls the center “a new anchor point for the city there on the square.” And, he said, the nearby museum will be a key destination for future visitors.
“As a city, we’re really proud of that,” he said. “That is the biggest single thing that will happen to Northwest Arkansas in a long time.”
Kelly Cheeseman, a Wal-Mart spokesman, said the shareholders meeting is a time to honor the company’s employees and celebrate its solid financial performance.
“As a company, we’re proud to call Northwest Arkansas home,” she said. “This area is part of our culture and our Wal-Mart culture is special and strong. It’s a great opportunity to show our associates the spirit of Northwest Arkansas and highlight the spirit of the company.”
THINKING SMALL
This year’s event comes as Wal-Mart is gearing up to expand its small-format Express stores and its global footprint.At the same time, the company is restocking U.S. store shelves with products removed during a previous effort known as Project Impact, since blamed for the string of poor sales results.
“Internationally, they’re doing very well,” said Camille Schuster, president of consulting firm Global Collaborations Inc. in Escondido, Calif.
She sees challenges, however, as Wal-Mart develops its small-store strategy. The company’s traditional strength, she said, is an “amazingly efficient supply chain” designed for bigbox retailing.
“These new small stores create a change in that process for them,” Schuster said. “You can’t order the same large quantity and put it in a small store.”
Dollar stores, she said, are “definitely an issue” for Wal-Mart. Those stores, because of their sheer numbers, often are a shorter drive for shoppers. The stores also have increasingly added low-cost food items to their shelves.
“A lot of consumers are desperately looking for lower prices,” she said.
Patricia Edwards, analyst with Trutina Financial in Bellevue, Wash., credits Wal-Mart with “at least trying to do some things,” but she added that, with higher commodity and gasoline prices, retailing is getting harder.
“It’s a tougher game than it’s ever been,” she said.
THE WHOLE LIST
Carol Spieckerman, president of Bentonville-based marketing firm newmarketbuilders, said Wal-Mart needs to clarify how aggressive it intends to be with the new Express format.
“There’s a lot of speculationaround that, and I think it’s going to behoove them to accelerate that,” she said.
The format can work in rural areas that are not wellserved by other retailers and in urban areas where retail space is expensive or, in some cases, very limited, she said.
One key advantage to opening the small stores, Spieckerman said, is that Wal-Mart could vastly increase the number of locations for its site-to-store program, in which customers order items online and pick them up at the nearest store.
“The volume done through one of those stores could be exponential compared to the merchandise actually sold at the store,” she said.
But most importantly, she said, Wal-Mart must get to the right assortment of products - not “sanitized” as it was under Project Impact and not the “clutterfest” it was before that.
The right assortment is critical, she said, because shoppers are continuing to consolidate trips to save money.
“They sure as heck want to get every single item knocked off that shopping list,” she said.
In its first-quarter report, Wal-Mart reported earnings of 97 cents a share, up from 87 cents a year earlier. Companywide, net sales for the quarter were $103.4 billion, up 4.4 percent from a year earlier.
Business, Pages 65 on 05/29/2011