In his second letter-to-the-editor on the subject, Wal-Mart employee Alan Harris makes some interesting points worth exploring.
• Fact 1: Target and any other yet-to-be-named retailers that would set up shop on the ridge would garner 30 to 40 percent of their sales from existing retailers already collecting sales tax revenues for the city and county coffers at this time. Therefore, this would not increase sales tax revenues. If they were to then double their sales over and above this volume, the sales tax generated would be half of the proposed new sales tax revenues. I would not consider this a significant new sales tax revenue.
If new retailers would garner 30%-40% of their sales from existing retailers in Oak Ridge, then 60%-70% of the sales would be NEW dollars! Those opposed to the project keep asking where the "new" revenue would come from — it’s not that Oak Ridgers would suddenly buy a lot more, but that we — as well as our neighbors who travel through Oak Ridge to shop Knoxville — would spend those dollars here instead of elsewhere.
• Fact 2: These other yet-to-be-named retailers may include former stores in the now basically defunct Oak Ridge Mall. Some of these retailers have moved to other locations, such as Manhattan Place and Jackson Square. Some of these no longer exist in those locations, either. Their demise can not be blamed on exorbitant rent charged by the former Mall owners. The logical deduction then is that they could not survive on the volume of sales that they were producing. Therefore, I submit that the shoppers from Oak Ridge and the surrounding area did not shop there frequently enough for them to survive. Perhaps these stores would still be reluctant to reopen upon this proposed ridge and that’s why they remain unnamed. The developers cannot reveal their identities because they have no serious commitments other than Target. I believe this same problem exists for the current mall developers. No commitments. I personally know of one current retailer in Oak Ridge that sought to relocate in the mall and was told that they were not currently seeking any new tenants. It makes one wonder what the mall owners and developers are really planning.
The City’s list of terms and conditions (which must be met for any financial participation by the City) include a statement that 350,000 of the 400,000 square feet of new retail space must be businesses that are not currently located anywhere in Oak Ridge or Anderson County. That’s 87.5% new retailers that we don’t have anywhere in the county.
• Fact 3: If Target truly wants to come to Oak Ridge, they can afford it on their own and do not need developers or city funds to do so. If available dead stores are not suitable or other available property is not available, they again have the money to buy out people in these suitable locations, and will if they want to be in Oak Ridge badly enough.
"IF they want to be in Oak Ridge badly enough." I suppose that could be so… but it’s in our own best interest to give some consideration to our own needs and wants as well — like the need to increase retail sales so that our property taxes don’t skyrocket.
• Fact 4: The restrictive covenant that prevents Target from building on current mall property is standard business procedure and has been for many years. Long-time Oak Ridgers will remember when Treasury Drugs was located in the old Food City strip center on Illinois Avenue and that the White Store located in the old Food City building did not have a pharmacy. As long as Treasury Drugs was located in that strip center there was a covenant that prevented the shopping center owners from leasing to anyone that would consider opening a pharmacy in their store. I am sure that many of you have gone in a store somewhere and wondered why there was no pharmacy, yet all their other stores had a pharmacy. If you had paid attention, there was a Revco or other drug store in that strip center and there was a covenant in their lease that prevented any other pharmacies from being opened in that center.
Just because something is standard practice doesn’t make it beneficial to the City or its residents. It now seems to be standard practice that you have to have a customer loyalty card to get the better price on groceries everywhere except Wal-Mart; that’s clearly advantageous to the merchants, but a pain in the keychain to everyone else.
• Fact 5: The traffic generated on this ridge would be unbearable for those that needed to go to Knoxville for a reason other than shopping. Perhaps they have a doctor’s appointment or a family member that has been taken to an emergency room in a Knoxville hospital and would like to get there as soon as possible. Have you ever been late because of traffic?
Perhaps the gentleman needs a map; there are multiple ways to Knoxville besides going over the hill at Boeing. From Illinois Avenue, I often take Scarboro Road (to Union Valley or Edgemoor Road) if traffic appears to be a problem going over the hill; many folks on the east end just run along the river to Edgemoor to hit either Clinton Highway or Pellissippi Parkway. If you want to cite traffic snarls, take a long, hard look at the extra red light in front of Manhattan Place — the only place I’ve ever seen traffic gridlock in Oak Ridge. And it does gridlock, almost daily.
Look, I understand why Wal-Mart might be worried. Competition makes one try harder, just as the advent of the Oak Ridge Observer made the Oak Ridger a better newspaper. While it might be some extra work for Oak Ridge’s long-running daily, there’s no question that competition fostered improvement, which benefited all of us who read the papers.
It is critical to the economic health of this city to expand our retail base, and this plan is workable. Join the effort today, and let’s make something good happen on June 5!
Thanks for exploring this letter. I had some very similar thoughts upon reading it this morning.
I think an additional point to be added to “Fact 4” is that Wal-Mart owns the covenant restricting what can go into the mall and intends to exercise it. All the wantabees who wish CrestPointe would locate in the mall can forget about it. The Wal-Mart spokesman says, “NO!”
And a minor point on “Fact 1”, if Wal-Mart’s analysis is that 60%-70% of CrestPointe sales will be new sales, you can be guaranteed that this is a minimum level based on their motive to release the data. Therefore it is safe to say that at least 70% will be new sales.
WalMart may have the most restrictive of the covenants, but it’s my understanding that the anchor tenants all have some voice as well. However, based upon the diversity of offerings that were originally present in the mall, I think it’s safe to say that the WalMart restrictions are the ones causing the biggest problem.
Mr. Harris does say that he does not speak for WalMart, so my assumption is that the percentage taken from existing retailers is his own number. I really don’t know if that has any basis in WalMart research or not.
Just after Christmas, WalMart got rid of their sewing/fabrics department, allegedly because “Target doesn’t have one.” How silly — they had something that would draw me to their store rather than someone else’s, so they got rid of it? I’ve noticed though, that WalMart stores in other regions still have a fabric department.
Of course Wal-Mart competes with Target all over the country. I suspect that the reconfiguration that is going on in this store and which started soon after CrestPointe was announced is a well designed strategy to minimize the impact of the pending competition.
As for whether Mr Harris did some fact checking with his employer or not is up to him and them to reveal.
Traffic problems? Try Lovell rd. @ Turkey Creek. Somehow shoppers brave that snarl to get there.
Good post NM.
It appears Mr. Harris has a personal agenda. Could it be that he doesn’t wish to “work harder” to compete and remain at the, as MC says, Status Quo?
Wal-mart is notorious for restrictive competition tactics. Many years ago, as an employee of Howard’s Brand Discount (c), our manager had a store meeting and declared that he was looking forward to the “new” K-mart being located next door and the “new” Kroger attached. He was looking forward to two things, traffic flow increase and competition. He felt that traffic flow would increase sales, and more competition would boost the bottom line if he kept tabs on prices through regular pricing surveys at the K-mart. I went many times and recorded prices, returned to the store and lowered that same item if hihger to sometimes as much as 10%.
Of course Howard’s is now out of business, not because of a lack luster local store management, but because of being absorbed by a company that wanted to use them to get out of financial trouble. Howards sank while inside the hold of Wicks Lumber Company being the most viable holding of that Company.
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