SearsCanada
Joined: 29 Mar 2006
Posts: 1205
Location: Ontario, Canada
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Posted: Tue Aug 29, 2006 2:37 pm Post subject: Walmart strategy explained
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An interesting article which explains how Walmart goes about its location strategy. Yes, they spend capital!!
There have been a number of articles recently depicting Walmart's move into the smaller centers, which will certainly affect many retailers. Love 'em or hate 'em, they are here to stay, and spreading like an infestation.....
http://www.theglobeandmail.com/servlet/story/RTGAM.20060827.wwalmartt0827/BNStory/Business/home
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Wal-Mart's next battlefield
MARINA STRAUSS
From Monday's Globe and Mail
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For more than a year, Wal-Mart has been trying to get into Port Elgin, a burgeoning Ontario town on the shores of Lake Huron.
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Joshua Kaufman, director of land development at SmartCentres, spent months in early 2005 studying the Port Elgin market. He drove around town, browsed its stores and chatted with local townspeople. He spoke with municipal engineers, planning officials and the local Chamber of Commerce representative. He observed people's driving and shopping habits.
He made the inquiries using his own name, not that of SmartCentres, because he didn't want to attract attention. SmartCentres is so closely identified with Wal-Mart that just using the corporate name could raise the bidding price of a property. “We didn't know who Mr. Kaufman was and who he was representing,” says Ron Brown, Saugeen Shores's chief administrative officer. “That's quite common. He said he was interested in a big retail development . . . But we did the research. We assumed it was Wal-Mart.”
By April of that year, Mr. Kaufman sealed a deal for a parcel of land on Highway 21 at the south end of Port Elgin, at one of its entry points. Then he focused on getting closer to the community. He contacted town councillors and the mayor. He joined the Chamber of Commerce.
On Dec. 5, the developer submitted its formal application for a zoning change to allow for a larger retail space than was permitted on the site. The application was supported by five SmartCentres-commissioned studies on the retail market, traffic patterns, planning issues, public services and an archaeological assessment.
The developer spends an estimated $1-million a month just on outside advisers for these types of applications, observers say. The more opposition it anticipates, the more consultant reports it orders. Along with that, SmartCentres employs an in-house team of about 80 specialists who work on applications — engineers, architects, financial analysts, lawyers, leasing and project managers.
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