- The Washington Times - Tuesday, June 19, 2007

THE WASHINGTON TIMES One in an occasional series chronicling how the opening of a new Wal-Mart affects a small Virginia town.

KILMARNOCK, Va. — David Rose feels like he could be sitting on a gold mine.

Wal-Mart Stores Inc. is about four months away from opening a supercenter next door to Rose’s Crab House & Raw Bar, his restaurant on the northern end of this quiet coastal town just two hours south of the Capital Beltway.

Mr. Rose says he is concerned Wal-Mart could change the town’s character, but he recognizes it as a business opportunity.

“If the Northern Neck has to have a Wal-Mart, I’d rather have it in my parking lot,” he says as Wal-Mart finished constructing the walls of its nearly 150,000-square-foot store last month.

You’d think Mr. Rose has it made. If history is any judge, Wal-Mart is going to bring hordes of people past his restaurant, and at least some of them will crowd into Rose’s after a day at the discount store.

But as soon as he heard Wal-Mart was coming, Mr. Rose focused his energy away from the crab house and on opening a second restaurant, a steak house in the town’s downtown.

He realized that suddenly the land Rose’s Crab House sits on is hot property. His landlord could get a sweetheart deal and sell the land, forcing the crab house to close. And if the crab house stays open, the 1.5-hour wait on the weekends will likely swell with Wal-Mart shoppers.

So Mr. Rose opened Rose’s Steak House & Saloon, which will be a place to direct the crab house’s overflow business. And just in case the crab house has to close, Mr. Rose will still own a restaurant, he explained during the steak house’s second night in business last month.

In a 1,200-person town, the world’s largest retailer doesn’t just affect the land where it builds a store. Nearly the entire business community has had to make changes, whether large or small, to counter what it expects will be strong competition from Wal-Mart. Even those who stand to benefit from Wal-Mart, such as Mr. Rose, are taking steps to protect themselves.

“[Business owners] have to be what they originally were: entrepreneurs,” says Shawn Donahue, who owns a number of small shops in Kilmarnock.

He expects Wal-Mart will “erode” business at his toy store, Christian book store, gift shop and furniture store, among his other shops in the town.

“If you happen to be buying food at Wal-Mart and you stop to buy a toy, that’s erosion,” Mr. Donahue says. “How much erosion can a small business take?”

While many business owners fear the Bentonville, Ark., retailer will siphon sales, many Kilmarnock residents welcome Wal-Mart for its low prices and convenience. Many shoppers already make a 30-minute trek to the chain’s stores in Tappahannock or Gloucester. But some residents are concerned Wal-Mart and the development that is starting to follow it will make Kilmarnock more like the big cities they avoid.

Feeling the pinch

Ed Dawson decided that the combination of the tough independent retail market, a year’s worth of street construction in front of his store and the impending Wal-Mart was too tough a combination to beat.

“We had no business for 13 months,” he said of the reconstruction project on Main Street, which made the front door to Dawson’s Ltd. clothing store useless from June 2005 to July 2006. Ironically, the town completed the Main Street project partly to help retailers survive against Wal-Mart.

Wal-Mart just adds to it. … They don’t carry anything we carry, and it’s [still] going to hurt us,” he said.

Mr. Dawson, 71, plans to close his 34-year-old clothing store before Christmas. He put the building on the market last month, he says from behind the counter of his store.

“It has taken me a year to get used to leaving,” he says, resigned to involuntary retirement.

A few doors north on Main Street, Brenda Shirah has reformatted her store, the Doll House, from a doll store to a broader gift shop.

“When Wal-Mart has a doll that I carry, I stop carrying it,” she says, reflecting the idea that none of the Kilmarnock retailers are going to try to compete with Wal-Mart on price.

But the Main Street renovations have hurt her, too.

She made about $300 in sales on a recent weekday. Before the construction, $500 was a bad day, she says.

Ms. Shirah worries that the drop in sales prompted by the construction — which still hasn’t rebounded, she says — will only get worse when Wal-Mart comes to town.

Development’s aftermath

Development in Kilmarnock is happening at a pace the town has never seen, town officials say. Everyone in town is going to see some effects, from more dining options to lower gasoline costs.

Three developers have expressed interest in buying an empty lot across the street from the Wal-Mart, said landowner and developer G.C. Dawson, who is not related to the clothing store owner. Kilmarnock Mayor Curtis H. Smith expects a big box home-repair store to open on the site.

Mr. Smith says he is excited development is spreading in town.

“We’re surprised it happened that fast [after Wal-Mart],” he says. The mix “is going to make Kilmarnock strong.”

In addition, Atlanta-based Shopping Center Group has a 28,000-square-foot strip center planned for immediately in front of the Wal-Mart and next door to Rose’s Crab House.

It’s slated to be filled with 14 shops, typical Wal-Mart co-tenants such as those selling women’s clothes, cell phones, electronics, shoes, a sandwich shop or hair salon, says Tom Kinter, one of the developers behind the store.

About 60 percent to 75 percent of the tenants likely will be national chains, he says. Today, there are few national chains in Kilmarnock besides fast-food restaurants, Food Lion and Peebles department store.

Changes no big deal, backers say

Any concern about Wal-Mart is old news to Mr. Kinter, who has developed Wal-Marts all over the Northern Neck. He says it hasn’t been an issue in the 10 years he’s been working with the retailer, including at a hotly contested store in Ashburn, Va.

“We have not seen the impact to local business, to the downtown areas forecast by the opposition groups,” he says.

The store’s new manager, Jim Fryrear, says he applied to work at the Kilmarnock store because he likes the town and hopes to preserve it.

“I love the small-town feel [of Kilmarnock]. I love the community. I built a home 30 miles from here. The folks who live in my community are somewhat the same as the folks who live in Kilmarnock,” he says of the 2,900-person town of West Point.

The holdouts are skeptical.

“He’s from the type of town we had and are ready to lose,” says Joe Hudnall, a staunch opponent of Wal-Mart and president of Noblett Inc. appliance store. “He’s going to come in and ruin it.”

But Mr. Fryrear says he plans to build a community where Wal-Mart and mom-and-pop shops can live together.

“I think we can co-exist,” Mr. Fryrear says. “I think those who feel that way, they need to look at the earlier models when we went into Rogers, Ark., and some of the smaller communities … we became very successful because we catered to communities.”

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