Route to Recovery

A trip through the epicenters of the recession

What does future hold for Walmart’s backyard?

November 10, 2009

ROUTE-RECOVERY/

ROGERS, Arkansas – The area around the Walmart corporate headquarters has been on quite the ride for the past two decades, but many are wondering where the growth will come in the next 20 years.

“Before Walmart’s expansion this was hillbilly country. But there is only so much expansion that one company can bring to the area, even one as large as Walmart,” said Kathy Deck, director of the Center for Business and Economic Research at the Sam M. Walton College of Business at the University of Arkansas.

Central to the Walmart boom have been the jobs not just from the company itself, but from 1,200 Walmart suppliers — including Procter & Gamble to Pepsi and Nestle, and many more — that have opened an office here to be closer to the retail giant.

All told those suppliers employ more than 5,400 people in the area. Trucking firm JB Hunt also has its headquarters in the area, as does Tyson Foods. From 2000 to 2008, the population of Benton County grew by nearly 37 percent, to nearly 210,000, according to the Census Bureau.

Recruiting firm Cameron Smith & Associates has persuaded more than 300 suppliers to set up shop in the area.

“Suppliers that have moved here have found that it really moves the needle for them,” said company president Cameron Smith. “Once buyers at Walmart see you face to face around here, they know that you’re there for them when they need you.”

Every year Smith runs free seminars at the University of Arkansas in nearby Fayetteville on how to break into the Walmart supplier world, like offering to do an upaid internship.

“Many of the suppliers here can’t afford to spend a lot of money on interns, but if you work for them for free in return for training that can make a lot of difference,” he said. “If I receive an application from someone who did an $18 an hour internship and one from someone who worked for free, I’d most likely go for the latter one.”

The central question for Bentonville is how Walmart will manage its future operations. Last week the company said it was eliminating 60 positions from its international division, moving some jobs from headquarters to far-flung offices around the world. Some say this is a wake-up call for a community that has been focused on the local Walmart boom.

“What Walmart is doing makes perfect sense as they need to be able to respond to the local market in real time,” Deck said. “But expectations for further growth in this region have based been on the expectation that international suppliers would move here.”

“The question is where do we go from here?” she asked. “Even assuming that Walmart is going to stay here, we have to diversify our economy.”

Deck said local leaders are still trying to figure out what to focus on next. One possibility that has been touted is to attract “green tech” companies to the area.

“The problem there is that other communities around the country are looking at doing the same, so there’s no clear winner at the moment,” she said. “But whatever it is will be driven by research and a change of focus at the University of Arkansas.”

According to Cameron Smith, more suppliers are likely to relocate here, but with so many retail experts focused in one area he thinks the area has become very attractive to medium-sized retailers.

“I wouldn’t be surprised if we see a retailer move their headquarters here within the next five years,” he said. “And if we get one, I think we’ll get five of them. After all, all of their suppliers are here anyway.”

“Major retailers like Target or Home Depot don’t have to move because suppliers come to them,” he added. “But for the medium-sized ones, moving here would make perfect sense.”

Photo by Lucy Nicholson

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Comments

Now more than ever, Walmart suppliers from all over the world must put their very best forward, both in terms of the quality of goods and services they sell, and also in terms of the people they have managing the account.

Having the right people in the right seats is absolutely critical, which is what truly sets a firm like CSA Recruiters apart from the rest.

But once they are in the right seat, it’s critical that companies invest on an ongoing basis in the development of those people … to ensure they are using tools like Retail Link to it’s fullest capability, but also to stay sharp in a contextual sense … as the change inside the organization only continues to accelerate.

 

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