When Wal-Mart Moves In, Neighborhood Businesses Suffer. Right?
Not in Landover Hills -- At Least So Far, Proprietors Say It's Business As Usual

By Ylan Q. Mui
Washington Post Staff Writer
Monday, June 23, 2008

Anthony Ramdass used to worry about Wal-Mart.

For more than a decade, he has watched from behind the counter of his pharmacy in a converted pool hall as businesses slowly blossomed along Annapolis Road in Prince George's County. Then the biggest retailer in the world arrived, offering $4 prescriptions and always low prices. Ramdass braced himself for legions of defections.

But the pharmacist said not much has changed in the year since the behemoth from Bentonville, Ark., threw open its doors. His loyal clients have not strayed. They like the fact that he delivers for free and remembers most of his customers' names.

Wal-Mart opened its store in Landover Hills -- the first inside the Beltway -- in a storm of controversy last year bred in part by its reputation for running small businesses like Ramdass's out of the rural towns and suburbs that for decades were the retailer's breeding ground. There was concern that the so-called Wal-Mart effect would be replicated, if not magnified, once it moved into more urban areas, such as Landover Hills.

No comprehensive study has been done on Wal-Mart's impact on this stretch of Annapolis Road, the heart of this redeveloping neighborhood. But local proprietors and community leaders say the fears have not panned out. Some say the dour economy is a bigger threat than Wal-Mart. Other store owners credit Wal-Mart for boosting their sales, through both its proximity and community outreach programs.

"Wal-Mart was just the big gorilla coming into the community," Ramdass said on a recent afternoon, standing behind the counter of his store. "I think it's perception more than reality."

Ongoing research at Loyola University Chicago suggests one reason why the small businesses have been preserved. In examining Chicago's blighted West Side neighborhood in the year after Wal-Mart entered, researchers found some correlation between how far a business is from Wal-Mart and its likelihood of surviving. That relationship seems to be weaker in urban Chicago than in smaller towns, said Julie L. Davis, the university's community research coordinator and who is leading the study. Davis said more study is needed and expects to complete the research over the next year.

"There's so many other things happening in an urban environment," she said. "It'd be so tough to nail down what's up with Wal-Mart."

The retailer designated Chicago and Landover Hills as two of 10 "jobs and opportunity zones" designed to spur economic development around its urban stores and help small businesses. When it launched the program two years ago, Wal-Mart said it would offer free advertising to local stores and seminars on how to do business -- and even compete -- with Wal-Mart. It also promised grants to local chambers of commerce. The program is designed to last two years in each community.

The company has carried out parts of the program in each zone. It is working with businesses in all locations on advertising but has yet to hold a seminar in Landover Hills. Wal-Mart spokeswoman Rhoda Washington said she hopes to hold one soon. Adam Arroyos, who oversees the program nationally for Wal-Mart, said the most well-attended workshop was held in Decatur, Ga. It has since evolved into business networking sessions and expanded to Miami, Tampa and Raleigh, N.C., he said.

"There's not a one-size-fits-all," Arroyos said. "We leave the design in which that's going to happen to the community."

In Prince George's, Wal-Mart has donated several thousand dollars to help four independent businesses near the store advertise in local newspapers. It also produced radio spots to air over the store's sound system. Wal-Mart selected the stores with help from local officials.

The company is also spending $18,700 to provide ads for five businesses in the District's Ward 5, which borders Prince George's County. Wal-Mart worked with the Greater Washington Hispanic Chamber of Commerce and the office of Ward 5 D.C. Council member Harry Thomas Jr. (D) to select the businesses. Hunegnaw Abeje, owner of Windows Cafe on Rhode Island Avenue NW about six miles from the store, said he would not be able to advertise in newspapers without the grant from Wal-Mart.

"Anything helps," he said. "Doing this, giving money is a big deal."

But Bobby Stanford of Bobby Q's Restaurant in Northeast said he was frustrated by the long process required to receive the ads. He has met several times in recent months with the local Hispanic Chamber of Commerce and Wal-Mart on the design and placement of the ads but has yet to close the deal.

"The only thing about freebies is you never get them," he said, sitting inside his restaurant one morning. "They're just taking their time and going through the motions. . . . We're having too many meetings and no results coming."

Ana Harvey, president of the local Hispanic Chamber of Commerce, said the group is ready to help the businesses pay for the ads, which could starting running as early as this week.

Wal-Mart said it plans to spend $50,000 over two years to provide advertising for businesses around its Landover Hills store. It also has budgeted $50,000 in donations to local business organizations, including $10,000 to the Prince George's Chamber of Commerce, $10,000 to the International Chamber of Asia/African Business Entrepreneurs, and $10,000 to the local Hispanic Chamber of Commerce.

"It's allowed us to connect with them at a local level," Arroyos said of the jobs and opportunity zone. The program helps the community "understand Wal-Mart beyond the four walls."

Community leaders pointed to a pact negotiated with Wal-Mart before the store opened as one of the main reasons for the retailer's limited impact on other businesses. Wal-Mart promised to limit the amount of groceries on store shelves and its hours of operation, among other things. In addition, the closest business to it are McDonald's and Chevy Chase Bank, neither of which is a rival.

"We want the store to succeed," said Sadara Barrow, executive director of the Port Towns Development Corp., which includes Landover Hills, and the neighboring communities of Colemar Manor, Bladensburg, Edmonston and Cottage City. "At the same time, we're still performing the activities somewhat of a watchdog."

Traffic has increased at a neighborhood shopping center about two miles from Wal-Mart that includes an exotic pet store, Bank of America and IHOP, according to shopping center owner Rufus Lusk.

"We've been very appreciative of Wal-Mart's presence," Lusk said. "They say about Wal-Mart that many trees can grow in the shade of a large oak."

Ted Decker of Chandler's Medical Supply said the opening of Wal-Mart has also been good for his business, which specializes in products such as diabetic socks and blood pressure units and competes with Wal-Mart in some categories. The store is a remnant of Chandler's Pharmacy, a neighborhood landmark that closed three years ago when the owner retired. Chandler's Medical Supply recently moved about a quarter-mile from its original location and now sits next to a CVS. Wal-Mart is a five-minute drive away.

"People come in here looking for service," Decker said. "You go in [Wal-Mart], you don't ever know who you're going to see. And none of them can help you."

A few doors down, Jim Biedlingmaier of Bill's Hardware said any impact on his business by Wal-Mart has been overshadowed by the economic downturn. And at nearby 7 Market, Mary Nam agreed that her biggest concern was that shoppers simply have less money to spend.

"Now, everywhere is slow," she said.

Barrow, along with several other community leaders and activists, still meets with Wal-Mart each quarter to discuss the store's performance. Now that Wal-Mart is here, they say, its success is vital to the community.

"We want to make sure the businesses in our community are being good community citizens," said Denise Hamler, a member of the group. "But it takes a great commitment on the part of the community and a great commitment on the part of Wal-Mart."

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