Loss of mini Walmarts hurts small-town budgets
LUTHER, Okla. — Luther sold its youth football field to Walmart about three years ago so that the company could build one of its Express stores, using the money from the sale and the new tax revenue to pay off the roughly $200,000 in debt that resulted from an embezzlement scandal involving the former town treasurer.
The store opened in May 2015 and closed only eight months later when Walmart pulled the plug on its Express experiment, shuttering all 102 of the smaller stores it had opened in mostly Southern and Midwestern towns to compete with dollar stores. Although many locations were taken over by Dollar General, the tax collections just don’t measure up even though the Dollar General stores offer many of the same products, but not a pharmacy.
Tax collections in Luther, a town of about 1,600 on the outskirts of Oklahoma City, rose by $12,000 to $16,000 per month while the Express store was open, said City Manager Scherrie Pidcock. Since Dollar General opened in the larger building, the town’s monthly revenue has recovered about two-thirds of the amount it was collecting with the Walmart Express, Pidcock said.
Luther has tried to pinch pennies any way it can. When its lone paid firefighter — the chief — quit the otherwise all-volunteer department in July, he was replaced by a volunteer, saving the town his roughly $2,800 a month salary. Mayor Jenni White, who took office a few months after the Walmart Express closed, said Luther had to put off buying two new police cars.
“We’re just trying to go slowly, moving forward and not overspend the budget,” White said.
Walmart closed its Express locations because of the demand of customers, who wanted more than the 12,000-square-foot stores could offer, according to Anne Hatfield, a spokeswoman for the Bentonville, Ark.-based company.
“What we learned from the Express stores was that our customers still wanted to shop at the supercenters,” Hatfield said. “The customers were traveling to the other (supercenter) stores,” which sell a full range of groceries, clothing, household and sporting goods, and basic automotive services.
Dollar General also simply doesn’t generate the level of business of Walmart, said Craig Johnson, president of Customer Growth Partners, a retail consulting and research firm.
“Reason number one, Walmart was selling fresh,” Johnson said, referring to produce and meats. “Dollar General I just don’t think they do a good job on it” by displaying items that do not always “appear” fresh, Johnson said.
The disappearance of the Walmart Express pharmacy, which in many towns were the only pharmacies, has also played a role by reducing the number of customers entering the Dollar General stores.
“The pharmacy made customers come to the stores to fill purchases,” Johnson said. “There’s less people visiting store, and mathematically if there’s less people in the store, there are less purchases being made,” of various other items.
“The Walmart is what kept this town from going under,” former Luther Mayor Birlene Langley said. “With Walmart, that was the best thing that ever happened to Luther. And then they just up and left.”