iStock.com/Wolterk
June 7, 2024
How Should Retailers Like Walmart Handle Local Communities?
In the ever-evolving landscape of retail, Walmart continually pushes boundaries to enhance customer experiences. Despite recent corporate adjustments, the retail giant remains steadfast in its commitment to technological advancement. Recently, the retailer has been pioneering drone delivery services in Dallas-Fort Worth and integrating AI-powered shopping assistants. As the company grows more lucrative and expands its footprint, local communities in Bentonville experience the transformation like a boomtown.
Sam Walton opened the first Walmart store in Rogers, Arkansas, in 1962, and almost a decade later in 1971, the first distribution center and home office opened in nearby Bentonville. The once quiet, rural Bentonville has since transformed into a bustling hub of growth and innovation, challenging its small-town roots with the dynamics of a booming city.
The catalyst for Bentonville’s metamorphosis can be traced back to Walmart’s relentless expansion. As the retail giant has competed with e-commerce behemoths like Amazon, it has transformed into a tech-driven powerhouse. This evolution has not only reshaped Walmart’s business model but also Bentonville’s landscape and economy.
The physical transformation is evident, with Bentonville now boasting more cranes per capita than any other U.S. city, according to Cushman & Wakefield/Sage Partners — a clear sign of ongoing construction. Walmart’s new headquarters, which will spread across 350 acres of land, epitomizes this growth, with plans for offices, a hotel, a food hall, and extensive recreational trails. Parts of the campus are already open, including a daycare and fitness center, with other parts opening next year in phases.
Over the past decade, Bentonville has seen its population surge from 36,000 to 58,000 residents, with projections hinting at exponential growth reaching 200,000 by 2050. This influx has been fueled by not just Walmart but also other major corporations like J.B. Hunt and Tyson Foods, alongside countless Walmart vendors setting up shop in the area.
And it’s not just corporate infrastructure that’s booming. Bentonville’s cultural scene has blossomed, resembling “startup hubs like Austin, Texas, or major cities like New York,” according to CNBC, with artisanal coffee shops, craft cocktail bars, and chef-driven restaurants.
The Walton family, descendants of Walmart’s founder Sam Walton, has played a pivotal role in this transformation. They’ve introduced mountain biking trails, upscale dining establishments, and even an American art museum named Crystal Bridges.
However, Bentonville’s rapid ascent hasn’t come without challenges. The cost of living has soared, making housing less affordable for longtime residents and newcomers alike. What were once modest neighborhoods now host million-dollar homes, a stark contrast to Bentonville’s humble origins. Despite the challenges, Bentonville continues to attract diverse talent from across the country.
Local officials and organizations are grappling with these changes, aiming to mitigate issues such as traffic congestion and housing affordability. Efforts are underway to develop mixed-price housing projects and preserve the town’s unique character amid the urbanization.
Late last year, Walmart’s renovation of its museum in Bentonville sparked controversy over the demolition of historic buildings housing the museum. While Walmart asserted that the demolition was necessary for safety and compliance with modern standards, community members, including local historian Randy McCrory, expressed surprise and concern over the lack of transparency.
McCrory emphasized the importance of preserving historic buildings and hopes the community will invest in their preservation. Walmart spokesperson Scott Pope underscored the company’s commitment to preserving the area’s historical integrity while ensuring safety. Despite the demolition, Walmart promised the renovated museum would maintain the community’s familiar aesthetic while offering expanded amenities.
Last month, Walmart announced significant layoffs, impacting several hundred corporate employees at its campus offices. The retailer also revealed plans to consolidate its workforce by requiring most remote workers to relocate to primary offices.
As Walmart prepares for employee relocations, the housing market in Northwest Arkansas is poised for substantial changes. Mike Duley, chairman of Keller Williams Market Pro Realty, anticipates an increased use of short-term rental properties in Northwest Arkansas as incoming employees assess the area before committing to long-term housing. He noted that families might stagger their moves, with one partner relocating first to evaluate local schools and amenities such as biking trails and proximity to the university.
The housing market in Northwest Arkansas, which traditionally follows an annual bell curve, has seen a significant rise in home prices. The average home price has nearly doubled from $225,000 in 2016 to over $400,000 today. Duley attributes this increase to the growing population and varying price ranges sought by new buyers.
Despite the rapid changes and challenges, Bentonville stands as a testament to growth and innovation, blending its small-town charm with the dynamic opportunities of a thriving city. With continued efforts to address housing and infrastructure needs, the community is set to remain a vibrant and welcoming home for both longtime residents and new arrivals.
Discussion Questions
In light of Walmart’s tech advancements and their impact on Bentonville, how can other retail giants use technology to enhance customer experience while fostering community growth?
Given Bentonville’s transformation due to Walmart’s expansion, what strategies can local governments use to balance economic growth with preserving local culture and affordability?
With Walmart’s use of AI and drone delivery setting industry standards, what ethical considerations should the retail industry address to ensure technological progress doesn’t harm employee well-being and community values?
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Obviously, having the world’s largest retailer in a town is going to cause growth. And with growth come some issues; Bentonville is not exceptional in this. But Walmart is more of a blessing than a curse as it has opened up so many opportunities for its home town.
But looking beyond Bentonville, I think Walmart does a lot of good in all of the communities it operates in. Many stores make donations to local charities, and Walmart regularly steps up to the plate when relief or aid is needed because of disasters. There are also formalized programs, such as Spark Good, which allow local organizations to engage with Walmart to get grants or undertake charitable activities. A lot of this flies under the radar but, collectively, Walmart injects a huge amount into local communities every year.
When I first traveled to Bentonville in 1980 to do business directly with Sam Walton, I drove from St. Louis to Joplin on 44, but once I turned south to Bentonville, I traveled a very narrow and rural Ozark Mountain state highway 71, with barely enough room for two cars traveling in opposite directions, to pass by each other. There were many narrow curves on high elevations, and one “filling station” all the way to Bentonville. The ride was eerie, similar to driving with Burt Reynolds in the movie, “Deliverance.”
In Bentonville, the only branded motel a Ramada Inn, while the other option had a sign that said, “Hotel.” The BBQ place was small but amazing, and it was where Sam had lunch on most days. I had the pleasure of sitting at the same long table with him, every now and then.
I met with Sam inside his store, and he and I discussed private labeling for his 16 stores, all at the edge of small towns in Arkansas, Missouri, and Kansas. Some of the stores in Kansas were still called, “Gibson’s,” where Sam got his start, and sold water melons off his truck on the parking lots.
I travel enough to know how special Northwest Arkansas has become. It’s almost perfect. It’s sprawling, very clean, safe, and modern. The population exploded, with 90% of the new residents since 1980 working for, or with, Walmart.
But over the years, Walmart has received tons of unwarranted criticism for “hurting” small towns. If residents in small towns didn’t want Walmart to be there, they wouldn’t shop there but they do, in droves. Why is Walmart being blamed? It’s insane.
Walmart does more for it’s towns than any other retailer, business, regardless of size. They provide countless jobs, employee development and training, new skill sets for its workers that they can take anywhere, and some young people get college educations through Walmart. Because of Walmart, towns prosper with other new businesses, restaurants, and often new roads, even new schools.
On a personal note, I treasure the times I spent with Sam Walton, and I framed a personal letter I received from him six months before he passed. He was an amazing guy, but not for the reasons you’d expect. He was more street-smart than anyone I had ever met, in business or otherwise, and his entire business model was intentional, purposeful, and visionary from the beginning. Don’t worry about small towns. Sam set the tone the right way, and it still matters – – a lot. – Db
You were lucky to have met one of the best retailers in the United States. I think he was always on the pulse of the American consumer more so than many other retailers. His legacy continues today , and Walmart continues to be a good citizen never forgetting the humble beginnings in Arkansas. How far they have come.
I worked with the men at Ben Franklin Corporate who thought Sam’s idea would never fly. Imagine that regret! On the other hand, Don Soderquist, one of the nicest men you could ever meet, left to work with Sam. Don went on to become COO and Senior Vice Chair of Walmart Stores.
I’m not sure there’s much WalMart can do to keep Bentonville from becoming increasingly like a “big city”, other than the obvious: relocate their HQ to a place where their size will be relatively less impactful; I don’t see that being mentioned as an option, and presumably that’s not something they want to do (nor, I imagine, would too many in the business community like the idea!). The Museum…incident shows the perils of trying to “do good”, namely that not everyone will agree as to what that is.
Can you imagine the impact on Bentonville if Walmart were to move its headquarters? It would hurt the community in so many ways. Think of the small towns scattered across the country that were hurt when their local Walmart store closed.
Walmart is actively involved in the communities where they operate stores. They are pretty much first in natural (or not) disasters with supplies for the citizens that were part of the event. As far as a mushrooming explosion, they have been making due with what they had for a long time. This is a progression is adding more people to the communities, and where there is demand, there will have to be supply (housing) to support it.
Funny…I bought some land in Buena Vista, AR about 20 years ago on the theory that all those people working in Bentonville would have to retire somewhere. Just sold it recently after a long dip in price.
since I was in their POA for 20 years, I have some experience and I have to to say the county is maturing well. It’s a little red for me, but otherwise I think they’re doing a nice job making the most of the natural area.
Slow and easy…vs. here in miami, which has taken off like a rocket ship
It’s getting purple over here, Paula!
I’m not sure how to answer this question, so here are my initial thoughts.
Progress can be good for growth and the local economy, but sometimes, it leaves nostalgia in the dust. Bentonville is one of those stories. Almost like “Mayberry” (Sorry to the GenZs about this reference to an old television show… Google it!), Bentonville was a small community where everyone knew everyone. It grew. Growth seemed good, and for many, it was. It’s interesting to read about how this growth has adversely impacted some. On the flip side, for those who love the small community living, there are still many in Arkansas (and around the US). One could always sell at a big profit and relocate to what they feel is the more desirable lifestyle. I know… There are friends and family to consider, but at least this is an option.
Local governments can protect economic growth by tracking the inventory of affordable housing. Allowing zoning for multi-unit properties like condos would promote density instead of sprawl. Municipal planners can also ensure sufficient transportation networks, emergency services and public works to support residents as Bentonville booms.
Walmart is to Bentonville as Magnolia, Chip & Joanna Gaines’ empire, is to Waco, Texas. Both towns have seen explosive growth and escalating home prices that are pushing out the locals, but it’s easier to hate on Walmart–the big, bad corporation–than it is to cast asperions on the folksy duo. But at the heart of this, aren’t they both doing the same things to their hometowns?
In 1970, Milton Friedman wrote an essay for The New York Times titled “A Friedman Doctrine: The Social Responsibility of Business is to Increase Its Profits.” The theory argues that the primary responsibility of a business is to maximize its revenue and increase returns to shareholders.
Sadly, that was interpreted by many American businesses to focus on the bottom line to the exclusion of anything else. The interpretation of Friendman in Europe is much more includsive and effective. It interprets Friedman’s comments correctly to include all stakeholders, including the community, suggesting that the inclusion would, in the long term, maximize “profit” for the company.
In my classes, I use Walmart as an example of helping the community and helping themselves. In Bentonville and four of the surrounding communities, Walmart supports education with money and time. While Arkansas ranks 43rd in education overall, the Bentonville area schools are among the best in Arkansas and the U.S.
Why would Walmart support this? Out of the goodness of their hearts? Or understanding that the area will provide skilled and educated employees in the future and those skilled and educated employees will contribute to the company’s future profits.
Protection of Privacy is first and foremost. With the expansion of Drones and AI retailers will be capturing much more video, PII, and personal preferences data. Protecting, not selling, and deleting this data will be paramount and much less obvious until it is front and center. The traditional infrastructure and Cost of living issues are foundational and of at least equal importance.
As a Northwest Arkansas resident, I can attest to all the points made in the article. The area is booming, cranes are indeed everywhere in the downtown district, and housing prices are going through the roof (high-six-figure “scrapes”). Unfortunately, the recent tornados did more damage than many are aware of and it will take months if not longer to clear the fallen trees and repair buildings. Restoring the bike trails that have transformed the area into a mountain biking mecca will likely take longer. All of this isn’t insurmountable but it’s not insignificant either as the short-to-mid-term ripple effects on mountain-biking-related businesses and build-outs will take a big hit (Bella Vista will benefit as its awesome trails were largely unscathed). For the long-term, at a time when it would be all too easy for Walmart and the Waltons to decentralize and invest elsewhere, Alice Walton’s massive funding of Crystal Bridges and its upcoming expansion, the forthcoming medical school and health center, and of course the impressive Walmart HQ campus are transforming the area at a racing pace and laying a strong foundation for the future. Younger-generation Waltons are simultaneously investing in innovative restaurant and community projects and the ongoing expansion of our mountain biking infrastructure. So far, all of this is being accomplished without the sprawl that characterizes other fast-growing areas (I moved here from Denver). In short, Northwest Arkansas is emerging as a diverse, hip, progressive, and desirable destination for travelers and future residents. When I’m out on the mountain biking trails, I invariably run into people plotting and scheming to move here. I’ve decided that staying put isn’t out of the question. Quite the (welcome) transformation.
If another retailer grows like Wal Mart did, in another small (at the beginning) town, the local government should do everything it can to support said growth, and have a well thought out plan for growth in place. Give business a strong framework, and then get out of the way.