Walmart moves ahead with plans for the region
The largest private employer in the state is moving ahead with long-held, local expansion plans, but owners of small businesses are split on how new Walmart stores would affect them.
Last month, Wal-Mart Stores Inc. closed the period for companies to submit bids on a project to demolish the last remaining building in the former West Hills Shopping Center.
The Bentonville, Ark.-based company plans to build a 151,000-square-foot store at that site, near the intersection of University Boulevard and Brodhead Road in Moon.
The lack of highway occupancy permits from the state Department of Transportation, however, is a major obstacle to construction of the store and another in Penn Hills, government officials said.
Despite some opposition from residents worried about traffic congestion and operators of small businesses concerned about competition from Wal-Mart, some small-business owners said they don't expect to suffer.
At least one business, Flowers in the Attic, a florist, restaurant and gift shop on Saltsburg Road in Penn Hills, would benefit from the increase in traffic, according to its owner.
"We're more of a destination spot," Ken Milko said.
Lynn Kirkpatrick doesn't expect Wal-Mart to hurt sales at the business she co-owns in Moon, The Village Shoppe, a women's clothing boutique on Thorn Run Road, because it is a higher-end store that wouldn't compete with the discount retailer.
Still, Moon doesn't need another discount store, she said.
"Well, I'd like some higher-end (businesses), some nice restaurants. We just don't have a lot here," she said.
Wal-Mart is the largest private employer in the state, according to the Pennsylvania Department of Labor & Industry in Harrisburg.
With 18.5 percent and 10.2 percent of the grocery market share in the Pittsburgh area in fiscal year 2011, Wal-Mart and Sam's Club ranked second and third, respectively, on a list topped by O'Hara-based Giant Eagle Inc., which had 29 percent of the market, according to Chain Store Guide, a Tampa, Fla.-based market research firm.
Wal-Mart has a history of undercutting smaller retailers in order to gain market share, which was one of the reasons Kuhn's Markets president and co-owner Joe Dentici was among opponents who filed an Allegheny County Common Pleas Court appeal of the Moon Board of Supervisors' approval of Wal-Mart's site plan in 2008, Dentici said.
Still, Kuhn's focuses on its strengths - its perishables, such as meats, produce and bakery items, he said.
"And that's what holds our business," he said.
That is the most prudent way for small retailers to compete with Wal-Mart - by focusing on a niche - because they don't have the economies of scale to compete on price, said Jeff Inman, professor of marketing in the University of Pittsburgh's Katz Graduate School of Business.
Wal-Mart's Moon store has been planned for at least four years. In June 2011, the company and the township supervisors reached a settlement over traffic and rooftop equipment problems, and Wal-Mart agreed to pay Moon $55,000 to address pedestrian issues.
Plans for a Walmart for Saltsburg Road in Penn Hills also began several years ago, with the Penn Hills Planning Commission approving the site plan in 2005.
After the proposed developer pulled out of the project, Wal-Mart took over and bought the land in 2007, said Chris Blackwell, principal planner with the Penn Hills Planning Department.
In addition to a highway occupancy permit from PennDOT, the company is awaiting a surface coal-mining permit from the Pennsylvania Department of Environmental Protection before work can begin on the 146,000-square-foot store on a site that includes three-quarters of an acre in Plum, Blackwell said.