August 21, 2005

Round Lake Beach

Applied commonsense can be dangerous sometimes; but I don't see what else these consultants could have used when assessing the impact of the new Wal-Mart Supercenter to replace the old WM in Round Lake Beach:

A proposed Wal-Mart super center in Round Lake Beach could make life difficult for one or two local retailers, according to a retail analyst.

The new store, targeted for Route 83 and Monaville Road, will offer a full-service grocery and general merchandise and will likely siphon off customers from the Jewel, Dominick's and Cub Foods stores clustered around the intersection of Rollins Road and Route 83, said John C. Melaniphy, president of Melaniphy & Associates Inc., a Chicago-based retail consultant.

"The super center is going to hurt the supermarkets (because of) Wal-Mart's ability to operate at a cost level so much below everyone else," he said.

Melaniphy's prediction for the Super K-Mart on Rollins Road was even more dire.

"It's going to be history. I'm surprised it's still open," he said. "It's not going to stay a super center."

Mr. Melaniphy lists Wal-Mart on his client page, which is not surprising, as he admits it even when making a hefty charge against Wal-Mart while discussing big-box replacement:
Additional problems arise when a major Big Box like Wal-Mart or Big K relocates and restricts the types of stores that can go into the vacant space. In one instance in which I was involved, Wal-Mart owned their store in a mall and would not permit another major Big Box retailer to take the space.
I'd really love to see the calculations by Wal-Mart executives which demonstrate the profitability of deterring entry from competitors, given that an old store will remain empty.

Posted by Kevin on August, 21 2005 at 09:27 AM