NEW ENGLAND Wal-Mart Supercenters to face challenges

Some New Englanders are welcoming Wal-Mart's Supercenters, but others are ready to fight.
RAYNHAM, Mass. (AP) -- New England is one of the final frontiers for Wal-Mart's grocery business, which has already transformed the industry in much of the country and is now expanding its reach here.
But the region is a cultural, demographic and economic challenge for the Bentonville, Ark.-based retailer.
And rivals are responding to Wal-Mart's challenge. They're rapidly remodeling stores and building new ones so fast it almost looks as though they're trying to snap up every parcel Wal-Mart might want.
"They're all in the process of staking out their turf," said William Beckeman, a partner in Finard and Co., a commercial real estate firm.
For shopper Louise Ford, the workmen expanding her local Wal-Mart into a grocery-selling Supercenter in this community 25 miles south of Boston can't finish the job soon enough.
"It's about the fact that my husband is now retired, and I don't have as much money to live on," said Ford, who discovered the chain and its low prices while in Alabama for her daughter's wedding.
That kind of anticipation among consumers has chains including Shaw's and Stop & amp; Shop playing defense with aggressive offense.
Shaw's, owned along with Star Market by Britain's J. Sainsbury PLC, is remodeling 90 percent of its 186 New England stores, and plans to add or replace 30 stores in the next three years.
It also plans to buy control of 18 former Ames department stores out of bankruptcy proceedings.
Another rival
Royal Ahold's Stop & amp; Shop, the region's leader with 211 stores and 26 percent of the market, plans to build or replace 30 stores, and will move into New Hampshire next year.
Wal-Mart has done its own shopping, buying 27 sites from bankrupt retailers Bradlees and Caldor's, although not all for Supercenters.
Bernard Rogan, a spokesman for Shaw's, acknowledges that some of the expansion may be attributable to the battle with Wal-Mart, but he insists Shaw's would be growing anyway.
"You don't sit idle, and customers have grown used to seeing competition," he said. "Wal-Mart just stirs it up a little bit more."
Wal-Mart jumped into the grocery business when it opened its first Supercenter in Washington, Mo., in 1988. Its 2,000 stores, with 185 more planned this year, command 8 percent of the grocery market, second only to Kroger, according to research firm Trade Dimensions.
Only two major regional domestic markets -- California and New England -- have yet to feel the full Wal-Mart effect. But in California, where there are no Supercenters, Wal-Mart plans to open as many as 60 within six years.
Locations
In New England, where the first Supercenters opened in 1998, there are now 18, holding 2 percent of the market. Supercenter openings are planned in the next 15 months in Brewer and Bangor, Maine; Epping, N.H.; Raynham; Waterford, Conn. and Westerly, R.I.
Stores recently opened in Plymouth, N.H., and Farmington, Maine. The company is also planning a distribution center in Killingly, Conn.
Wal-Mart has no choice but to expand in the densely populated and wealthy Northeast, said Kathleen Seiders, a Babson College professor who follows the grocery industry.
"They have to be everywhere," she said. "If you look at this as a $230 billion company, in order to maintain their stock price, they have to grow. When you start to look at what 8 percent growth on $230 billion is, that's enormous."
Still, New England is not naturally fertile ground for Wal-Mart's model.
Land and labor are expensive, and support is strong for unions, which Wal-Mart doesn't allow. Anti-sprawl activists have taken advantage of a glacial permitting process. Finally, New England has a relatively older population that may tire of Wal-Mart's cavernous stores.
"The soil in New England is going to be very rocky for Supercenters," said Al Norman, who chronicled his successful efforts to keep Wal-Mart out of Greenfield in his book "Slam-Dunking Wal-Mart!" and now runs a group called Sprawl Busters.
"They may have plans for a significant ramp-up of stores, but I would hope that at least a third of those locations, they're going to run into citizen opposition."