http://thenewsdispatch.com/main.asp?Sectio...amp;TM=35340.29QUOTE
Super' Economic Shift
Local grocers could be concerned about Supercenter opening
Deborah Sederberg
The News-Dispatch
MICHIGAN CITY - When the new Wal-Mart Supercenter opened Wednesday, it marked a major shift in the retail economy in Michigan City. Not only does Wal-Mart have its traditional discount store, but it has added a grocery store and an expanded pharmacy to the local market.
Mayor Chuck Oberlie took part in the grand opening. "Wal-Mart has raised the bar of competition in the city. You always worry about competition like this; we can't get involved in protecting one class of business from another."
Still, Oberlie said he was pleased the store was built with local labor and that Wal-Mart has recommitted itself to supporting local organizations. At the opening, store officials passed out $18,000 in checks to eight organizations.
Oberlie said one of his concerns is what Wal-Mart will do with its 114,000-square-foot building on Franklin Street. Now that it is vacant, only a handful of stores remain in the shopping center that opened in 1990.
"Wal-Mart has promised us they are marketing the building," said Oberlie. "In fact, we have had inquiries from potential users. And to my understanding, at least one of the companies is a retailer."
But for all the optimism about the new store, the Wal-Mart Supercenter is being eyed warily by Michigan City grocery store owners.
While Gil Pontius, president and chief executive officer of Lakeshore Foods Corp., declined to comment on the Wal-Mart Supercenter, he is well aware of the impact of stores like that. In 1998 when Meijer opened on Franklin Street, Pontius closed Lakeshore's 50,000-square-foot store in the Wal-Mart plaza.
Back in 1998, Pontius talked about the competition. "We have always competed well against competition, but it's no secret that our competition has a store five times the size of ours."
Lakeshore Foods, the parent company of Al's Valueland, has two stores in Michigan City, Al's Supermarket, 2600 Franklin St., and one in Karwick Plaza. Both have been remodeled since 2003. The company also operates two stores in La Porte, one in South Haven, Ind., and one in New Buffalo, Mich.
Al Tokoly, manager of K&M Foods in Eastgate Plaza on Michigan Boulevard, said he isn't overly concerned, but acknowledged that the new store "will slice the pie a little thinner."
K&M, a small 13,200-square-foot grocery with 30 employees, has been a fixture on the East Side since 1955. Tokoly has worked there since 1960.
"Frankly, I'd like to see some more neighbors around here," said Tokoly of the dearth of retailers near his store.
"I'm guardedly optimistic. I think we will survive and I think all the others will survive, too," Tokoly said.
Even though the profit margin for a grocery store is 1 percent or less, Tokoly said, K&M works hard to hold down its prices. He said the disadvantage he and other grocers have against Wal-Mart is that when prices rise for milk or eggs, he either has to absorb it or pass it along to customers. "Wal-Mart can give away groceries because they can make it up on the other items they carry," Tokoly said.
Shannon Thiel, manager of the Wal-Mart Supercenter, worked his way up from gathering shopping carts in the parking lot to manager. He said he's proud of the amenities in the Supercenter.
In the produce section, fruits are displayed in containers that appear to be old-time fruit crates. "They give the department a homey feel, kind of a country atmosphere," he said.
He said the Michigan City store is the first to offer a brand of meat known as Genuine Steakhouse Brand. And in the frozen food aisle, Thiel demonstrated how the cold cabinets light up only as a customer approaches.
The store's ceiling lights also function only as needed. A daylight harvesting system uses 76 skylights throughout the store and light sensors monitor the natural light available. Electric lights turn on as needed. The brown concrete floor is made of recyclable material.
Ready-to-go food, both hot and cold, is available from the store's deli and bakery as well as from an in-store Subway restaurant. Thiel said the bakery will sell everything from fresh rolls every morning to special-order birthday and wedding cakes.
Thiel said that in response to customer demand, display shelves are lower and easier to reach. And, he said, "Customers tell us they do not like self check-out. They like someone to be here to check them out, to take care of them."
Amanda Haverstick and Rick Richards contributed to this story.
Contact Deborah Sederberg at dsederberg@thenewsdispatch.com.
By The Numbers
Wal-Mart Supercenter - 186,000 square feet.
Employees: 380
Average wage: $10.80 an hour
Wal-Mart in Indiana: 124 facilities with 39,105 employees. (81 Supercenters, 17 discount stores, four Neighborhood Markets, 16 Sam's Clubs, six distribution centers)