Wal-Mart's folksy, baseball cap-wearing founder, Sam Walton, so despised public displays of wealth that, after his death in 1992, the billionaire's...
BENTONVILLE, Ark. — Wal-Mart’s folksy, baseball cap-wearing founder, Sam Walton, so despised public displays of wealth that, after his death in 1992, the billionaire’s heirs decided to enshrine his prized possession, a battered Ford pickup, behind a simple storefront on the town square here.
But Walton’s spirit of restraint is harder to find next door to the museum at Fusion, a new fine-arts gallery that sells $2,500 abstract paintings and $1,200 urns. Or at the nearby Landers Hummer dealership, crowded with $62,000 sport-utility trucks. Or inside Shadow Valley, a gated community where four-bedroom houses fetch $1 million.
The hard-nosed retailing tactics of Wal-Mart Stores have transformed communities across the country, but none more so than in its own back yard. Benton County, once a sedate backwater, is morphing into a swanky oasis in the middle of the Ozarks.
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Wal-Mart’s unchallenged dominance in American retailing — it sells about 30 percent of many household consumables — has persuaded scores of suppliers to open satellite offices around its headquarters to ensure their products remain on the chain’s coveted shelves.
The result is an unprecedented migration of high-paid executives to the northwest corner of Arkansas — professionals from amenity-rich cities such as New York, San Francisco, Atlanta and Miami, who bring not only six-figure salaries but an appetite for Jaguars, sushi, pet day-care centers, Gucci shoes and Chanel sunglasses.
Every week or so a new retailer, restaurant or spa sprouts up and, seemingly overnight, a county synonymous with a purveyor of cheap socks, dolls and televisions is earning a reputation for luxurious living.
Until recently, being dispatched to a supplier’s Wal-Mart office was a dreaded assignment — two years of eating at a nearby Applebee’s and shopping at, well, Wal-Mart.
“Nobody wanted to do it,” said Ron Johnson, who runs the Wal-Mart office for Walt Disney Co.’s consumer-products division. “That’s not a problem anymore. So much has changed.”
Wal-Mart has produced a fair share of millionaires, but Walton’s rigid code of humility — even top executives stay at Holiday Inn when traveling on the company dime — remains deeply ingrained in the company’s culture.
Wal-Mart’s suppliers, however, honor no such vow of modesty.
In Rogers, southeast of Bentonville, nattily dressed executives from Kellogg and Colgate-Palmolive sip lattes and lunch on cold Thai salmon at the Market, a gourmet grocery that offers sushi-making lessons. Up the street at Murphy’s Jewelry, the latest Versace fashion show flickers on a flat-panel television and $100,000 necklaces glimmer from behind a glass case.
Jeff Collins, an economist at the University of Arkansas’ Sam Walton School of Business, said the thousands of suppliers who have moved to the region are “trying to re-create the world they knew back home, wherever that was, and they have the money to do it.”
From 1990 to 2000, Benton County’s population jumped 57 percent, to 153,406 from 97,499, while the average household income rose to $40,281 from $26,021, according to census data.
Once here, suppliers demand the life they left behind — and, if they cannot find it, they build it. Lou McCleese, a logistics expert for Johnson & Johnson’s Wal-Mart office, plowed her savings into Fusion, the art gallery and supply store in downtown Bentonville.
When Phyllis Charette, the wife of a Johnson & Johnson executive, could not find an upscale women’s apparel store, she started her own, All About Her.
Across the street from Wal-Mart’s headquarters, several out-of-town Jewish suppliers have converted a three-room office into a prayer space, available whenever they come through town. A basket of yarmulkes sits on a conference table and copies of the Old Testament line a bookcase.
A synagogue, Benton County’s first, recently opened with 37 families, a large number of them transplants dispatched to Bentonville by a Wal-Mart supplier.
As suppliers move in, their spending power is transforming the lives of those with no connection to Wal-Mart.
Catherine Holmes, 31, bought a hair salon in 1997 that employed 12, most of them earning about $25,000 a year. As more suppliers arrived, she moved closer to an office park filled with executives from Eastman Kodak and Kraft Foods and began offering exotic facial scrubs, massages and therapeutic baths.
Now she has a staff of 50, several of whom earn $100,000 a year.
“Half of my clients are vendors,” said Holmes, the daughter of a Wal-Mart employee who drives a $50,000 Cadillac Escalade. “They are a totally different customer than what we were used to.”
Not everyone is overjoyed by the influx of high-rollers. Rising housing prices have cost long-time Bentonville residents hundreds of dollars in higher property taxes.
“We used to have moderately priced homes here,” said John Rickert, who has lived in Bentonville for 41 years. “Now it’s all exclusive, planned developments.”
Gentrification is creating some powerful — and, to some local residents, troubling — juxtapositions. In Bentonville, a Golf Headquarters shop that uses high-tech computers to analyze a player’s swing opened next to the U.S. Army recruitment center. A contemporary-furniture store selling pink-leather club chairs opened across the street from a pawn shop.
“Everything is higher-end now,” said Rickert, who manages a cafe in downtown Bentonville.
Some residents are scrambling to slow the explosion of housing and retail complexes that are gobbling up farm land and clogging traffic. But most are just watching, with a mix of frustration and wonder, as the little-known rural community that Sam Walton picked to start his company four decades ago grows into a bustling global capital of retail.
“People are tired of sitting in traffic, tired of waiting in line for dinner at their favorite restaurant, tired of change, really,” Collins said. “But Wal-Mart isn’t going anywhere. You cannot put this genie back in the bottle.”