Chains expanding in No. Carolinas

Discount Store News, July 6, 1987

Chains Expanding in No. Carolina

GREENSBORO, N.C. -- North Carolina economists see their state in terms of two economies existing side by side. One is geared toward rural, small-town America with factoriies such as textile and furniture facilities bolstering farm income. The other is a service economy, geared toward urban Yuppidom and sustained by finance, government, and research and development.

Major discount chains are thrusting into both economies with distinctive expansion patterns. As customary, Wal-Mart Stores, Bentonville, Ark., is targeting small-town America as it prepares to open the rest of nine new stores in the state, adding to the three units it had at the start of 1987. Next year, it plans to open 12 more in the state.

The North Carolina stores are part of about 125 stores Wal-Mart intends to add this year to its, 1,035 total, followed by a similar number in 1988.

In its first foray into the state, Bradlees, based in Braintree, MAss., is building three new stores in the service economy clustered around Greensboro and the capital, Raleigh. The three new stores, one in Raleigh and two in greensboro, are scheduled to open this fall. They are part of the 10 new stores Bradlees is opening this year. The 1987 openings will push its store count to 172.

Until now, the farthest south Bradlees had ventured was Virginia, where it operates 17 stores. "North Carolina was a logical step," said a Bradlees spokesperson in the only word the chain was willing to release about its expansion southward. the spokesperson declined to disclose the locations of the remaining four stores Bradlees expects to open this year.

A major development behind the Wal-Mart push northward into North Carolina is its new 1.3 million-square-foot distribution center in Laurens, S.C., capable of supporting 150 to 180 new stores. The new DC will open in the summer or fall of 1988, said Stacy Duncan, as Wal-Mart spokesperson.

It will provide seasonal hard lines support to stores in Georgia, Kentucky, North Carolina, South Carolina and Tennessee, she said. In addition, the DC will provide soft lines support to about half of Wal-Mart's stores.

"The new center paves the way," for the North Carolina expansion push, she said, adding, "The South is our market."

So far in 1987, Wal-Mart has opened new North Carolina stores in Hickory, Mt. Airy and Spindale. Additional units are set to open from summer through early fall in Concord, Shelby, Lenoir, Southern Pines, Mocksville and Morganton.

All are towns in the 10,000 population range to 60,000 population range that Wal-Mart favors, Duncan said.

Duncan declined to comment on the competitive impact the Wal-Mart expansion will have on Rose's Stores, Henderson, N.C., which also tends to seek out the same smaller-town market.

Nor would George Harvin, director of expansion for Rose's. "I'd rather not comment" on the effects of Wal-Mart's expansion or to specify in which towns Rose's plans to build new stores this year, Harvin said.

Harvin did say, "We plan to add 25 stores a year through 1990 in our heartland, North Carolina and Virginia." Rose's has located 92 of its 212 stores in North Carolina.

"Rose's absolutely will be Wal-Mart's biggest competitor," predicted Robert Brinkley, assistant director of the Business and Economic Development Division, N.C. Department of Commerce. "They are tough, tough competition." He added, "They put up a lot of stores."

The Wal-Mart expansion also may affect Family Dollar Stores, Charlotte, N.C., a 1,000-unit variety store chain that also focuses on smaller towns, said John Connaughton, director of the Center for Business and Economic Research at the University of North Carolina campus at Charlotte.

"North Carolina has a lot of towns with no competition that are the size Wal-Mart likes," said Connaughton.

Lumping together the diverse economies of North Carolina, the state should enjoy a 3 percent real growth rate in 1987, and a jobless rate of 5 percent, he predicted.

In fiscal year 1985-86, retail sales for the state totaled $55.1 billion, the state Department of Revenue reported. Raleigh and Greensboro represent similar size retail markets, $3.3 billion and $3.1 billion, respectively.

The new Bradlees in Raleigh will be located about nine miles from the Triangle Research and Development Center. With its concentration of pharmaceuticals, R && D and electronics, Triangle Park, employing 30,000, is "Silicon Valley East," said Brinkley.

The Raleigh-Durham-Chapel Hill region is the economic and intellectual heartland of the state. Durham is home to Duke University, while the main campus of the University of North Carolina is at Chapel Hill. Greensboro, about 60 miles away, is home to another UNC branch campus.

The Raleigh area is getting another major boost from the new American Airlines regional hub opening this month at the Raleigh-Durham Airport. By employing about 5,000, the hub will help push the area's jobless rate down to 2.5 percent (or down to half the state average).