Local retail stores have mixed emotions about the effect of
Gilroy
’s new Wal-Mart Supercenter and outlet stores Though some
merchants in Morgan Hill worry Gilroy’s new Wal-Mart Supercenter
will further encourage residents to spend their retail dollars
outside of town, many other business owners believe they can
compete against the retail giant.
Though some merchants in Morgan Hill worry Gilroy’s new Wal-Mart Supercenter will further encourage residents to spend their retail dollars outside of town, many other business owners believe they can compete against the retail giant.
The 220,000 sq. ft. Wal-Mart Supercenter opened its doors in Gilroy on Wednesday at the Pacheco Pass Shopping Center on Highway 152. But will the discount retailer and grocery store contribute to Gilroy’s drain on the local economy?
“Absolutely,” said Gerardo Larios, store manager for the Ross Dress For Less store in Cochrane Plaza.
“It’s not only Wal-Mart and the outlets that’s taking our businesses here, but also HomeGoods and Old Navy have opened new stores there,” he said. “They’re taking customers from Hollister, Gilroy, Watsonville, who used to come here.”
In spite of Gilroy’s quick development into a regional retail powerhouse, Larios and numerous other businesses remain positive.
“We’re lucky, we’re holding our own,” he remarked. And it did seem that way Wednesday afternoon as dozens of customers lined up behind Larios’ counter to make purchases.
Like Larios, most stores and restaurants in the larger shopping centers in Morgan Hill report sales are steady. A number of stores even report better sales this year, adding to their confidence in standing up to Wal-Mart – a company that has become notorious for outcompeting small businesses across the country.
“I’m not concerned,” said Julie Luu, a manager at Miller’s Post in Cochrane Plaza. “Wal-Mart won’t affect us. To be honest, if the outlets don’t really affect us, Wal-Mart won’t. In fact, we have people from Gilroy coming to our store. You can’t find everything in the outlets or Wal-Mart. In fact, our sales are going great right now.”
Sales are up from last year, according to another Miller’s Post store manager, Brandon Trumble.
Sales tax revenues increased 34 percent throughout the city last year according to a budget report released by the city in July, but retail sales tax receipts actually decreased by 2.6 percent.
Trumble, however, is more concerned with losing the Target store in Cochrane Plaza to a new retail center across the Plaza than he is about Gilroy’s new Wal-Mart and outlet stores.
“It all depends who takes Target’s place,” he said.
He indicated Ross and Mervynn’s will still attract shoppers to Cochrane Plaza, as will Miller’s Post, which carries special brands of men’s and juniors clothing.
“We’re still different from Ross and Mervynn’s. We’re known for our Anchor Blue brand and we’re notorious for our great clearance prices,” said Trumble.
But time will eventually tell the store’s strength. He disclosed the store is up for review in January, and if figures are good, they will remodel. If sales are not too good, they may pull out of the shopping center altogether. Miller’s Post has been at Cochrane Plaza since 1989.
“It would be a shame to lose the store. We need to rally school kids to save the store,” said Trumble.
Other retailers also believe they can stand up to Gilroy by offering a diverse selection of quality products and a commitment to customer service.
“Nobody really is in our venue,” said Leila Wright at Kickline Dance & Fitness Apparel in Cochrane Plaza. “The outlets are there, but they are part of a chain and are hit and miss. They don’t have all the sizes.”
Most important, Wright noted, the personal service the store offers means more than price to many of her customers. The store, which is celebrating their third anniversary this month, provides a wide variety of dance and women’s fitness apparel, gym clothing and cheerleading outfits.
Super Wal-Mart’s sprouting in Gilroy is also of no real concern for TJ Maxx, according to assistant store manager Vicki Gemskie. TJ Maxx is located at the Vineyard Town Center.
“We’re not exactly affected by it,” she said. “People that go to Wal-Mart are not our customers.”
The Morgan Hill store is doing well, said Gemskie. While HomeGoods opened recently in Gilroy also, and the TJ Maxx stores are affiliated with the super store, Gemskie said she didn’t feel the local store has lost customers.
“We find customers will drive and shop to find what they want. Those loyal to HomeGoods will also visit our TJ Maxx store in Morgan Hill,” said Gemskie.
Although he doesn’t face direct competition from Wal-Mart, Fast Frame manager Tim Larsen said the Tennant Station store does compete with Gilroy’s Michael’s. Since the frame shop opened in April, Larsen said business has stayed steady in the Tennant Station Shopping Center.
“We’re in a good location with lots of traffic,” he said. “We have a better selection, more choices. We offer a wider range of designs, while they are spotty. We have the best products in the area for framing and tons of experience.”
Britton Bonsall, who owns Foot Solutions, also banks on his expertise in niche market for success. As a board certified pedorthist, he said his business is unique in providing special footwear with custom fitting.
“Some are well-served by outlets, but if people have complexities, and if others need more than just saving their money,” Bonsall said, “I’m their guy.”
