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2008-04-23
Penitas, TX. Wal-Mart Halts Construction To Reformat Store For Mexican Immigrants?

There is more than meets the eye in this strange story of a halted Wal-Mart construction project five miles from the Mexican border. The tiny "city" of Penitas, Texas has only 1,200 people. It also has 7 Wal-Mart supercenters within 20 miles, including a superstore 8 miles away in Palmhurst, and 10 miles away in Mission, Texas. The idea of another Wal-Mart supercenter for this trade area is, as the locals might say, loco. So it's somewhat suspicious that Wal-Mart -- right in the middle of building its new supercenter in Penitas -- stopped work. The Monitor newspaper called it a '"halt in construction... only months from completion." Wal-Mart officials would not comment on the abrupt stoppage, but city leaders came up with a truly unique rationale for the frozen project: Wal-Mart wants to make its store more Hispanic. The rumors started that Wal-Mart suddenly decided that it wanted to make a store that was "more locally focused." That means more Mexican products to appeal to the large immigrant population in Hidalgo County. A former Mayor of Penitas told the newspaper, "If you look at the people here, they're going back over there (to Mexico) to buy products that they were raised with, Wal-Mart decided that they were going to do a new product mix, floor plan and make it directed towards Mexican clients." The result is that a store which was slated to open this summer, now may not open until 2009, said Mayor Pro-Tem Marcos Ochoa. The City Manager admitted that the city doesn't have a clue about what's happening, because the builders have not spoken to the city about their plans. The Mayor Pro Tem said he was unofficially told that Wal-Mart was taking a break in order to "reformat" the store. The real estate agent who made the land sale to Wal-Mart, told the media that Wal-Mart was "excited about the new concept for the store." "They have been experimenting with new formats and they have chosen a new format for this store," said broker John Womack. "We're excited that it's going to allow us to be distinguished from other stores in the region." City officials say they were not counting on sales taxes from the superstore in this year's budget, so a delay will not hurt the small community financially. But some people in the city worry that Wal-Mart may be backing out of the project, because other developers have pulled out over water issues. The regional water utility, La Joya Water Supply, is currently under receivership since 2005. The uncertainty of not having a reliable water supply could be part of the reason Wal-Mart got cold feet in this hot Texas community. Womack was unable to explain the delay other than his "reformatting" story. "If there was a delay," he said, "it was not on the city of Peņitas' part." Fortunately, people in Penitas don't seem to know that Wal-Mart has cancelled or delayed 50 Wal-Mart projects since last June. It may not be Mexican shoppers that put this project on ice -- but Wal-Mart's slow down in new store growth -- that's the real reason behind the shut down.

What you can do: This is truly a strange story in Penitas. Why would Wal-Mart stop work on a store because of a change in the nature of the product mix it will sell? What is a "local floor plan?" The idea seems so far-fetched, that no local official could buy that line. More likely, this was all the company could come up with for a story line, without making local officials realize that Wal-Mart is intentionally slowing down its store production. This trade area is clearly saturated, with 7 superstores within a short drive. There is no population in Penitas to support this superstore, and all around Penitas are more Wal-Mart superstores -- which they will not shut down. Wal-Mart is reviewing all its current stores, and delaying many of them. Wal-Mart may have been eager to steal sales from the H.E.B. grocery stores in the area, but then realized how over-stored this small trade areas has become. The product line switch just is not credible, and the fact that Wal-Mart would not talk to the local media was another bad sign. Penitas is known as "the oldest town in Texas," but seems to have fallen for one of the oldest tricks in the book. Readers are urged to call Penitas Mayor Servando Ramirez, at (956)581-3345 with this message: "Mayor Servando, Don't you get suspicious when other people start telling you that Wal-Mart has stopped work so it can change the kind of product mix it will carry, to make the store more appealing to Mexicans? Why isn't Wal-Mart talking? Did you know that Wal-Mart has cancelled or delayed 50 superstore projects since last June? It's just not credible that a format change has caused them to stop work on the store. It's painfully obvious that tiny Penitas does not need another Wal-Mart supercenter. You are already saturated with them. It would be good news for Penitas if Wal-Mart abandons this project completely. But make them be honest about the real reason why no work is being done on that store."










 
 
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