September 26, 2003
Truly, he's not anti-Wal-Mart
by Debra Gibson
|Extension economist Ken Stone is the national guru on Wal-Mart retail
operations. Photo by Bob Elbert.|
Forget the furor over Ben and Jen's future. The big question burning in
America's minds: Does Ken Stone shop at Wal-Mart?
"Actually, I shop all the time at Wal-Mart," said ISU's professor of
economics and national guru on all things associated with Sam Walton's
brainchild. Or more important, with all things pertaining to how The Big Box
can wreak havoc on Main Street USA.
For more than 20 years, Stone has advised retail communities across the
country (and eventually around the world) on how to survive the Wal-Mart
stores that come to town. He has watched Mom and Pop shops drop faster than
the chain's "always lowest prices" when competition becomes insurmountable.
Iowa State alumni have pleaded with the institution to "call off" Stone's
research when their own vested interests were at stake.
And this guy still shops there?
"Well, it's a one-mile walk from my house, and I can't claim to be an expert
unless I know a lot about Wal-Mart," Stone explained during a recent
interview. "I spend a lot of time walking up and down those aisles, checking
out their prices. But as far as what I actually buy? Just a very few
Since Stone began dissecting Iowa sales tax data nearly 30 years ago as a
new ISU extension economist, he has provided more than the bare necessities
to thousands of hometown retailers.
Shortly after joining the university faculty after stints as an agricultural
engineer and an Army pilot pulling two Vietnam tours, the Illinois native
became fascinated with "this gold mine of information that no one was doing
By massaging this sales tax data, Stone could determine how a community's
sales in areas such as food, general merchandise and apparel compared to
average sales for towns of comparable size.
"This research helps communities find their 'leakages,'" Stone said. "The
numbers provide the impetus to get them going, and to help show them the
right areas from which to be recruiting new businesses."
When Stone first began preparing these analyses in the late 1970s, the
reports were prepared by hand, taking two weeks to complete. Today, every
Iowa community with a population of more than 500 can access this data
online. Over time, many other states have adopted Stone's methodology to
create their own economic reports.
This connection to Iowa retail operations led Stone to begin studying
shopping malls and their effects on Main Street economics, a project which
led to media appearances. By the early 1980s, Iowa Chambers of Commerce were
contacting Stone on a regular basis, all with the same question: What can
you tell us about Wal-Mart?
The "go-to" guy
Helping these communities deal with the arrival of Wal-Mart led to Stone's
1988 report on the chain's impact on local retail, the first such report in
the country, as well as a set of action points on how to compete in this
arena. Within weeks, Stone was featured in major metropolitan newspapers,
which led to more calls for help. By 1993, he was conducting 60 to 70 retail
seminars each year, and was profiled in The New York Times.
"That really opened the floodgates," Stone remembered with a laugh. "I had
agents calling, wanting to manage my career, and all kinds of publishers
wanting me to write books." (Indeed, Stone's book, Competing with the
Retail Giants, was published by John Wiley and Sons in 1995.)
Soon after, the Canadian Broadcasting Co. produced a documentary that
included Stone's research, which expanded his demand to the North. To date,
he has consulted in every state in the United States, every Canadian
province but one, Australia, New Zealand, China, Mexico, Puerto Rico and
But at times, it wasn't only the shop owners who incurred the costs. Stone
openly admits that other professors dismissed his research as too mainstream
and without prestige.
"In the early years especially, many academics looked askance at my work,"
Stone said. "For them, research should only appear in academic journals, and
even then, the quality of the journals was what really mattered. But I
believed that as an extension economist, I had to communicate with lay
people and distill economics in ways they could understand. The best way to
do that was through the media -- that was the most economical and efficient
way of disseminating the information.
"But many academics have said recently that I was prescient in my research
on Wal-Mart, that I was the first to see at that time how Wal-Mart was going
to take over the world. I'm amazed at the number of graduate students and
academics now studying all this today -- I feel somewhat vindicated."
And, once again, in demand. With the surge of Wal-Mart Supercenters
("complete with full-blown grocery stores") now springing up across the
nation, Stone finds himself recruited to counsel a new flock of community
retailers. Stone said his research, conducted in Texas, Mississippi and
Iowa, most likely is the only research in the country that studies the
impact of the supercenters. And his advice to this new wave of retailers is
quite similar to their counterparts a decade or two ago.
"This isn't the end of the world for these communities," Stone counseled.
"Wal-Mart does keep more people at home to shop, and it brings in people
from a greater distance. Other retailers just can't go head to head with
them selling the same thing -- they have to reposition themselves, and find
their own niches. For instance, if your store sells bikes, you can't go up
against their low-end, $38 bikes. But if your shop upgrades to more premium
bicycles and offers repairs and services, you've got something Wal-Mart
can't provide. I tell these merchants all the time to shop Wal-Mart stores
and find their voids, find out whatever they can."
So what exactly does Wal-Mart think of this advice?
"Well, in the beginning, I got lots of calls from Sam Walton's son, Rob, who
was the corporate attorney," Stone said. "They really thought I was out to
get them, but I was only collecting and reporting the facts. Several years
ago, an ISU textiles and clothing class was touring Wal-Mart's Bentonville,
Arkansas, plant and [the late] Sam Walton walked by. When he heard the
students were from Iowa State, he said, 'I know Iowa State. That's where the
professor's at that's giving me all this trouble!'"
But when a Wal-Mart manager covertly taped one of Stone's seminars and
company officials realized Stone wasn't mounting a campaign against the
company, the Big Box left him alone.
"And let's face it," Stone concluded. "There are so many rabid Wal-Mart
haters now, I don't even show up on the radar screen."
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Published by: University Relations,
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