The Friday Wire: Size matters and a gubernatorial dead heat

Notes about the importance of size, a real-world example of how Obamacare halted a business expansion and the push to sustain sustainability are part of the Northwest Arkansas Friday Wire for Feb. 21.

NOTES & ANALYSIS
• Size matters
We learned this week that the top bosses at Wal-Mart Stores are going to double the number of small format stores they build in fiscal 2014 compared to their previous construction plans.

Why? Because one size does not fit all. If you are on a tight budget and want to stock up for the week or the month and have the time to spend 90 minutes or more wandering from car batteries to peppered bacon to Covergirl blush, then the supercenter is the place to stop.

But if you’re leaving work, in a hurry to get home and just need a gallon of milk and a box of Cocoa Puffs for that guilty-pleasure breakfast you’ve been promising yourself, then that Dollar General or Harp’s or other smaller retail outlet is likely your stop. Ain’t nobody got time to walk a country mile for a dose of dairy and box full of sugary, chocolatey heaven.

How do we know that size matters, but that one size does not fit all? Comparable sales for Wal-Mart’s Neighborhood Market stores (smaller format) were up 4% in the most recent fiscal year. Comp sales at the larger stores were down 0.4% during the same time period. 

Where would you invest more capital? Exactly.

ICYMI
Following are a few stories posted this week on The City Wire that we hope you didn’t miss. But in case you missed it …

• Sustaining sustainability
In his first public forum as CEO of Wal-Mart Stores Inc. Doug McMillon challenged employees and suppliers to innovate, saying he would push the envelope in testing these new ideas that will drive the retailer’s future growth.

• Negative pressures at Car-Mart
A recovering economy, more lenders in the subprime auto space and higher charge-offs have thrown a monkey wrench into the operations of America’s Car-Mart, a large buy here, pay here auto dealer.

• Real estate market share growth
It’s been six years since Harold Crye, CEO of Crye-Leike Real Estate, expanded the company’s footprint into Northwest Arkansas. He said the local business has grown sales each year from $76 million in 2007 to $385 million last year. Crye-Leike had a 35% share of total units sales last year, with 2,659 properties.

NUMBERS ON THE WIRE
5.7%: Decline in net income for Wal-Mart Stores Inc. between fiscal year 2014 and fiscal year 2013.

42%: Level of support among likely voters for both Mike Ross, the Democrat candidate for Arkansas Governor, and Asa Hutchinson, the Republican candidate for Arkansas Governor. The poll was conducted by Little Rock-based Impact Management Group.

393: Number of homes sold during January in Benton and Washington counties, down slightly from the 395 in January 2013.

OUTSIDE THE WIRE
• Democrats compare Walker investigation to Christie
For more than three years Wisconsin Gov. Scott Walker avoided political fallout from a criminal investigation that ensnared six of his former aides and associates, winning a recall election even as his opponent ran ads attacking him on the scandal. But with the Republican up for re-election this year and considering a run for president in 2016, questions are intensifying over how much he knew about illegal campaign activity going on in his county executive office as he launched his bid for governor.

• Governors pitching for jobs
As the U.S. economy gains strength and states are in their best financial position in years, governors are proposing unconventional tactics to create jobs, especially in health care and high-tech.

• Keystone ruling favors Obama politically
A Nebraska judge's ruling on the Keystone XL pipeline could let President Barack Obama delay his final decision on the project until after mid-term elections and avoid political damage, analysts say.

WORD ON THE WIRE
"We've done quite a lot of that. We've been consistently independent in our vote choices since that time (1968), so we're very comfortable and we were doing this before the rest of the country. We are very comfortable voting Republican at the top of the ticket and still pretty comfortable identifying as Democratic and voting Democratic on other positions."
– Dr. Janine Parry, director of the Arkansas Poll, discussing the split among voters self-identified as Democratic but saying they will vote Republican in a poll released this week by Impact Management Group

“We would’ve probably already been open in Little Rock with a third store if this whole health care thing wouldn’t have taken place. But it scared the heck out of us.”
– Joe Donaldson, co-owner and general manager of Sam’s Furniture in Springdale, about the company pulling back expansion plans because of uncertainty surrounding the federal health care law