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Red Wing gets boxed in
By Laurel Druley, Minnesota Public Radio
June 20, 2001
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Red Wing merchants got worried on hearing not one, but two chain discount stores were headed their way. Small businesses hope Red Wing's tourist draw will keep them in business. But retail experts say the community might be in for a few downtown casualties.
Pharmacist Marv Dyrstad says he knows many of his Red Wing customers by their first names, which in the end counts for a lot.

THE FACE OF DOWNTOWN RED WING has changed in the last two decades. Specialty shops and service providers replaced the old downtown department stores, but the river town shines with its immaculate restorations, such as the Saint James Hotel and the Sheldon Theater. Today, the town is brimming with hometown pride and bustling with tourists.

But the Minneapolis-based Institute for Local Self Reliance researchers say it may not last. Wal-Mart and Target, known to some as "big-box" retailers, have their sights set on Red Wing.

Pharmacist Marv Dyrstad, owner of Red Wing Corner Drug, is getting ready for his new competitors. He's expanded his hours, added items to his inventory and practiced cautious optimism. "We will keep our chin up. We will try to address the needs and do as good of job as we possibly can," he says. A Red Wing resident for 33 years, Dyrstad hopes his personalized service will keep customers coming back.

"If someone gets sick in the evening after hours, physicians know they can call us and we'll come down and get their prescriptions. We've known these families for many years. We've watched their children grow up. We've watched their parents or relatives pass away," Dyrstad says.

While Dyrstad is taking a wait-and-see attitude, there are worrisome indications as to what might happen. Each year, about 1,000 independently owned pharmacies, like Red Wing's Corner Drug, go out of business in the United States. Most are victims of competition from cheap mail-order prescription services, the big-box retailers, or both.

Red Wing merchants know they compete with the discount stores in as far away as the Twin Cities. It's common to find people like Michelle Cory, a stay-at-home mom in Red Wing, who says she drives to Hastings to shop at Wal-Mart.

"I'm glad they're coming to town. It should bring business to town. I just wish they were downtown. It would keep some shops open downtown," she says.

Down Old Main Street, Red Wing Pottery's Scott Gilmer already knows his niche in the Red Wing market. Target and Wal-Mart don't have hand-thrown pottery in their stores, and he does. He says it's important to be realistic about the arrival of the new stores. "Consumers in our town actually welcome Target coming to town. For retailers to put up a big stink might reflect poorly on ourselves. So many consumers purchase their goods there already, to complain about it really doesn't do you any good. A better approach is to look at it as a reality in our current market place and look at ways to compete," Gilmer says.

Many other Red Wing merchants and residents see the big-box retailer presence as inevitable and don't know what they can do to change it.

Scott Keith makes the traditional Red Wing pottery sold in Scott Gilmer's store. Many tourists come to watch him work.
Stacy Mitchell, the author of Hometown Advantage: How to Defend Your Main Street Against Chain Stores and Why It Matters, says there's a lot they could do. In the last eight years, about 200 communities have fought big-box retail proposals and won. The battle over a proposed Target in Northfield has been going on for three years now.

Target's Northfield opponents say their community will end up losing economically, if the store is built. Mitchell says time and again she's witnessed towns like Northfield and Red Wing lose their local merchants after the big-chain merchandisers move in.

"The first stores to go are those that compete directly and that's the pharmacist. As those first businesses close, you end up with vacancies downtown and other stores lose appeal to consumers. Everyone feels an impact and there's less traffic And I've been in a lot of communities where there's virtually nothing downtown," Mitchell says. But Red Wing city officials say building a Wal-Mart and Target will keep customer dollars close to home.

John Bizio, a Wal-Mart spokesman, says Red Wing consumers currently leave town to shop at Wal-Mart. "The obvious benefits for adding Wal-Mart to a community like Red Wing would be providing a service that customers would like to have, we're also talking about a store that brings to the community hundreds of jobs, brings to the community tax revenues for the local base and state as well," Bizio says.

Critics, such as Mitchell, say the bulk of the retail sales at the discount stores will benefit the town at the expense of the currently existing local businesses.

Red Wing's current business owners hope their tourist appeal will keep drawing people downtown and keep them afloat even as the local consumers head to the big-box retailers.

Tom Withers, who runs a men's clothing store, says if he had to choose, he'd go with the Minnesota company. "I'd like to see Target because I know Target will give back to the community. I understand that Wal-Mart takes care of Wal-Mart. They don't give back much to the community," he says. In recent years Wal-Mart has donated more to local causes. But Mitchell says it's important to keep the charity giving in perspective. She says one must compare the amount of giving with net profits.

Some local retailers are unhappy because Target is asking for city money, specifically assistance through tax-increment financing, to fund a building. Which will undermine their businesses by taking away their customers.

Pharmacist Marv Dyrstad says he knows many of his Red Wing customers by their first names, which in the end counts for a lot. "One of the unwritten things people appreciate is running into friends and neighbors shopping in the downtown area. Traditionally when stores like this come in communities tend to lose community comradeship," he says. Target executives are considering a development agreement with the City of Red Wing and will take its decision to next City Council meeting scheduled for June 25th. Wal-Mart has until next month to get back to the city on its preliminary plans. Wal-Mart and Target are in the process of buying the land for development but both still have complications to iron out. Both projects are set to begin construction this fall, and open in 2002.