Wal-Mart and Newspapers: Publishers Continue to Debate the Impact of the Discount Store Giant on Newspaper Advertising

By McBride, Sarah | Editor & Publisher, November 20, 1993 | Go to article overview

Wal-Mart and Newspapers: Publishers Continue to Debate the Impact of the Discount Store Giant on Newspaper Advertising


McBride, Sarah, Editor & Publisher


Publishers continue to debate the impact of the discount store giant on newspaper advertising

WALTER HUSSMAN JR., publisher and editor of the Arkansas Democrat-Gazette, Little Rock, thinks that large discount stores, especially Wal-Mart, have had an adverse effect on news-papers in small towns.

Joe Sink, publisher of the Dispatch, Lexington, N.C., believes that Wal-Mart has been a definite bonanza for his business.

Which is it? Speakers at a recent meeting of the Board of Visitors of the University of North Carolina's School of Journalism and Mass Communication tried to answer that question. The theme of the conference, which also observed the university's bicentennial, was "Megastores: Threat or Bonanza for Small Town Newspapers?"

As the keynoter, Hussman zeroed in on the stores' major effect on news-papers: advertising dollars. Uisng the example of Camden. Ark., where he publishes the Camden News, Hussman outlined a series of events that he considers typical after Wal-Mart arrives in a town: a boom-bust cycle resulting in lower advertising revenue.

Camden, with 15,000 people, had one discount store that regularly would place 15 pages of ads a month in the News. When a competing discount store came to town in 1972, advetising from both stores went up to a totla of 40 pages a month. After Wal--Mart arrived in 1977, advertising from all three went up to a total of 75 pages a month.

The other tow stores went out of business in 1986 and 1987, and WalMart dropped its ads from 25 pages to 15, then to 12, 10 and finally eight. Although Hussman greatly admired the late Sam Walton and the phenomenal success of the chain that he founded, Hussman said the store has hurt ad sales in Camden.

"Our best year was eight years ago, and we'll never have that kind of business again," he noted.

Sink's views contrasted sharply.

"In their first three years in Lexington, they spent $102,000 in advertising," he said, adding that Wal-Mart attracted othere businesses, such as a clothing store and a gorcery.

"All those stores' advertising dollars have continued to add 30% to the bottom line," he said.

But, he admitted, Wal-Mart's advertising in his newspaper has declined.

Tom Stulz, vice president of marketing at Multimedia Inc., said WalMart's advertising budget probably was just 20% of that of other discount stores. In some areas, he said, Wal-Mart uses direct-mail ads only.

Reversing declines in advertising dollars

Stultz outlined a five-point strategy to go after declining ad dollars. First and most important, he said, newspapers must adopt a consultative approach.

Multimedia, which owns 11 daily newspapers, helps advertisers identify and foster the strengths of their businesses so they fill a niche in which the megastore cannot compete. …

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