By Ozzie Jurock
Years ago we used to look at the 'Big Mac Index'. This looked at the price of a Big Mac in different cities and based on what prices were (i.e. $1.50 versus $3...) we could understand the relative strength of the economy in that city. Then we looked at the Costco index. Wherever a Costco store opened ... a good place to buy real estate as that company clearly did its research before opening a store.
Well, now ... it is clearly the Wal-Mart index. Or at least ... follow Wal-Mart when buying real estate.
When Wal-Mart Canada announced it had chosen Duncan for its first Supercentre (Supercentres have approximately 30% more sales floor than traditional Wal-Marts) in British Columbia, it raised some eyebrows and sparked real estate interest in the southern Vancouver Island town. But why Duncan?
"It was both because of a space opportunity and the potential of the area," explained Kevin Groh, a Toronto-based spokesman for the world's largest retail chain. "We look at locations on a macro and micro scale," Groh said.
Groh explained that Wal-Mart does indeed have an extensive research department that zeroes in not only the current trading area of any location, but at the potential of future growth. "Our check list of considerations is substantial," Groh said.
Duncan, with proximity to Victoria and Nanaimo and the growing population base of southern Vancouver Island apparently fit the bill for Wal-Mart, which moved an existing store to a new retail power centre in the town. The store will open by this summer, Groh said.
Groh said Merritt was chosen for a new store in 2006 - not, as some thought (including JREI) because the Wal-Mart family had bought the nearby Douglas Lake Ranch - but because the town of about 5,000 is seen as emerging as a retail and service hub.
So where else is Wal-Mart looking in B.C. and Alberta?
- Recent B.C. openings include Squamish, and the relocation and expansion in Penticton.
- South Surrey: a new Wal-Mart opens later this year.
- Victoria: existing Wal-Mart re-constructed as part of the new Town and Country shopping centre development opens this year.
"We have additional plans for BC, but none have been made public," Groh said.
- Wal-Mart is much more active in Alberta. Last September, Wal-Mart opened five new Wal-Mart Supercentres across Alberta. The Wal-Mart Supercentres are located in Wainwright, Vegreville, Lethbridge, Pincher Creek and West Edmonton.
Major Point - Keep reading the company news. When they open stores you can be sure that research shows it is a growing community ... and you can be sure you have tenants.
Published in the Vancouver Sun, Thursday, March 06, 2008
Ozzie Jurock is a Canadian real estate adviser and author of Forget About Location, Location, Location. He is featured in Donald Trump's latest book, Trump: The Best Real Estate Advice I Ever Received. Your can reach him by email at firstname.lastname@example.org or at www.reag.ca.
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