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Wal-Mart Tweaks Store for Arab-Americans: Does Homework to Lure Middle Eastern Shoppers in Detroit Area

posted on: Mar 15, 2008

Faten Saad knew she wasn’t in a typical Wal-Mart when she saw an end-of-the-aisle display featuring Mamool.

Boxes of the date-filled, whole wheat cookie from the Middle East welcomed the 21-year-old Lebanon native into the international aisle of the new Wal-Mart store in this Detroit suburb known as the capital of Arab America. Aisle 3, which also features Eastern European and Hispanic food, represents many of the 550 items geared toward Arab-American shoppers in the store that opened last week.

It might be statistically tiny in a store with more than 150,000 items, but it’s symbolically huge for the world’s largest retailer as it seeks to change from a cost-is-everything monolith to one that customizes its stores to meet neighborhood needs.

Managers say they seek peace with the neighborhood’s merchants — and vow not to undercut them on Middle Eastern specialties. But some experts and observers say Wal-Mart’s well-planned launch in Dearborn is bound to shake up the buying and selling in a community that has long supported its own. Southeastern Michigan is home to an estimated 300,000 people who trace their roots to the Middle East.

“I have not heard of anything this tailored. It’s inspiring to me as a shareholder,” said Patricia Edwards, portfolio manager and retail analyst in the Seattle office of San Francisco-based investment manager Wentworth, Hauser & Violich, which has 537,000 shares of Wal-Mart Stores Inc. stock.

The Dearborn store also sells Arabic music and plans to offer Muslim greeting cards. But the modifications go beyond merchandise: It has 35 employees who speak Arabic — noted in Arabic script on their badges. The store also has hired a local Arab-American educator to teach the staff cultural sensitivity.

It’s clear as soon as shoppers walk in that this isn’t a typical Wal-Mart. Inside the grocery entrance are 22 produce tables filled with squash, beans and cucumbers common in Middle Eastern dishes. The section also features grains and vegetables popular among blacks and Hispanics, two other demographics with sizable populations living nearby.

“It’s like a farmers’ market,” said Bill Bartell, the store manager who developed the international aisle with Tut’s International Export & Import Co., the Dearborn-based distributor that handles the sourcing for many of the store’s Middle-Eastern items.

“Because we did all this due diligence prior to moving into this area, we came to realize our clients really kind of liked this atmosphere, and they liked the variety that we can give them.”

More than a year of studying the market and meeting with community groups was put to the test last fall, when Bartell and a Tut’s executive began to work on what would become aisle 3. They set up an 80-foot-long counter in an empty warehouse and hauled out products — date-filled cookies, grape leaves, vacuum-packed olives, chick peas and a 97-ounce jar of olive oil imported from the Middle East. The men spent two weeks working on a way to present a new line of products.

As he recalled their effort, a few women in hijabs — traditional Muslim head scarves — inspected produce. One spoke in Arabic to Mohamad Atwi, the developmental store manager.

Bartell said the store aims to offer convenience — not a comprehensive selection of specialty products.

“It’s very important that we have the variety of the Muslim, Hispanic items, local items, at a comparable price,” he said. “If you go over to Warren (Avenue) where there’s other … small retailers, they have a variety that goes on and on and on.”

At the Super Greenland Market, which Wal-Mart studied to come up with its new store, customers can find one whole side of an aisle with more than 20 different varieties of chick peas and fava beans.

“We have vendors that extend from here to the end of the planet,” said Jamal Koussan, owner of Super Greenland. “We import directly. That puts us at a big advantage.”

He said Wal-Mart doesn’t concern him, but he is watching it. He tracked his store’s sales on Wal-Mart’s opening day and saw no dip.

“I’m not saying they will have no effect on our business but nothing that will threaten us, that will threaten our existence or threaten our bottom line,” he said.

Still, the lure of everything under one roof could prove stronger than product depth for some who frequent Middle Eastern shops.

Saad, the college student who emigrated from Lebanon in 1990, marveled while shopping at Wal-Mart and plans to return.

“I don’t think I would come all the way here just to get those things, but I’d pick them up on the way if I was already here doing my shopping,” she said.

Warren David, a public relations and marketing specialist focusing on Arab-American and Islamic markets, called Wal-Mart’s arrival bittersweet. He’s happy for the steps it’s taken, but “at the same time I can’t help but think it’s going to have some kind of impact on the local business community.”

The Dearborn Wal-Mart is part of a two-year-old corporate effort to help sales by tailoring stores to local demographics, said spokeswoman Amy Wyatt-Moore at Wal-Mart’s Bentonville, Ark., headquarters. It targeted six groups: Hispanics, blacks, empty-nesters/boomers, affluent, suburban and rural shoppers.

Dearborn’s store is designed to reflect its neighborhood, not serve as a national template for Arab-American shoppers, she said.

“We realize there are more than those six broad demographic groups around the country. In some places the result will be a unique store,” Wyatt-Moore said.

Edwards, the analyst, says the Dearborn store is a good move for a company that historically has been better at the science, rather than the art, of retail.

“Wal-Mart is a little kinder and gentler than they were 10 years ago. They are fierce competitors … but I don’t think they’re trying to do a scorched earth policy,” she said.

“The trick for these local merchants is … they’re going to have to change how they operate in the face of this changing competition.”

By Jeff Karoub, AP Business Writer
AP Business Writer Marcus Kabel in Bentonville, Ark., contributed to this report.