Close to you — reshaping retail business the Wal-Mart way

BENTONVILLE, Ark. — Wal-Mart's town is becoming the new global business address.

Hundreds of name-brand suppliers are opening offices and sending top representatives to the Bentonville area to be near the retail titan and, they hope, get a bigger chunk of sales from the nation's largest vendor of DVDs, books, groceries, toys and a host of other products.

In the process, they are creating a nucleus of corporate America and white-collar life in a corner of Arkansas long known for little more than poultry farms and Civil War history.

They also are reshaping the retail business relationship elsewhere, as companies take away concepts and practices that change how they do business within their own firms and with others.

Just as some locals are bristling at rising property taxes and increased car traffic, some industry experts worry about a power imbalance, with Wal-Mart at the apex. But so far those concerns are doing little to moderate a missionary-like fervor among those absorbing the Wal-Mart way of business.

"This has helped us reinvent our company," said Tom Muccio, president of global customer teams at Procter & Gamble, the first supplier to open an office in the area, in nearby Fayetteville in the late 1980s. Now it has more than 200 people here.

Over the past few years, P&G has established offices near some of its other key retail customers such as Costco Wholesale Corp. It has begun duplicating initiatives created with Wal-Mart, such as shipping display-ready cases to cut down on store labor costs.

Another big presence is Kraft Foods Inc.

The burgeoning vendor community is a testament to the enormous power of Wal-Mart Stores Inc. — which made $244 billion in sales last year — to attract the corporate elite to a region that's still perceived as a backwater.

Levi Strauss & Co., which sells a line of jeans to the discounter, has just set up shop. Walt Disney Co., wanting to bring back the magic of Winnie the Pooh and other characters, doubled its office space this past summer and relocated the head of retail business development from Los Angeles to nearby Rogers.

The notion of suppliers getting close to big-money clients isn't new. Subcontractors long have huddled around aerospace giants like Boeing.

But Wal-Mart's vendor community in northwest Arkansas seems to be taking things to a whole new level. Some worry it has gone too far.