SWARMING INTO HUGE PARKING LOTS AT the foot of the San Gabriel Mountains on a warm autumn afternoon, shoppers eager to snatch up bargains invade two giant shopping centers directly opposite one another on Mt. Vernon Avenue in the smoggy industrial town of Colton. Located just off the San Bernadino Freeway and surrounded by railroad yards, rock-quarry piles and strip mines, the malls are painted in demure pastel tones and capped by tile roofs.
At the Centerpointe Shopping Mall on the west side of the street, a Wal-Mart opened last February as part of a campaign by the nation's largest retailer and most aggressive discounter to saturate California with its red-and-blue-striped gray stores.
Customers headed for the emporium stride by vending machines that dispense Pepsi for 35 cents and Sam's Cola for 20 cents (this day, though, Sam's machine isn't working) and tell me how much they love Wal-Mart's men's leather jackets for $99, Gitano women's pants for $18.96, Jordache women's sneakers for $10.96, Magic Chef microwave ovens for $88--all about half what some department stores charge.
Enthusiastic shoppers sound as if they are auditioning for TV commercials: "I think it's great we have Wal-Mart. Before we didn't have much choice," says Beverly Baker of Grand Terrace. "I love 'em," adds a second woman. "They bring competition to the area, where K mart and Target have dominated." Chimed in a mother of four: "There's a great selection at reasonable prices."
Across Mt. Vernon, K mart, the nation's second-largest retailer and also an aggressive discounter, opened a new outlet--also gray, but with a pink stripe--a year ago, one of 192 K marts in the state. In this fast-growing area near San Bernardino and Riverside, K mart is determined to defend a franchise being challenged by Wal-Mart. And, despite the store's half-empty parking lot, K mart has plenty of supporters. Says shopper Glenda Binkley, who prefers its sparkling red-and-white interior design and emphasis on fashion: "There's a big difference between the new and old K marts."
To cruise through Colton is to see the future of retailing unfold: the merciless juggernaut of discount chains advancing, bulldozing the landscape and threatening to gobble up all but the hardiest competitors. While department stores and Main Street mom-and-pops struggle to hang on to a dwindling band of loyal customers for their apparel, footwear, electronics, hardware, home furnishings, drugs and beauty aids, Wal-Mart, K mart and other discounters--notably the Target chain operated by Dayton Hudson--are expanding to the cheery beep of high-tech scanners checking out an estimated $100 billion in merchandise annually.
Retailing is a rare bright spot on today's economic scene. A surprising spurt in October sales has jump-started retailers' hopes for a merry Christmas recovery after two years of gloomy holidays. Nationwide sales for stores that have been open at least one year--the industry's key barometer of growth--were up about 8% in October from the previous year. Optimists are forecasting a solid gain of 4% to 5% this December over last, though they warn that California and New England won't join the party because they continue to struggle with stalled economies. While discounters are a boon to shoppers wrestling to make ends meet, their growing dominance also has its dark side. Though they create jobs, most are non-union and pay minimum wage. And where they settle, as one grumpy Colton grandmother complains, "There's too much traffic, too much noise, too many stores."
Other critics fret that style and service today take a back seat to price. Says James Slayden, retired president of Robinson's now teaching retailing at the University of Southern California: "I can't believe the great American public will continue in this direction. There've got to be some people who say, 'Hold it! Some things are more important than price.' Women can't go on wearing jeans and copycat suits forever. Someone will want to be distinctive."
Still, discounters are enjoying greater gains than department stores and specialty retailers. K mart registered an 11% increase in total sales during October over the year before, Wal-Mart a 33% surge. With disposable income stuck at 1987 levels, nearly 10% of the state unemployed and few signs of economic recovery discernible in Southern California, consumers are focused on price, price, price.
Even well-off shoppers are seeking bargains. A recent nationwide survey of 450 homes by Chicago market researcher Leo Shapiro & Associates found that one-third of all respondents plan to do their Christmas shopping at discount chains such as Wal-Mart, K mart and regional discount stores--twice the number who said they would buy gifts at department and specialty stores. A new ad campaign by Target features the slogan, "Saving money is now in fashion."
