Small businesses in Altadena say they can't compete with new Walmart's prices (Photos, chart)

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Outside this worn stretch on a busy roadway in Altadena, the owner of a small beauty supply shop, an elderly Korean immigrant, ventured into the heart of her greatest rival — the new Walmart Neighborhood Market.

Min Cha Park, who runs Toto Beauty Supply on Lincoln Boulevard, was visiting to see how much the competition had her beat. 

"I can't fight with them," Park said. "You know, they are very low price… Maybe I just give up whatever they sell."

Before Wal-Mart opened up a compact neighborhood market on the corner of Lincoln and Figueroa - inside an old thrift store that sat vacant for five years - both the retail giant and some of its neighbors were hopeful that, contrary to assumptions, the new store would attract new customers that would rediscover this long-depressed section of town.

But so far, the crowds of shoppers are only streaming to one store -- Walmart. They're packing the beige-painted market, happily attracted to its shiny new floors, cheerful employees and rows of name-brand goods.

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Three blocks away, Poncitlan Meat Market was virtually deserted. After it opened in 1992, it had long been the neighborhood's only grocery store, said owner Leticia Vega, and customers would beg her to let them in past her closing time of 9 p.m. so they could pick up eggs or milk.

But now, on a recent weekday, the milk on the market's shelves were untouched and expired. Vega was reluctant to order more. Already, she shut down her meat counter, and is thinning out the variety of vegetables she sells.

It's hard to compete, she said, with the Walmart nearby and independent grocery chain Super King across the street. 

"I'm out of my league," Vega said. 

A retail consultant gave Poncitlan a 50 percent chance of surviving by next year. Small businesses near a new Walmart have closed in as little as six months after the retail giant moves in, said Burt Flickinger III, managing director of retail consulting firm Strategic Resource Group. 

“The employees lose their jobs and often times the small business owner has a second mortgage on their house and it can wipe out the entire life savings of the independent business owner/operator,” Flickinger said.

For Poncitlan Meat Market, the chances of it surviving beyond 2014 get worse — falling to 30 percent, then 15 percent a year later, Flickinger said. 

"That's generous," market owner Vega said. 

Her anxiety was shared by her neighbors who have long served this neighborhood. Cars from the wealthier part of Altadena - in the foothills - roar along this busy street, past the small shops selling piñatas, CDs and 24 ounce beer bottles, on their way to Pasadena and the 210 freeway. At the nearby liquor store, beer, chips and cigarettes seemed to be popular sale items on a recent Sunday, while the selection of chicken broth was in short supply. 

Inside the Walmart, some of the customers walking into the new market were excited to see the large selection of fresh produce, meats and household supplies.

Walmart Product Toto Beauty
Supply
$3.48 Hair Gel $3.99
$7.27 Hair polish $8.49

Prices surveyed between March 15 and March 20.

“The prices here are a lot lower than the normal store,” said Ray Charles, a manager at a car rental business who lives in Altadena and used to shop at Ralphs, Vows and Super King. “They have plenty of what you need here, which is good.”

He marveled at yogurt that was 39 cents less at Walmart and a package of ground turkey that was about $3.50 less.

“I’ve already switched,” Charles said.

Duston Gottlieb stopped shopping at the Ralphs in La Canada Flintridge after he saw the low prices at the new Walmart. 

"Diapers are a big thing at my house," Gottlieb said. "If I can save 50 cents here or there, why not?"

When Walmart opened March 1, some businesses hoped for the best — that the store's arrival would attract more foot traffic to the area and encourage the arrival of more shoppers for everyone. 

Juan Gonzalez said his family put up a cluster of balloons in hues of red, purple and orange in front of their clothing and jewelry store, Betty’s Boutique, for Walmart's opening day. 

“Everybody put up balloons to say, we’re right here too," Gonzalez said. 

But he gained only two new customers. 

Other stores are more desperate.  Spin-Off Music was already hurting before the Walmart opened. Manager Kevin Harris said he needs some more of the new Walmart customers to enter his store if his business is to survive -- it needs 30 percent more in sales each month to keep its doors open.

Walmart store manager Jennifer Gonzales said her employees have purchased food at the nearby businesses and she thinks the Neighborhood Market complements the area's stores. The store hired 65 workers for the Altadena Neighborhood Market, with 40 percent of workers from Altadena.

"Walking up this area and looking the stores up and down the street right here, we don't sell a lot of those items so I think it's bringing a lot of foot traffic to this community," Gonzales said.

Jim's Burgers has seen new faces, but the business hasn't seen a considerable jump in sales from new Walmart customers coming from the suburbs of La Canada Flintridge and La Crescenta, said owner Amir Siddiqi.

"We are already seeing a difference in the amount of traffic going past our restaurant, so I'm sure in the future we will see a difference," Siddiqi said.

Retail consultant Flickinger said the small businesses would have to change to survive.

He said they should focus on selling what Walmart does not sell, and focus on "local, unique and fresh products" to "potentially have a fighting chance for the store's survival," Flickinger said. 

But even focusing on local products may not be a surefire path to success.

Webster's Fine Stationers sells many items made by people who live in Altadena, like cards, art and children's books. Yet, co-owner Lori Webster has seen a 20 percent decline in sales since the Walmart opening. 

Webster said she opposed Wal-Mart's entry into her neighborhood.  She urged residents to support local businesses, where she says money will remain to benefit the community. Webster is a member of two anti-Wal-Mart groups, Save Altadena and Neighbors Building a Better Altadena.

“We use local printers.  We use local graphic designers. Wal-Mart isn’t going to do that,” Webster said. 

Wal-Mart said it hired an Altadena photographer and worked with Pasadena vendors for its grand opening.

For her part, Vega, owner of the Poncitlan Meat Market, is looking at refocusing her market on selling fresh burritos and tacos.

"I'm not going to sink without a fight," Vega said. 

Park, of the beauty supply store, said she was considering not selling the 20 or so products in her store that are also for sale at Walmart. She said she can't match Walmart's prices because she can't buy in bulk. She's clinging to the hope that Walmart will drive new customers into her business.

Her concern was evident on a recent afternoon, when Park tried to convince a customer to use a debit card instead of a credit card. 

“The banks, they charge me more when you use credit,” Park pleaded.

“But I get a break when I use credit,” the customer replied.

It was another battle lost, in bid to earn a few more cents on the purchase. For each swipe of a debit or credit card, Park pays about 74 cents. She pays even more if too many customers swipe credit cards, she added. 

“People, they don’t know,” Park said.

While the new Walmart Neighborhood Market in Altadena is driving new customers into the neighborhood, so far, it appears the big winner is ... Wal-Mart and the customers seeking out lower prices. 

For the smaller businesses nearby, many already struggling before the new store arrived, it's another challenge to their economic survival. 

Walmart Product Super King
$2.28 Cheddar cheese (8 oz.) $2.89
$1.84 (12) Eggs $3.69 (20)
$1.92 Flour $1.50
$2.98 Milk $3.49
$.64 (56 sheets) Paper Towels $.79 (60 sheets)
$11.97 Tide laundry detergent
with Downy (100 oz.)
$14.99
$1.54 (12.8 oz.) Tortillas $1.39 (11 oz.)
$1.18 Wheat bread $1.89
$24.35 TOTAL $30.63

Prices surveyed between March 15 and March 20.

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