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How Walmart is behind a job boom in northwest Arkansas

How Walmart is behind a job boom in northwest Arkansas

Between 2000 and 2010, the population of Centerton, Ark., increased by 433%. The national growth rate over that same period? Just 9.7%.

For a town nestled in a remote corner of Arkansas, over 150 miles from the state’s capital, there can only be one explanation for such exponential growth: jobs. More specifically, jobs linked to Walmart (WMT), the nation’s largest retailer.

In addition to serving as America’s biggest private employer with 2.2 million workers nationwide, Walmart has also created thousands of jobs in the very region where it was founded – northwest Arkansas, an area comprised of several cities, including Bentonville, Fayetteville and Springdale. 

Not surprisingly, Bill Edwards, the mayor of Centerton (which is just a five-minute drive from Bentonville), said that Walmart is well liked in his neck of the woods. Fourteen thousand people work at the company’s Bentonville headquarters, and thousands more have settled in the area to supply products and provide services to the $260 billion company.

There are 52 suppliers with 50 or more employees in the northwest Arkansas region, according to Cameron Smith, president of a recruitment firm for Walmart suppliers, Cameron Smith Associates. Suppliers sell goods directly to Walmart (which subsequently sells them in stores), and range from physical items (like clothes, cleaning supplies, food) to services (like IT support).

There are also hundreds of smaller-scale, local companies that bring the total number of suppliers in the area to 1,400, according to Rob Smith, the communications and policy director of the Northwest Arkansas Council.

And while Walmart doesn't require its suppliers to have a Bentonville outpost, there are definitely advantges to sharing a zipcode with the mega-retailer.

In terms of job numbers, Rob Smith estimated that there are more than 6,000 people working for a Walmart supplier in northwest Arkansas. These jobs are mostly in sales, though HR, legal and marketing positions generally accompany corporate setups. Smith added that his number excludes factory workers and service providers, though those industries have been bolstered by Walmart’s presence in the area as well.

Here’s a breakdown of a few industries that owe their flourishing presence in northwest Arkansas to Walmart:

Food suppliers
More than half of products sold by Walmart are in the food or beverage category. 


This translates to thousands of food supplier-based jobs in the Bentonville area. Major companies like Kraft (KRFT), Tyson (TSN) and Nestle (NESN.VX) all have at least 30 employees working in or around Bentonville.

Tyson, which sells pre-packaged chicken, beef and pork products, employs about 8,500 people in northwest Arkansas, says Dan Fogleman, a company representative. Many are plant-workers (so not included in Rob Smith’s count of 6,000), but there are over 2,000 employees in its Springdale corporate headquarters (about 20 miles from Walmart’s Bentonville offices).

“If you were to pick up Tyson Foods and plop its headquarters down in Phoenix, Denver, or Cleveland, it would immediately be the largest company in any of those cities,” Rob Smith said.  

Consumer products
The second-biggest player in the Walmart supply chain: personal care and cleaning products.

Procter & Gamble (PG), the company behind 23 different personal care brands including Pampers, Crest and Tide, has 220 workers in its Fayetteville office.

Unilever (UL) (Axe, Dove), Kimberly-Clark (KMB) (Kleenex, Huggies, Kotex) SC Johnson (Windex, Pledge, Glade) and Johnson & Johnson (JNJ) (Band Aid, Listerine) have significant operations (at least 50 employees) in northwest Arkansas, all supplying Walmart.

Information technologies
According to Rob Smith, businesses “that don’t put anything on a shelf,” namely IT, have also flourished in the region in recent years. Companies like Tata Consultancy, Cognizant (CTSH), UST Global, CompuCom and Infosys Ltd. (INFY) all have substantially-manned offices in northwest Arkansas to cater to Walmart and its web of suppliers. The companies assist with application development and testing, as well as technical support.

Fashion
No, Arkansas isn’t competing with New York or Milan for  the title of global capital of high fashion, but it does have its own mini-industry. There are around 470 fashion-industry employees working for 65 different apparel suppliers.





And this is despite Walmart’s turbulent decision making in fashion retail over the past few years. 

In 2009, as part of a campaign to offer trendier merchandise, the company moved its apparel office to New York City’s garment district, bringing with them hundreds of Arkansan workers. But after just two years, the company returned focus to selling clothing basics rather than trend pieces. The shift meant Walmart had to move its apparel office again, this time back to Bentonville (and yes, they brought 275 jobs with them).

Love thy neighbor
It seems that Walmart makes a particularly good neighbor, as not every retailer inspires the same level of growth in the local economy. For instance, the Seattle area – home of Costco (COST), Amazon (AMZN) and Nordstrom (JWN) – has nowhere near the local supply chain that Walmart does.


The homes are affordable, industry is growing – maybe northwest Arkansas should adopt Walmart's slogan as its own: save money, live better.