Convenience chain Kum & Go is opening its first compressed natural gas (CNG) fueling station in Springdale. This will be the first CNG station open to the public in Northwest Arkansas and one of 1,540 CNG fueling stations across the country.

The CNG station will be located at 1220 E. Robinson Ave., Springdale, and is an addition to the Kum & Go convenience store already operating at that location. An open house event is slated for June 4.

CNG is an alternative to gasoline that's made by compressing natural gas to less than 1% of its volume at standard atmospheric pressure. Consisting mostly of methane, CNG is odorless, colorless and tasteless. In addition, CNG costs about 50% less than gasoline or diesel and emits up to 90% fewer emissions than gasoline.

When Kum & Go first announced plans for the CNG station last year, the Springdale Sewer and Water Commission decided to purchase two vehicles that run on CNG for its fleet in hopes to save money on fuel costs.

“That demonstrates our enthusiasm for CNG and wanting Springdale Water to be at the forefront. I think the possibilities are great and others will follow our lead,” said Springdale Water Utility Executive Director Heath Ward.

“Kum & Go has a proud tradition of being an industry leader in sustainable practices,” said Kyle Krause, CEO of Kum & Go. “By providing CNG to our Northwest Arkansas communities, we are not only filling a need for our customers, we’re also staying true to our commitment to operating our business with a focus on being environmentally-friendly.”

Strokes and lung cancer are what caused USA Truck CEO John Simone to in early April take an indefinite leave of absence, according to a statement issued Thursday (May 7) by the Van Buren-based trucking and logistics company.

When Simone’s leave was announced, the company cited a “serious medical condition” as the reason. Tom Glaser was appointed interim chief operations officer to lead the company. Glaser is a member of the USA Truck Board and served as the company’s COO from January 2013 to June 2013. He returned to the company as a Board member as part of an early 2014 agreement between USA Truck and investment firms Baker Street Capital and Stone House Capital Management.

Simone, 53, was hired by USA Truck Board Chairman Robert Peiser in early 2013, and was instrumental in returning the long-haul carrier and logistics company to profitability. The company reported Feb. 11 that 2014 net income was $6.033 million, a more than $15 million swing from the $9.11 million loss in 2014. The swing ended five consecutive years of losses.

The company is off to a good start in 2015. First quarter net income for Van Buren-based USA Truck was $1.116 million, a big improvement over the $1.589 million loss in the first quarter of 2014, and the 10th consecutive quarter in which the once-troubled trucking firm improved its financial performance.

In Thursday’s statement, Simone said the lung cancer was discovered while searching for the cause of strokes, or “cerebral vascular accidents.”

“While looking for the cause of the CVAs, they discovered lung cancer, which is very rare in non-smokers. I have been undergoing chemotherapy, and radiation treatments are planned in the future,” Simone said in his statement (See the full statement below.) “The treatments are expected to continue for several more weeks. It is too early to have complete visibility on timeframe for completing treatments or a definitive prognosis, but my doctors and I are optimistic.”

COMPLETE STATEMENT FROM USA TRUCK CEO JOHN SIMONE
Dear Colleagues and Fellow Stockholders:

I wanted to update you personally on the status of my medical leave and the timing of my expected return. Although my communication with you has been limited for several weeks, please know that USA Truck, and all of you, have been in my thoughts as I have concentrated on my treatments and recovery.

During March, I experienced cerebral vascular accidents (CVAs), or strokes, which primarily affected my speech (much improved since then). My doctors have not identified any other lasting effects, and they expect me to make a full recovery from the CVAs.

While looking for the cause of the CVAs, they discovered lung cancer, which is very rare in non-smokers. I have been undergoing chemotherapy, and radiation treatments are planned in the future. The treatments are expected to continue for several more weeks. It is too early to have complete visibility on timeframe for completing treatments or a definitive prognosis, but my doctors and I are optimistic.

Needless to say, this dual challenge multiplied the number of tests, appointments, and treatments to the point a medical leave became necessary. The warm wishes and messages from many of you were much appreciated and are helping keep up my spirits along the way.

Several weeks into the treatments, I am feeling much better. My strength is returning, my speech is improving, and I am looking forward to returning to active involvement in the business. My doctors have not finalized their recommendations on my ability to travel or return to USA Truck in a full time capacity. I intend to return as soon as medically advisable, and I am hoping that will be sometime this summer.

I would like to thank my colleagues at USA Truck for their support of me, but even more for their continued efforts on behalf of the company. The depth and breadth of our team has never been greater, and this has been clearly displayed over these past several weeks. I am grateful and humbled, but not surprised, by their dedication and performance.

Sincerely,

John M. Simone

Dr. Altagrace Hanley, a board certified pain medicine physician, recently joined the medical staff of Northwest Health System. She is practicing at Northwest Sports, Spine and Physical Medicine, 601 W. Maple Ave., Suite 401 in Springdale.


“We are pleased that Dr. Hanley is bringing her medical expertise to our organization,” said Sharif Omar, CEO of Northwest Health System. “We are committed to providing the community of Northwest Arkansas access to quality healthcare which includes providers in key specialty areas.”

Hanley received her medical degree at University of Illinois College of Medicine in Chicago. She completed a general surgery internship at Bronx Lebanon Hospital Center in Bronx, N.Y. She then completed her physical medicine and rehabilitation residency and a fellowship in pain medicine at Mayo Clinic College of Medicine in Rochester, Minn.

Some suppliers for Sam’s Club now have told retail consultants they are being charged for a “Tech Experts” help line launched by Sam’s Club in April of last year. A major complaint is that the suppliers were not consulted before the charge was deducted.

There is no shortage of so-called experts available to help consumers with tech-related issues on their iPhones, televisions, or other electronic gadgets sold at U.S. retailers. The post-purchase layer of service is drawing attention from suppliers, consumers and retail insiders. A Google search for reviews on these help lines brings up thousands of complaints compared to a smattering of satisfied consumers.

Electronics product suppliers recently began being charged by Sam’s Club, noting “Tech Expert” support costs, according to at least two local supplier consultants speaking to The City Wire on condition of anonymity.

Sam’s Club spokeswoman Tara Raddohl said the retailer does not discuss who is covering the cost of the free support, but did say there is no charge for members who purchase electronics at Sam’s Club.

The tech expert help line is provided by Irvine, Calif.,-based Alorica, which works in sync with SquareTrade the seller of the extended warranties, which are sold by the retailer and paid for by consumers.

Sam’s Club may have followed the lead of its largest competitor, Costco, who has offered a version of tech support for at least eight years. Alorica also handles calls for the Costco Concierge tech support line.

The margin structure at wholesale clubs is much slimmer than traditional retail suppliers in order to offer value pricing that justifies the annual membership costs. Analysts are not surprised to see wholesale clubs offer the “free” tech support line which in one way differentiates them from other competitors.

A similar service is available at Walmart.com, but consumers are asked to bear the costs. A one-time tech support session costs $79, while a one-year subscription is $129. Wal-Mart’s tech support is provided by Asurion, who also services the extended warranty programs sold by the retailer at the time of purchase. Likewise, consumers don’t expect the Geek Squad at Best Buy to work for free, which raises the question of who should be paying for the service.

“I understand why a retailer would want to differentiate themselves, or keep up with competitors, by offering ‘free’ tech service. The challenge of course is if it’s the supplier paying for the service they will eventually need to recoup that cost which will likely lead to higher retail prices or lower quality thereby negating the retailers competitive advantage in the long run,” said Jason Long, CEO of Shift Marketing Group.

Carol Spieckerman, CEO of newmarketbuilders in Bentonville, said tech support is becoming a world of overlapping and in some cases duplicative solutions, just as warranties have been for quite some time. She said all major technology companies offer some form of tech support; however, not all customers feel comfortable accessing it.

“Consumers can be more open to personally-delivered service pitches that are offered at the point-of-sale, even though some or all of the solutions provided may already be covered by the supplier,” Spieckerman said.

“Suppliers need to do a better job of getting credit for the tech support they already provide, and making tech-challenged customers comfortable accessing it, particularly since it is factored into pricing anyway,” she added.

Under the present system, Spieckerman said third-party service providers are banking on the fact that the majority of customers who sign up for their services aren’t digital natives.

“Their customers are stepping into new technologies with trepidation and therefore, the tech support solutions provided can be fairly rudimentary and predictable. Predictability and scalability are key for these models. Few of the budget services are geared toward hard-core techies or customers who are buying complex, connected solutions,” she said.


Ron Johnson, former CEO of J.C. Penney and and former Apple executive, has delved into this space with his new venture Enjoy. Johnson’s Enjoy venture is a warehouse business that sells tech products, delivers them free to your home and will help you set them up and learn how to use them. He told USA Today that Enjoy could be next paradigm shift in shopping. 

“I like what I’ve seen so far from Enjoy. It’s a slow rollout and won’t touch most consumers for awhile. Their selection leans toward more specialty which is a good approach,” Long said.

“Most consumers have purchased an electronics product that has them saying ‘now what’ when they open the box so this is a great way to address that problem.” Long added.

Long said Johnson’s idea opens up for supplier an entirely new market of consumers — those who wouldn’t buy a product because they didn’t want to deal with the struggle of setting it up.

Spieckerman agreed that Johnson’s new venture steps out a bit further.

“In order to be profitable, Enjoy would also seem to rely on fairly predictable service scenarios that are limited by the brand relationships it has forged,” she said.

She believes Enjoy is setting the stage for what must come next, “service providers that possess deep and brand-agnostic knowledge of connected devices, smart home solutions and particularly, multi-brand solution scenarios.

“Third party providers that can incorporate these criteria will be a world apart from the “cheap and deep” crowd,” Spieckerman said.
 
She adds that retailers can get in on the game by building out “good, better, best” service offerings rather than racing to the bottom on price and relying too heavily on predictability.

Walmart Canada said it will acquire about 3 million square feet of retail and warehouse distribution space from Target, who pulled out of the country last year. Wal-Mart Stores expects to invest approximately $289 million procuring and renovating 13 former Target properties, according to the release.

Specifically, Walmart Canada has reached agreements to acquire one distribution center, 12 store leases and one owned property formerly held by Target Canada, for approximately $136.5 million. The transactions are subject to the approval of the court in accordance with Target Canada's Companies' Creditors Arrangement Act proceedings and certain other customary conditions.

Wal-Mart expects to invest $153.1 million to renovate the 13 stores and distribution center. Work on all locations is expected to start within the next few months subject to all necessary approvals.

"Walmart is committed to the Canadian market, and this agreement helps us accelerate our growth plans ensuring more Canadians have access to our low prices," said Dirk Van den Berghe, president and CEO of Walmart Canada. "The 13 stores acquired are well situated, and we are excited to bring Walmart's successful supercenter offer to customers in these markets. We have served millions of loyal customers, and look forward to continuing to serve them through our stores and growing e-commerce business."

The new stores and distribution center will generate approximately 2,400 jobs in stores, 1,000 jobs in the distribution center and 1,500 construction jobs.

This acquisition is in addition to 29 supercenter projects Walmart Canada announced on February 11 at a cost of $281 million which will also address e-commerce fulfillment capabilities.

Newly acquired locations include:
• British Columbia
Scottsdale Mall, Delta
Coquitlam Center, Colquitlam
Surrey Place/Central City, Surrey
Haney Place Mall, Maple Ridge

• Manitoba
Southdale Center, Winnipeg

• Ontario
Guelph, Guelph
Bayshore Shopping Center, Ottawa
Billings Bridge Plaza, Ottawa
Pen Center, St. Catherines

• Quebec
Candiac Power Center, Candiac
Terrarium Shopping Center, Pointe Claire
Galeries Chagnon, Levis
Place Fleur De Lys, Quebec City
Distribution Center, Cornwall

University of Arkansas at Fort Smith student Casey Millspaugh’s life was changed by a business card.
 
Millspaugh was a senior business student at UAFS when Bill Hanna, president of Hanna Oil and Gas, visited one of Millspaugh’s classes as a guest speaker. He left business cards and told the students to call him if they ever needed anything. Millspaugh did.

“I saw it as a business leader in the community reaching out to students and to the university to help them,” Millspaugh said. “And I realized the value in that, and what could become of that, and I wanted to know more from him.”

The two of them began to meet, initially as a way for Millspaugh to have a mentor in the business world. But the relationship blossomed into conversations that spanned both their professional and personal lives. Now, Millspaugh said, they communicate five to seven times a week.

He didn’t realize it at the time, but this experience would provide him the answer for a problem he wrestled with three years later. Millspaugh, who was now a 29-year-old UAFS graduate and account executive at UPS, had seen the brain drain firsthand, having watched many of his friends who grew up in Fort Smith and graduated from UAFS leave the area for other job opportunities.

But Millspaugh began to realize that those opportunities his friends sought out were also available in Fort Smith. For him, the question became: How could he get the best and brightest of Fort Smith’s youth to stay in the city and work long, fulfilling careers?
 
Then Millspaugh found a connection. The bond Millspaugh had with Hanna was unique, but what if it didn’t have to be? What if other students at UAFS could have the same opportunity? Millspaugh went to Rick Goins, alumni director at UAFS, with an idea for a new program that would pair business leaders in the community with university students in a mentor-mentee relationship to strengthen the bond between UAFS students and Fort Smith.

To date, 15 students have completed the UAFS Mentor Connections program.

“The university changed the direction of my life for the better, and I feel that it’s my responsibility to help the university,” he said. “The area I saw where I could pay them back is by helping connect the university to the community. The Mentor Connections program is just the first baby step in my personal objective.”

“My mentorship has changed my life, and it’s going to continue to change my life,” he added. “And I wanted it to change other people’s lives as well.”

The Alumni Office launched the program in the fall, and it spanned the full school year. The roster of mentors includes Fort Smith Mayor Sandy Sanders; Ivy Owen, executive director of Fort Chaffee Redevelopment Authority; and Jim Walcott, president of Weldon, Williams & Lick.

The mentors and mentees meet once a month in a variety of settings – coffee shops, the mentor’s office, a quick lunch spot, dinner at a restaurant – and they talk about both professional and personal subjects.

A unique aspect of the program is the addition of a recent UAFS alumnus to each mentor-mentee team. The alumnus works to facilitate the relationship between the two, but also gets the added benefit of being mentored as well.

“The alumni make the uncomfortableness a little more comfortable,” Millspaugh said. “The alumni have the experience of setting meetings and interacting with decision makers in their company, and they’ve been in the professional world a little longer than the students.”

The mentor program offers multiple benefits to the students who participate, but the most important benefit mirrors the purpose of the university itself: to prepare students for a future in the workplace. The mentorship also focuses on less tangible lessons.

“It’s to help them understand what it’s going to take to transition from school to the real world,” Goins said. “We hope to build self-confidence in these students, and what I foresee five years down the road is that we’re going to have a substantial number of well-connected and engaged alumni.”

Cole Sullivan of Rogers, a finance major set to graduate in May, was pleasantly surprised to make such a connection. After being approached by the interim dean of the College of Business, he agreed to participate in mentoring program – and then discovered his mentor would be Judy McReynolds, CEO of Fort Smith-based ArcBest Corp.

“I was shocked. At the [program’s inauguration] ceremony when Rick revealed it, I couldn’t believe it,” Sullivan said. “ArcBest is a big employer down here, and to be able to sit down with her, it was just kind of unreal.”

Whereas other students might have leveraged a relationship with a CEO into a job opportunity, Sullivan chose another route: He didn’t tell McReynolds when he applied for and landed his student worker position as a pricing support analyst with the ArcBest subsidiary ABF Freight.

“I wanted to do it on my own,” he said. When he walked into her office wearing his ABF nametag, he caught her by surprise.

“She glanced at it and did a double take and asked, ‘Are you working here now?’” he said with a laugh.

McReynolds had high praise for Sullivan.

“Cole is a pleasant, hardworking young man, and I enjoyed getting to know him,” McReynolds said. “It is nice to see a student with his work ethic and approach succeed.”

In March, ABF Freight offered Sullivan a full-time job, which he’ll start after graduation. He hopes it will be the beginning of a long and fruitful career in the Fort Smith area.

“When I moved down here to attend UAFS, I was still set on transferring after two years. But this past year, even before I was offered the job with ABF, I said, ‘I’m going to stay in Fort Smith,’” he said. “This feels right, and I think it’s a combination of my experiences at UAFS that have really molded that idea of Fort Smith for me.”

But the mentorship has been as eye-opening for the mentors as it has been for the students.

“I’m 54 years old, and a 54-year-old’s perspective on life is different from a 24 year-old’s,” said Hanna, who is serving as a mentor to UAFS student Chukuwekere Ekeh of North Little Rock. “You lose sight of certain things, and you become somewhat set in your ways. But Chukuwekere and Casey, they’re inquisitive and full of questions, and it makes me be that way when I’m around them.”

To reinforce this notion, Hanna related the story of his first meeting with Ekeh.

“We sat there, and I’m trying to pour out all my knowledge, and at the end of our session Chukuwekere says, ‘I want you to read a couple of books,’” Hanna said. One was a speech given by Franklin D. Roosevelt in 1910, and the other was “Who Stole My Cheese?”

The CEO was taken aback, unsure if Ekeh realized who was the mentor and who the mentee. But Hanna read the speech and the book, and was affected deeply by the latter.

“I shared copies for all my staff, my wife and my sons. It just became something that we all latched onto,” he said. “Looking for oil and gas is what I do, and the book was all about the resources you live off of and what happens when they’re not there. It really resonated with me.”

Gov. Asa Hutchinson will call lawmakers into special session May 26 to pass a bond issue to help Lockheed Martin land a contract to assemble the U.S. Army’s and Marine Corps’ Joint Light Tactical Vehicle (JLTV), the successor to the Humvee, at the Highland Industrial Park at Camden.

Hutchinson said the plant could create more than 500 jobs if Lockheed Martin wins the contract. J.R. Davis, Hutchinson’s spokesperson, later clarified that the bond issue would help create about 600 jobs and secure an additional 550 jobs in existence.

Hutchinson made the announcement during a speech before the Political Animals Club at the Governor’s Mansion. As part of the call, legislators also will consider how to promote efficiency in government. Still to be determined is whether legislators will consider moving Arkansas’ primary elections to March.

Amendment 82, approved by voters in 2004, allows the state to issue bonds for infrastructure and other needs to promote economic development. Hutchinson told reporters afterward that details of what will be involved in the request are known and would be revealed about a week before the session. He is still waiting on an independent analysis to have a better idea of the investment and the size of the return.

“It is really a bond initiative that will create jobs,” he said. “There’s a training component to it, but this is really a very simple, straightforward bond initiative.”

He anticipates calling the session about a week before the session and expects it would last about a week.

Lockheed Martin’s Camden Operations Site Director Colin Sterling told Talk Business & Politics in March that the company employs an average of 650 employees per year in Camden. The company performs final assembly on a number of systems there, including the Multiple Launch Rocket System launcher and rockets and the Patriot Advanced Capability-3 Missile.

Other finalists are Oshkosh and AM General, the maker of the Humvee. The Army and Marines have said they will procure approximately 55,000 JLTVs at a cost not to exceed $250,000 each. International buyers also are expected to have interest in the vehicle. Hutchinson said this would be the state’s first vehicle assembly plant.

After Hutchinson’s announcement, House Speaker Jeremy Gillam, R-Judsonia, predicted the bond issue would pass.

“I think that once the membership is able to see all of the information that we have, I feel like that they’re going to be as excited as we are about the project,” he said. “But with a hundred members in the House, I’m not going to presume to offer up any analysis just yet since the members really haven’t had a chance to look at the information yet.”

Also included in the call would be proposals to streamline state government. Hutchinson did not provide specifics but did cite two examples that have already occurred: the Lottery Commission being moved under the umbrella of the Department of Finance and Administration, and the Department of Rural Services’ physical location being moved into offices of the Arkansas Economic Development Commission because space was available.

Another potential topic would be moving Arkansas’ primary to March 1 to coincide with other Southern states in what is being called the “SEC primary,” or simply moving the primary to another date. A proposal to do that was debated in the legislative session but failed.

“I’m still talking to the legislators about that and weighing that option,” he told reporters.
Asked by reporters about the option, Gillam said, “We’re anticipating that there’s a high probability that it will be on the call, but we don’t know for sure.” He said success this time could depend “on what the actual legislation says.”

Zero Mountain is more than six months into expanding with its Zero Mountain Logistics company. The new division employs 30 people, including 17 truck drivers, with plans to employ 50 by the end of the year and have up to 35 trucks and drivers running coast-to-coast and within the region.

Michael Francks, general manager of the logistics operation, said Zero Mountain storage customers began asking for a simpler solution with respect to transferring raw materials to processing facilities and then delivering finished goods back to a cold-storage facility.

“They were needing carriers to handle their goods, and with our background in food safety, we had knowledge of the total cold-chain solution,” Francks said.

Parent-company Zero Mountain began in 1955 in a limestone mine located in Johnson (in Washington County near Springdale). The old mine had 25,000 square feet of refrigerated and freezer space. The company today is a $50 million dollar operation that employs 175 people and provides more than 30 million cubic feet of control temperature storage in Fort Smith, Johnson, Lowell, and Russellville. The company handles each year more than 2.5 billion pounds of product.

‘A ONE-STOP SHOP’

Joe Rumsey, president and CEO of Zero Mountain and Zero Mountain Logistics, said the company in July 2014 began the work to create the logistics operation. The first truck shipment happened Oct. 26. Since then they’ve hired 17 drivers and have 17 trucks and 38 refrigerated trailers. The trucks may make runs within the region, or haul products to either coast. The logistic company’s customers include OK Foods, Butterball, Twin Rivers, Mars Petcare, Gerber, and Ozark Mountain Poultry.

A key aspect of the service is that Zero Mountain was already familiar with U.S. Department of Agriculture food-handling rules. That experience, Rumsey said, is a selling point for the logistics operation.

“We want to be a one-stop shop for our customers,” Rumsey said.

Rumsey would not talk investment details, but did say a “several million dollar loan” and the support of the parent company made possible the logistics expansion. For example, parent company assets were helpful in securing financing, and the company’s existing human relations department and benefits programs were utilized to launch the logistics operation.

“Without the backbone of Zero Mountain to support us, this would never have happened,” Rumsey said.

And the support of a parent company is not an insignificant point. Equipment costs, broad federal regulations, expensive insurance premiums, and a growing driver shortage problem are just a few realities creating a barrier to entry in the trucking and shipping industry.

DRIVER SHORTAGE PROBLEM
The biggest obstacle Zero Mountain Logistics faces is finding qualified drivers. It’s a problem small and global freight companies are struggling to overcome.

John Larkin, transportation analyst with Stifel Nicolaus, has said driver shortages are the biggest concerns for trucking CEO’s going into 2015. He projects the driver shortage to widen to 240,000 by 2020. He cites increased demand and retirements of veteran drivers along with declining interest from younger generations as the primary cause for the shortage.

Brad Delco, a transportation industry analyst with Little Rock-based Stephens Inc., recently told The City Wire that it’s getting increasingly “more difficult to recruit honest, safe and reliable truck drivers.” He said just 5% of applicants industrywide meet all the requirements to be a commercial driver.

Part of what makes it tough is the working environment.

“By going coast-to-coast, we’re asking drivers to be out for two weeks. It’s tough. We have to find drivers with a great work ethic,” Rumsey said.

Francks said they have posted advertising for drivers, but “word of mouth” is their biggest tool. He said Zero Mountain Logistics offers an “extraordinarily competitive” benefit and salary package. He did admit that driver pay and benefits were 20% higher than their initial budget estimate. They company is not using owner-operator trucks, or truck teams.

They are making progress on the driver front. On May 7 they put two new drivers on the road, which boosted their seated truck fleet to 17. They hope to have up to 35 drivers by the end of the year, with an estimated 50 working for the logistics operation.

The upside of the national driver shortage is that a shortage of capacity in the industry has resulted in higher shipping rates. Companies like Fort Smith-based ABF Freight and Lowell-based J.B. Hunt have benefitted in recent quarters from higher shipping rates even if overall tonnage shipped has declined. Zero Mountain Logistics is on the right side of the ever-changing shipping industry cycle in terms of favorable rates and high demand for freight services.

“We’ve created about 30 jobs since October,” Rumsey said. “We’re helping the community out by providing new jobs, and we’re paying people good money to step into these roles.”

Expanding the new company also included acquiring a 206,000-square-foot dry goods warehouse in Fort Smith adjacent to their cold storage facility. They are in the process of renovating the facility for food and food ingredient storage.

Grocery giant Safeway announced the closing of nine stores across the Denver market, which is 45% of its real estate in the mile-high metro area. The culprit of these closures slated for mid-June is the continued loss of market share to Wal-Mart Stores and trendy food retailers like Trader Joe’s, Sprouts and Whole Foods which entered the market in recent years.

Safeway confirmed to the Denver Post on Saturday (May 9) the nine grocery store closures across Denver which included three in Aurora. Kris Staaf, spokeswoman for Safeway said these stores have been under close corporate scrutiny for several years. She said the decision to close the underperforming stores was made because they were not profitable.

Retailer market share data across the Denver metro area indicates that Kroger’s Kings Soopers/City Market garners the biggest share at 33.4% as of December 2014. Wal-Mart Stores comes in at No. 2 with 24% of the market share, while Safeway had 19.5%. More trendy Trader Joe’s which entered the market last year had amassed just 1%, while Whole Foods had 2.8% and Sprouts accounted for 1.3%. 

According to the Shelby Report, Wal-Mart has grown its market share in Denver from 2.5% in 2001 to 24% today. In that same period, Safeway’s share declined from 24.3% to 19.5%.

Safeway attempted to lower its prices in 2009, but Staaf said the long battle to shore up the unprofitable stores had gone on long enough, and the decision was made to close nine stores.

Wal-Mart has made no secret that the Denver market is important to the retailer’s strategy. The Bentonville-based retailer behemoth operates 36 stores in the Denver metro area, all of which offer online grocery ordering and pickup or home delivery. Wal-Mart began testing the grocery pickup and home delivery in Denver about two years ago under the leadership of then Walmart U.S. CEO Bill Simon.

Denver was chosen as the first metro wide test for pickup and delivery of online grocery orders because it had so many stores in the city. Wal-Mart has since said more than 80% of this online grocery pickup business comes from repeat shoppers. The service also has indexed well in terms of customer satisfaction, according to Judith McKenna, chief operating officer for Walmart U.S.

“We are really encouraged by the tests in pickup,” McKenna said, adding that 80% of the customers in Denver rate the service positively.

McKenna said population density is needed for the home delivery option to make financial sense for retailers. But in commuter markets, click & collect models for grocery could find favor among many shoppers. This model is perceived by analysts to be a major advantage for Wal-Mart given that it has amassed more than 4,300 stores across the U.S. that can be distribution points for online orders of grocery and general merchandise.

The online grocery market, worth $6 billion annually, is projected to grow at 9.5% a year between 2012 and 2017, according to the market research firm IBISWorld.

One important lesson McKenna said Wal-Mart learned from Denver is that despite a low $5 to $10 home delivery charge, the store pickup option is more popular and works well with busy consumers juggling hectic schedules.

While Safeway offers grocery home delivery in several U.S. metro areas, Denver was not one of them. The West-coast-based grocery veteran said it also does not offer curbside pickup for online grocery orders at this juncture.

Retail experts like Carol Spieckerman, CEO of newmarketbuilders, has told The City Wire that first movers in the space of grocery home delivery and more specifically grocery pickup services are likely to gain marketshare advantages over laggers. Spieckerman has lauded Wal-Mart’s ongoing investment and pilot testings that bring digital and physical together. She said Wal-Mart’s nimble actions to test multiple formats in grocery pickup make logical sense.

“Retailers that offer a full portfolio of delivery and pick-up options will make the most of their physical scale (the one true advantage over Amazon), while mitigating “jumping off” points with customers who define convenience differently depending on need states, categories being shopped and even the time of day,” Spieckerman said.

A test by Wal-Mart Stores to offer access to affordable health care that involves 17 Care Clinics inside Walmart U.S. supercenters is going well, according to the company, with 22% of clinic visitors being Walmart employees and dependents.

The burgeoning cost of health care affects millions of American consumers each month. Retail giant Wal-Mart Stores set out to test its muscle in this area about a year ago launching Care Clinics in underserved markets identified by the retailer in Texas, South Carolina and Georgia.

Jennifer LaPerre, senior director with health & wellness for Walmart U.S., told The City Wire that the 17 Care Clinics are being well received in the areas where they are located. The clinics, owned by Wal-Mart and operated through a partnership with QuadMed, are still in a test phase. LaPeere said 22% of the patients have been Wal-Mart workers and their dependents, with the remainder being customers.

The Wal-Mart Care Clinic model provides a wide range of primary care services as well as acute and chronic care capabilities for a $4 office charge among its workers and dependents who carry the retailer’s health insurance. For everyone else the cost is $40. This is a fraction of the typical $160 to $240 routine office visit cost outlined by Blue Cross Blue Shield in early 2014. 

LaParre said one of Wal-Mart’s key strategies with the test was to disrupt prices in markets where they had a high density of workers in conjunction with areas of provider shortages and under- and uninsured populations tapped into medicaid. 

“This model has a dual purpose, to serve our associates and dependents but also our customers both of which are satisfied with our Care Clinics,” LaParre said in a phone interview with The City Wire.

ACUTE CARE, CHRONIC ISSUES
She said another aspect Wal-Mart hopes to accomplish with this service is a more expanded care of options than some of their retail competitors – like Walgreens or CVS Care Mark – to include acute care operations.

“Our broadened scope of primary care includes annual checkups, vaccinations, immunizations and physicals but also encompasses acute care for sore throats, coughs allergies and sinus issues and provides a level of care for chronic health issues like diabetes, hyper-tension or high blood pressure,” she said.

LaParre said 30% of the population has chronic conditions and yet 47% of the patients that Care Clinics see do not have a primary care provider. She said 70% of health care spending today is for chronic conditions.

“We know we are providing a service that is truly needed,” she said.

LaParre did not rule out that Wal-Mart could bring its Care Clinic test home to Northwest Arkansas and the Natural State. She said Wal-Mart has plenty of workers in the region and state who could benefit from this service. That said, LaParre said the retailer also has a strong relationship with the health care providers in the region that it wishes to maintain. She also said Wal-Mart will continue to look for low-cost service strategies for its employees, their dependents and its customers in Arkansas.

CLINIC RESULTS
The first Wal-Mart Care Clinic opened 54 weeks ago, so LaParre said the tests are still quite young.

A 2010 study by HSC indicated it could take up to five years for in-house clinics to make a positive return on investment. LaParre said the experiment is not about a quick return on investment but a benefit that helps employees and customers, and helping the retailer become a health and wellness destination.

Sarah McKinney, corporate spokeswoman for Wal-Mart, said the clinics are positive for driving trips to the stores and saving people money which can be spent on other essentials.

More importantly, Wal-Mart has 500 million reasons to aggressively test these company-owned heath care clinics in its retail stores. With 1.1 million Americans working at Wal-Mart, the retailer said in August 2014 its health care costs were expected to cost $500 million for the year. That was $110 million more than planned as more of its workers signed up for company-sponsored plan following the enactment of the Affordable Health Care law. 

Last year the national average total health care cost per employee topped $12,000, rising 5% from the year before, according the National Business Group on Health. Employers typically cover 75% or more of that total cost as a benefit to their workers. That number was based on surveys from several hundred employers across the country.

The economy across the Natural State is looking up which has helped hoist consumer sentiment measured by Arvest Bank’s semi-annual survey. This spring report released Tuesday (May 12) shows the index measuring Arkansas consumer sentiment rose to 79.1 in March, up from 68.1 in October and 67.4 in June 2014.

The survey also includes consumers in Oklahoma and Missouri, including Kansas City. While Arkansas’ consumer sentiment has risen consistently since the survey began last summer, the rate of exuberance continues to lag levels registered by consumers in Missouri and Oklahoma.

Missouri respondents returned a consumer sentiment index reading of 85.2 in March, 77.4 in October 2014 and 68.6 last June. Missouri registered the highest sentiment reading this spring, just shy of the national level at 85.3 which is compiled by the University of Michigan.

Oklahoma’s sentiment reading was also higher than Arkansas at 84.8 in March, up from 72.6 in November 2014 and 76.4 in the June study, according to the report.

In Arkansas, the largest gains among consumers surveyed in March came from three specific groups. Among respondents with no children the index jumped from 59.7 in October to 92.9 in March. The most optimistic group surveyed were young Arkansans ages 18 to 24, this cohort’s index rose from 92.4 in October to 113 in March. Another notable increase – from 66.5 to 90.8 – came from Arkansans who are unemployed.

“The state’s improving employment and income situation, along with lower gasoline prices at the pump, gave consumers a boost in both perceived current conditions and near-term expectations,” said Kathy Deck, director for the Center for Business and Economic Research at the University of Arkansas.

Arvest data has reflected Deck’s assertion, showing less total dollar spend in the fuel category, while deposits in consumers’ checking and savings accounts generally have risen.

“The increase in the Arkansas index is a sign that people are feeling better not only about their personal financial situation, but also have some confidence in the economy of the region as a whole,” John Womack, president and CEO of Arvest Bank in central Arkansas, said in the index report. “As their confidence grows, they will feel better about buying needed items for their families and maybe taking on some personal debt. Knowing this helps us to prepare to meet their financial needs in a way that works best for them.”

Improved consumer sentiment has played a role in improved home sales in the first quarter of 2015 in state’s four largest regions, according to recently released Arkansas Home Sales Report. The report is produced by The City Wire. First quarter home sales totaled 4,639, up from 4,302 in the same period of 2014, and up 11.09% compared to the same period in 2013. For the first quarter, home sales are up 5.33% in central Arkansas, up 7.91% in the Fort Smith metro, up 8.28% in the Jonesboro metro and up 11.22% in Northwest Arkansas.

Deck said the strength of Arkansas’ ongoing economic recovery that began in 2009 but has only recently gained noticeable momentum.

One of the signs that the economy is improving is that unemployment in the state has improved, she said. According to the Arkansas Department of Workforce Services, the unemployment rate in Arkansas improved to 5.6% from 6.4% a year ago. In real numbers, that means 1.26 million Arkansans have jobs in March 2015 compared to 1.21 million workers a year ago.
 
Deck said one thing to watch is mortgage rates, which have stayed low for a few years because of the Federal Reserve’s policy of keeping rates low for the purpose of strengthening the economy. If the Fed determines the economy is strong enough to stand on its own, then it may raise short term interest rates and those could cause mortgage rates to increase as a result.
 
According to Mortgage-X, the average interest rate on a 30-year mortgage at the first of May was 3.5%. Of the mortgage bankers polled around the nation by that site, 32.1% believe mortgage rates will remain unchanged over the next 90 days, while 42.9% believe rates will rise slightly over the next three months.
 
Deck said one danger about the current recovery is that wages have not increased and that worries some workers.

With one of the worst-kept economic development secrets officially out in the open, former Arkansas jobs chief Grant Tennille said the possible expansion of Lockheed’s Camden operation to manufacture a new military vehicle will have benefits far beyond that city’s industrial park.

Tennille, who served under Gov. Mike Beebe as executive director of the Arkansas Economic Development Commission, said ancillary effects of a new state-of-the-art military vehicle being built in Camden will be greater than the 600 or more new jobs from the production.

Gov. Asa Hutchinson said Monday (May 11) that a Special Session of the Arkansas Legislature will convene May 26 to authorize use of Amendment 82, the state’s superproject amendment. That legislation allows the state Legislature to approve up to 5% of the state’s general revenue budget to be used for bonding of large-scale economic development projects. The session would center on a potential economic development superproject involving Lockheed Martin in Camden, Ark. The aerospace and defense contractor is in the running for the Joint Light Tactical Vehicle (JLTV) being developed by the U.S. Army and the Marine Corps as a successor to the Humvee vehicle, which has been in service since 1985.

If Amendment 82 incentives are approved, it will be the second time in less than three years the law will be used. Legislators in early 2013 approved a $125 million bond issue to support a $1.3 billion investment by Big River Steel to build a steel mill near Osceola in east Arkansas.

JLTV BACKGROUND
The push for a new vehicle came in 2006 from Congress following several years of reports from fighting in Iraq and Afghanistan in which the Humvee was not adequate for many combat operations. The Department of Defense first issued contracts in October 2008 for JLTV development.

The 2016 fiscal year Department of Defense budget includes $456.9 million for procurement funding of the next JLTV. The U.S. Army plans to buy 49,909 JLTVs by 2040, and the U.S. Marine Corps plans to buy 5,500 JLTVs by 2022.

According to a March 9, 2015 report from Congressional Research Service, the Army will pick a winner by “late summer” 2015.

“The winning contractor would build approximately 17,000 JLTVs for the Army and Marines during three years of low-rate initial production, followed by five years of full-rate production,” noted the CRS report. “The first Army unit would be equipped with JLTVs in FY2018, and the Army’s complete acquisition of JLTVs would be completed in 2040. The Marines would begin acquiring their 5,500 JLTVs at the beginning of production and would be completed by FY2022.”

Grand Prairie, Texas-based Lockheed's vehicle is competing against Oshkosh and AM General.

South Bend, Ind.-based AM General was the lead contractor supplying the high-mobility multi-purpose wheeled vehicle (HMMWV, or Humvee) for U.S. Armed Forces at U.S. allies since 1985. AM General has delivered more than 250,000 of the vehicles to armed forces in the U.S. and to those of U.S. allies.

‘QUICK APPROVAL’
Tennille, who worked on the project up until Gov. Hutchinson’s economic development team took office, expects relatively “quick approval” from the Legislature compared to the process involved with Big River Steel. Not only did competitor Nucor – which has operations and connected suppliers in Arkansas – oppose Amendment 82 support for Big River, but Big River was not a company prior to funding of the new mill. Lockheed is an established company and there is no opposition from another company.

“Obviously, you not only have a company that exists, but is a global operation ... Lockheed Martin is no slouch,” Tennille said.

He also said the project will be popular, noting that building the “next generation of a vehicle for our fighting Americans” is something “Arkansans will eat up with syrup on it.”

Another project detail that will be popular with Legislators is that Lockheed requires suppliers to have a facility within 125 miles of Camden, Tennille said, adding that a JLTV program “will have hundreds of suppliers.” And the more than 500 jobs with salaries averaging at least $50,000 a year also will be something Legislators will want to secure.

“I think this will capture the public imagination in a way that the steel mill never did,” Tennille said.

FUTURE RECRUITMENT IMPACT
If Lockheed’s JLTV program is selected, the resulting workforce training and market reputation will help the state recruit other production facilities in the auto, defense and aerospace industries, Tennille said.

He said the investment in and development of workforce training “will be massive” and will include public schools, two-year and four-year colleges. Lessons learned in what Tennille predicts will be “a lot of collaboration” between different layers of educational institutions will prove an example of what is possible to state leaders and decision makers outside Arkansas.

In addition to the workforce will be that Lockheed will build and operate for several decades one of the most advanced manufacturing facilities in the country. Tennille said Lockheed’s JLTV is a “big old massive truck with a number of different configurations, one of which is a command and control vehicle which will have more technology in it than the space shuttle.” Combine that with a supplier network and the deal just gets better.

“Within a year, we will have one of the most sophisticated vehicle assembly facilities in the United States. ... And we will have a supply chain spread out from West Memphis, over to Little Rock down to Hope and over to Texarkana,” Tennille said.

All of that gives Arkansas a “huge advantage” in the recruitment of other auto assembly plants and advanced manufacturing operations.

“That’s been the whole ball game, for us, from the beginning” to have that added dimension, Tennille said.

LOCKHEED SELECTION
Prefacing his remarks that nothing is certain in the government procurement process, Tennille said there are several reasons he is optimistic Lockheed will get the nod to build the JLTV.

First, the Department of Defense often prefers larger companies with greater resources to build new systems. Tennille said that gives the edge to Lockheed.

Also, if war or hot spots around the globe require more JLTVs, Lockheed has other facilities around the nation and globe that could be ramped up. Tennille said Oshkosh and AM General would have “capacity issues” with respect to boosting production.

Tennille also said Lockheed’s Camden plant “has a good reputation” after many years of producing missile components and launching systems. He said the Camden operation in 2012 won the prestigious Malcolm Baldrige National Quality Award for manufacturing excellence.

“In that (defense contracting) industry, Camden is at the top of the list,” Tennille said about the plant’s reputation.

A Whirlpool vice president said Tuesday (May 12) that a successful redevelopment plan for the company’s shuttered manufacturing plant and associated 95 acres will likely require “strategic demolition” and a plan to “repurpose” the property into smaller parcels.

Jeff Noel, vice president of communications for Whirlpool, was in Fort Smith to update the Fort Smith Board of Directors on redevelopment plans for the property and on pollution mitigation on and around plant property.

Benton Harbor, Mich.-based Whirlpool Corp. closed the refrigerator manufacturing plant in June 2012, which at the time employed about 1,000, but was home to more than 4,500 jobs at its peak. Later that year it was made public that trichloroethyclene – a cancer-causing chemical – was found in and around the plant. Whirlpool has been working to monitor and remove the chemicals, with oversight of the work handled by the Arkansas Department of Environmental Quality. ADEQ issued its first remedial action plan December 2013.

PROPERTY REDEVELOPMENT
As to redevelopment of the 95 remaining acres and the 1 million square foot manufacturing building that remains on the Whirlpool site, Noel told the Board that it is not likely to find a single buyer who will use the entire site.

Columbus, Ohio-based Spartan Logistics acquired the 620,000-square-foot warehouse facility adjacent to the large manufacturing facility. Spartan and its associated companies provide “one-stop shopping” to many Fortune 500 companies with package handling, light manufacturing, packaging assembly, inventory controls, shipping and other needs.

Company founder Ed Harmon said the entire space is now occupied by four companies who employ up to 300 people.

Noel said Tuesday that “strategic demolition” and dividing the property into 12 or more parcels would “create a 95 acre industrial park” and may be the best opportunity for returning jobs to the area. He said Whirlpool is eager to work with city staff, area chambers of commerce and other groups on a “plan of action” for the property.

“Over the course of the next year we need to get a buyer,” Noel told The City Wire after the meeting when asked if Whirlpool had a timeframe for trying to sell the property.

Tim Allen, president and CEO of the Fort Smith Regional Chamber of Commerce, welcomed the idea of “chopping it (Whirlpool property) up into different uses.” He said the challenge with the redeveloping the property is that it is near neighborhoods, is a large facility and has the stigma of a pollution history.

“Those things don’t necessarily help us in marketing the property. ... So the key is to find a strategy, with the right owner, to make the property attractive,” Allen said.

QUARTERLY POLLUTION REPORT
Noel said the TCE mitigation effort is progressing well. He and Mike Ellis, with ENVIRON, the company hired by Whirlpool to manage mitigation efforts, outlined key points in the process. Those are, according to a report from Whirlpool:
• Chemicals to breakdown TCE have decreased TCE concentrations in groundwater by approximately 69% in Area 2 and 3, 70% in the Neck Area and 66% in Area 1, during the first quarter of 2015;

• The first quarter reductions represent improvements of 14%, 15% and 16%, respectively, since the fourth quarter of 2014;

• The TCE plume beneath the neighborhood to the north of Ingersoll Ave remains separated from the plume beneath the Whirlpool property;

• 86% of monitoring wells in the south plume and 79% of wells in the north plume exhibit either little or no TCE or a decreasing or stable TCE concentration trend;

• The overall areas of the south plume and north plume have decreased approximately 3% and 5%, respectively, since the fourth quarter of 2014 monitoring;

• There continues to be no known TCE impact to offsite soils, surface water or sediment, and health exposure risks remain unchanged; and

• Risk estimates based on groundwater and soil vapor data continue to show no health risk from TCE vapors.

Noel said 48 of the 50 property owners in the original plume area have settled with the company, and he expected one more to settle Tuesday. Settlement talks with two non-profits in the area are “productive,” he said.

Homeowners in the settlement receive 100% of their property devaluation plus 33% of the devaluated amount. For example, one homeowner had a $90,000 property value prior to the TCE pollution, with that value lowered to $43,000 after the pollution was known. Whirlpool paid that person $64,000 to cover the $47,000 loss plus 33% of the loss.

Fort Smith Director Tracy Pennartz asked Noel several questions about the settlement. After the meeting, Pennartz told The City Wire she was uncertain about the fairness of the settlement, but said “if they (homeowners) are satisfied, I’m satisfied.”

Tucked discretely away at one of the busiest intersections in Fayetteville more than 630 workers are turning out an average of 62,000 pair of prescription eye glasses each week at Wal-Mart’s largest optical lab in the country.

The local plant is operating at around 70% capacity following a recent $10 million investment in new equipment and technologies provided by Carls Zeiss and Satisloh.

Carmen Bauza, senior vice president of OTC health and wellness, baby, paper goods and chemical at Wal-Mart, said the infrastructure investment was needed to broaden the scope of the retailer’s optical services. Wal-Mart also is expanding its vision centers in at least 80 stores. The first remodel is underway in the new Walmart Supercenter at Elms Springs Road in Springdale. 

The plan includes relocating the vision centers near the pharmacy area for added convenience where that is possible.. She said the retailer is also looking to carry more frame styles and brands that will cater to the Millennial generation’s trendy fashion sense. 

“We needed to add to the plant’s capacity because we are going to sell more eyeglasses this year,” Bauza said during an open house held in the Fayetteville Optical Lab on Tuesday (May 12).

The local optical lab is the most modern Wal-Mart facility following the recent upgrades. Wal-Mart also operates two smaller labs in Crawfordsville, Ind., and Dallas, according to Scott Pickering, senior director of the Optical Lab. Pickering said upgrades this year are planned for the other facilities. The retailer also works with two partner labs on some orders. He said contact lens orders come directly from product suppliers which is the most cost-efficient solution for customers.

Uli Krass, executive for Carl Zeiss Vision North America, said labs around the world have made eye glasses much the same way for 80 years. He said recent advances in methods and materials were used by Wal-Mart to modernize the Fayetteville lab.

STABLE JOBS
The Fayetteville plant is managed by Tommy Hyde, who’s been on the job for two decades. Hyde told The City Wire that the operation has little turnover and is the second largest employer in Fayetteville. It operates 24 hours a day using multiple shifts from employees working a 3-day week. 

Pickering said the average wage for the skilled jobs is above $15 per hour, and a majority of the training is done in-house. 

“There are no other optical labs in this region, so when we bring in new equipment we send our associates to the suppliers for training. That includes our maintenance staff who makes sure all the equipment is up and running. Since we are open 24 hours a day, good maintenance is crucial to our operation,” Pickering said.

This year the Fayetteville lab location celebrates 20 years of growth, from just 150 workers making an average of 1,500 pairs of glasses daily around 1995, according to Ben Israel, optometrist and early partner with Wal-Mart founder Sam Walton’s beginnings in vision care sales. (Israel sold his interest in 1995 following Walton’s death.) 

Wal-Mart has since continued to grow and expand its optical business working with more than 3,000 optometrists who operate eye clinics in its stores. Bauza said the retailer continues to look for new opportunities to expand this business segment in more of its stores, but finding partner optometrists is an essential element.

According to the Vision Impact Institute research, 3 out of 4 people in the U.S. have vision correction, and of those people, 71% wear glasses and 22% wear contacts, which is all the more reason for Wal-Mart to invest in this segment, according to retail analysts.

MAKING SPECTACLES
Once an eye doctor enters a patient’s prescription into the Wal-Mart system, the order is transmitted directly to one of the retailer’s optical labs. The lenses go through three separate phases inside the lab which takes about nine hours to complete. 

While a pair of glass can be made in one work-day, the routine turnaround time in the Fayetteville facility is three days – the optimal operating pace the retailer says allows it to keep prices low and quality high with existing staff.

The first phase involves taking a glass puck-like lens and affixing a plastic grip block to the back to help move through a long conveyer system. In phase one the machinery processes the backside of the lenses according to the prescription.

Wal-Mart said part of the new technology used in this plant is sustainable. Metal is replaced by plastic reusable grips. Pickering said the new technology also allows the facility to make no-line bi-focal lenses, which in the past were handled by a supplier.

When the first phase is complete, the plastic block grips are removed and the lenses are are cleaned and inspected. Phase two applies an anti-reflective coating for improved optics. The lenses move into a machine in a controlled climate clean room, which takes up to eight hours to complete. This is also where protective scratch coating is applied with a heat process.

Between phases two and three the lenses are married with the frame selected by the customer. The frame is added to the basket containing the lenses and the prescription details. In the final phase the lens is finished, cut to the shape of the frame, mounted to the frame and await final inspection. This is the most labor intensive step and where most of the employees work. 

A machine cuts the lenses to fit, and a worker cleans the lenses and mounts them into frame. They are checked again for quality and accuracy. The complete order is bagged and shipped to the appropriate store. 

The City Wire asked Pickering how far the retailer was prepared to go to provide trendy frames such as wearable tech-eye fashion. He said Wal-Mart is watching Google, but there are no plans to delve into that area. Pickering did admit that with Wal-Mart’s scale and tech muscle it’s not out of the realm of future possibility.

Shipping on the Arkansas River continues to slow in 2015, with the U.S. Corps of Engineers reporting a 9% dip during the first four months of the year. Recent heavy rains in Arkansas, Kansas and northern Oklahoma may slow traffic more in future months.

The U.S. Corps of Engineers reports that 3.718 million tons floated up and down the Arkansas River between January and April, down 9% compared to the same period in 2014. Inbound tonnage was up 7% during the first four months, while outbound tonnage was down 30%. Shipments between ports on the river were down 2%.

April saw 907,240 tons shipped, down 11.16% compared to the 1.021 million tons shipped in April 2014.

The Arkansas River system (The McClellan-Kerr Arkansas River Navigation System) is 445 miles long and stretches from the confluence of the Mississippi River to the Port of Catoosa near Tulsa, Okla. The controlled waterway has 18 locks and dams, with 13 in Arkansas and five in Oklahoma. The river also has five ports: Pine Bluff, Little Rock, Fort Smith, Muskogee, Okla., and the Tulsa Port of Catoosa in Oklahoma. 

Without gains in the remainder of the year, the river could see two consecutive years of shipping declines. Tonnage totaled 11.719 million tons in 2014, down from the 12.139 million in 2013 but better than the 11.687 million in 2012 and the 10.6 million in 2011.

Marty Shell, owner of Van Buren-based Five Rivers Distribution which operates the port facilities in Van Buren and Fort Smith, said he was expecting Arkansas River tonnage to increase in the second quarter based on shipping trends at ports in Houston and New Orleans. However, the recent and expected April rains have him minimizing his expectation of gains and pushing those to the third quarter.

“A couple of the locks have shut down ... and a lot of tow boats have tied up,” Shell said during a Monday (May 11) interview. “I will probably not be doing anything for about two weeks except for cutting grass and painting and cleaning up. ... You will definitely see a decrease (in river tonnage) in May and it could go into June.”

There is a double whammy for river operators, according to Shell. Once river levels return to near normal flows, the the Corps releases excess rainwater from Oklahoma lakes along the system.

“And we then get hit again. ... It will effect us for about two weeks or so,” Shell said, adding that it will be more than two weeks if more rain falls in the north Oklahoma and Kansas areas that drain into the Arkansas River watershed.

Because the ports in Fort Smith and Van Buren provide raw materials for everything from manufacturers in Fort Smith to the construction industry in Northwest Arkansas, high river levels for an extended period could become an issue. However, Shell said most of his customers carry about a month of supplies, and is confident river traffic will be moving within a month.

As to why tonnage is down year-to-date, Shell said that is a mystery to him.

“I cannot give you a reason why. We have been busy this year. Now we will slow down because of the water, but that’s the only thing that has slowed us down,” Shells said.

Shipments of sand, gravel and rock – typically the biggest category based on tonnage moved – totaled 891,841 tons during the first four months of 2015, down 11%. The category is a reflection of private and public sector construction. Iron/steel shipments totaled 562,525 tons during the first four months, unchanged compared to 2014. Such shipments reflect manufacturing activity near the shipping corridor.

The McClellan-Kerr Arkansas River Navigation System recently was upgraded from “Connector” to “Corridor” status under the U.S. Department of Transportation’s America’s Marine Highway Program

This is the third piece of good news for the MKARNS in recent months. Earlier this year, the U.S. Army Corps of Engineers changed the system’s designation from a moderate-use to a high-use system, the same classification given to the Mississippi and Ohio Rivers. Previously, the Corps had announced that its budget included a $3 million study of the “Three Rivers” area, which is the confluence of the Arkansas, Mississippi and White Rivers. A major flooding event in that area could shut down the system for up to a year. Half of the $3 million is funded by the federal government. State legislators agreed to fund the other half during this year’s legislative session.

A new Fayetteville development, anchored by a 40,000 square foot Whole Foods Market, is on target to open on North College Avenue in September and October, if not sooner.

The development at 3525 N. College Ave. is nearly fully leased with businesses, including Chipotle’s, Zoe’s Kitchen, Jimmy John’s and Alumni Hall, according to Alan Cole with Collier’s International. Colliers represents Whole Foods and the developers S.J. Collins.

“We are almost completely leased and the final space is being negotiated now,” Cole said Tuesday. “These are national, regional and local names that are familiar to shoppers.”

The center, called Whole Foods Marketplace, will feature 10 retail businesses in addition to the grocery store. Construction is expected to be completed and turned over to tenants in late June with the ancillary businesses opening in September. Whole Foods is expected to open in October, Cole said.

Steve Clark, president of the Fayetteville Chamber of Commerce, said some of those businesses could open before the start of classes in August at the University of Arkansas.

“Whole Foods is clearly a catalyst” in retail development and growth, Clark said, much like Nordstrom’s in the retail clothing arena. “Where (Whole Foods or Nordstrom’s) go, others follow. Retailers like Chipotle’s or Zoe’s Kitchen have a larger retailer they follow and they want to be part of this development.”

One projection is an increase in the traffic count passing the center when it opens. Clark said 2,000 more vehicles a day will pass by or pull into the parking lot. When Whole Food opens, that number is expected to climb to 5,000 vehicles.

“That’s huge,” he said, noting that many of those vehicles will come from Springdale, Rogers, or Bentonville and points in between to shop at the market.

Whole Foods has made a $25 million investment in the Fayetteville project and will hire about 140 employees, with an annual payroll of nearly $6 million, Clark said.

Another notable figure is the projected increase in sales taxes the city will collect. A January 2014 report by the Whole Foods company indicated their stores on average generate $983 in sales per square foot. The Fayetteville store will have 40,000 square feet.

The store’s original design was for 35,000 square feet but another 5,000 square feet was added to the store after construction began, pushing the size to 40,000 square feet Cole said.

A defunct car dealership was on the site of the new marketplace, valued at $1.9 million and paying about $20,000 in annual property taxes. Whole Foods likely will pay about 12 times that amount because of the size of investment it is making, Clark said. That adds local revenue to schools, city and county government operations.

Whole Foods also has a policy of donating 5% of a day’s sales to a local charity once a quarter, or four times a year. Clark said he met with a company representative just last week to discuss that aspect of the company’s presence.

Local farmers and growers should also benefit because Whole Foods is a decentralized business, meaning it buys many of its products locally because it doesn’t have its own supply chain, Clark said.

City Planner Andrew Garner said development and redevelopment on College Avenue has been occurring in bits and pieces for the last several years such as the conversion of the former Razorback Theater to World Gym and a former grocery store south of North Street turned into a roller skating rink.

More recently, the four corners at the intersection of College and Township Avenue “have totally turned over” in the last couple years with old buildings replaced by Arvest Bank, CVS Pharmacy and Kum & Go joining a Walgreen’s on that corner which opened several years ago.

Cole said there has been a lot of interest from retailers interested in a presence on North College. To accommodate that interest, there must be a marriage between property owners willing to redevelop their properties. One example of that is the construction of a Raisin’ Cain’s restaurant on College on the southwest corner at Millsap Road, which chose to be next door to Whole Foods. A former law office was razed on that corner to make way for the restaurant.

Retail giant Wal-Mart Stores confirmed that it has partnered with Alibaba’s financial arm, Ant Financial, to offer mobile pay in China. It’s an interesting deal given the two parties are competitors on some levels.

“We launched Alipay Wallet in 25 Shenzhen stores, including Sam's Club, with plans to expand to other stores in the future,” said Marilee McInnis, spokeswoman for Walmart International corporate affairs.

The primary reason Wal-Mart said it made the deal is because Alipay will help better serve customers. McInnis told The City Wire that allowing mobile payment in seconds, is increasingly what Walmart customers want because of the convenience and the ability to shop however, whenever and wherever they want.
 
This somewhat unlikely partnership on the surface makes sense on many levels, according to economic and retail experts.

Dr. Raja Kali, professor of economics at the University of Arkansas, said Chinese consumers are encouraged by their government to spend more money as China works to tilt more toward a consumer-driven economy and away from the export-driven model it has been for decades. He’s not surprised to see Walmart China reach out to Alibaba’s financial unit given that Alibaba is a trusted brand among the Chinese. Another interesting factor at work in China is the lack of credit and debit cards in use as the country is still a cash society.  

“We know that the Chinese consumers are sophisticated users of mobile phones and a large adopter of smart phone technology. It’s logical for Wal-Mart to take this initiative in this area because it gives their customers one additional way to pay for their purchases,” Kali said.

He has no doubt that the lack of credit and debit card usage across China is driving mobile pay faster there than in the United States.

“Retailers offering mobile pay in China are creating a leapfrog effect over credit and debit cards.” Kali said. “The fact Wal-Mart is testing this first in Shenzen, where they are headquartered is the equivalent of them testing something in Bentonville like they often do.” 

Alipay spokeswoman Miranda Shek told China Daily that the Walmart China partnership is a significant move as the mobile pay service is gaining popularity. Alipay reported it has more than 800 million registered users and 190 million active users for its mobile pay system. The company also claims to process 45 million transactions daily because the payment option is already accepted at 40,000 locations, including at Wal-Mart competitors Carrefour and government-owned grocers.

Retail expert Carol Spieckerman, CEO of newmarketbuilders, frequently lauds Wal-Mart’s efforts to test the waters, stretch its boundaries and look for solutions that best service its 220 million global customers each week. Spieckerman has characterized mobile pay here in the U.S. like days in the Wild West with various payment platforms jockeying for position amid skittish consumer sentiment from recent data breaches.

Mobile pay in China is further along which gives Wal-Mart an opportunity to use 
its global presence to test the payment form before it become more mainstream in the U.S. 

China is an important market for Walmart International and Walmart.com who controls an Alibaba competitor — Yihoadian. Kali said the benefits of working with Alibaba’s financial mobile pay option are important for Wal-Mart who does compete with Alibaba in some areas.  

“Think of if this way: Wal-Mart also competes with Google and Apple in some areas, but they also offer those products because it’s important to do so,” Kali said.

After pulling back on expansion within China in recent years, Wal-Mart Stores CEO Doug McMillon announced April 29 plans to open 115 new stores inside China by 2017. This expansion will expand the retail giant’s footprint by nearly one-third.

"Our aim is to become an integral part of China's economy," McMillon said in Beijing last month. "China is a top priority."

Shanghai, Shenzhen and Wuhan are three cities tagged for new store openings over the next two years. This expansion will create more than 30,000 jobs The retailer also said it will invest $60 million remodeling more than 50 other stores in China this year.
Doing business in China has not been easy for Walmart in what is a highly competitive environment. Walmart International CEO David Cheesewright said in February net sales in China declined 0.7% and comp sales were down 2.3% for the fourth quarter ending Jan. 31.

In its recent annual report Wal-Mart said it operated 411 stores in China as of Jan. 31.

J. B. Hunt Transport Services has made a $500,000 contribution to the Walton Arts Center toward the nonprofit’s $23 million fundraising campaign. The logistics company has been a long time WAC supporter.

The fundraising effort is needed to cover expenses for 30,000 additional square feet of space in the downtown Fayetteville location, as well as a new atrium, expanded lobby and other major renovations which are expected to be completed by the fall of 2016.

The Lowell-based trucking and logistics giant has also funded transportation subsidies to the Walton Arts Center over the years, according to the release.

“J.B. Hunt has been a generous supporter of transporting kids to Walton Arts Center for over two decades,” said Peter B. Lane, president and CEO of Walton Arts Center. “Their investment in the capital campaign strengthens the performing arts in NW Arkansas. Together, J.B. Hunt and Walton Arts Center will continue to positively impact the lives of families and children by increasing access to the arts in our community.”

Lane said private support is key to leveraging the generosity of J.B. Hunt Transport, the City of Fayetteville and its residents who voted in support of the fundraising efforts.

“The Walton Arts Center not only enriches the lives of children and families in Northwest Arkansas, it sculpts the creative minds of our future innovators. We could not be more pleased to provide our support and investment in this impactful initiative, assisting in the development of the arts in our own community,” said J.B. Hunt President and CEO John Roberts,

Arvest Bank promoted Jeffrey Busch to branch manager in Springdale. He will oversee operations at the 2012 South Pleasant Street branch.

Busch has four years’ experience with Arvest, most recently as an assistant manager for the past two years. 

“Jeff has proven his commitment to Arvest over the past four years with hard work and dedication,” said Jenny England, branch administrator for Arvest Bank in Springdale. “He has a strong passion to help Arvest Bank in any way he can. He is committed to ensuring his associates have the tools and skills they need to create delighted lifetime customers.”

A native of Harrison, Busch holds a bachelor’s degree from Arkansas Tech University. He is also a member of the Springdale Noon Lions Club.  

He and his wife, Kaylyn Busch, live in Farmington with their daughter, Adalyn.

Denver-based Smashburger is about to be christened in Bentonville, the first of what could be three or four are locations for the hamburger chain in the future, according to Christine Ferris, corporate spokeswoman.

Smashburger Bentonville is slated to open May 27, and will employ between 30 and 40 workers, which is typical for the chain, Ferris said. The local site is located 500 S. E. Walton Boulevard and is the first Smashburger to open in the Natural State.

“We are excited to bring Smashburger’s better burger to Arkansas and Bentonville. Satisfying and real, basic and good, affordable and fresh – Smashburger is a place with a burger soul,” said Smashburger Founder & Chief Concept Officer Tom Ryan. “With a broad menu of handcrafted burgers, chicken, salads, signature sides and handspun shakes, Smashburger has something for everyone and we are proud to be opening the first location in the area.”

Ferris did not specify where future sites of Smashburger might locate across the region, but she said the franchise owner secured the rights to four locations.

While Smashburger is national chain, the restaurant franchisees have the flexibility to tweak the menu to fit their local likes. The Bentonville Smashburger will feature a Razorback Smashburger and a Razorback chicken sandwich.