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                   Walmart Case Study
                   Bellevue, King County
                   (Study commissioned and paid for by Walmart)



In	the	Eastside	region	of	King	County,	Washington,	is	Bellevue,	a	rapidly	growing	city	across	Lake	
Washington	from	Seattle.	Bellevue	started	as	a	bedroom	community,	with	most	of	its	residents	commuting	to	
Seattle	or	other	neighboring	areas	for	work.	Currently,	more	people	work	within	Bellevue	than	live	within	it,	
making	it	the	second‐largest	employment	center	in	King	County.	At	present,	the	closest	Walmart	to	Bellevue	
is	located	in	Renton.	Walmart	has	publicly	announced	two	separate	Bellevue	sites	for	new	stores:	a	65,000	
square	foot	Walmart	Neighborhood	Market	in	Kelsey	Creek	and	a	76,000	square	foot	discount	store	in	
Factoria.	The	two	locations	will	combine	to	employ	a	total	of	approximately	220	people.	

                         Table 1: Population Demographics 
                                                   2000      2005      2010      Demographics
                                                                                 Analysis	of	Bellevue’s	
    Population                                   109,569 114,748 122,363         demographic	character	reveals	
    Total Households                              45,836     48,998    50,355    a	growing	city	with	a	thriving	
    Family Households                             29,069     31,482    32,145    economy.	Over	the	previous	
                                                                                 decade,	Bellevue	has	
    Average Household Size                         2.37       2.34      2.41 
                                                                                 maintained	consistent	growth,	
    Median Household Income (2010 Dollars)       $81,594 $77,991 $80,500         increasing	its	population	by	
    Labor Force Participation Rate                67.5%      67.9%     65.8%     11.7%	from	2000	to	2010.	
    Unemployment Rate                              4.1%      5.2%      7.5% 
                                                                                Where	Bellevue	truly	shines	is	
    Source: U.S. Census Bureau                                                  in	the	fundamental	economic	
                                                                                indicators.	Employment	in	
Bellevue	has	historically	been	strong,	even	in	the	current	recession.	Bellevue’s	2010	unemployment	rate	of	
7.5%	is	substantially	better	than	the	nationwide	average	of	9.6%	during	that	time	period.	While	the	median	
household	income	of	Bellevue	residents	has	been	stagnant	relative	to	inflation,	the	city’s	average	of	$80,500	
is	well	above	the	national	average	of	$50,046.	The	area	of	highest	household	income	within	Bellevue	is	the	
Gold	Coast	region	west	of	Downtown	Bellevue,	which	includes	the	neighborhoods	of	Clyde	Hill,	Medina,	and	
Yarrow	Point.	The	regions	south	and	east	of	Downtown	Bellevue,	where	the	announced	Walmart	stores	will	
be	located,	are	generally	less	wealthy	and	more	economically	diverse.	

	

	 Hebert	Research	
  13629	NE	Bel‐Red	Road	
	 Bellevue,	WA	98005	
  425‐643‐1337	
	 www.hebertresearch.com	
                                                                  Figure 1: Taxable Retail Sales
                                                                                                                        Total Retail Sales
                                                                                                                        Figure	1	charts	the	trend	in	
                                              130
                                                                                                                        overall	retail	sales	in	Bellevue,	
                                              125
                                                                                                                        King	County,	and	the	entire	
                                                                                                                        state	of	Washington,	adjusted	
      Index 2004 = 100 (Inflation-adjusted)




                                              120
                                                                                                                        for	inflation,	and	indexed	to	
                                              115
                                                                                                                        2004.	It	also	displays	the	per	
                                              110                                                         Bellevue      capita	personal	income	(PCPI)	
                                              105                                                         King County   trend,	which	is	an	indicator	of	
                                              100                                                         Washington    purchasing	power.	
                                                                                                          PCPI
                                               95

                                               90
                                                                                Bellevue	displayed	a	strong	
                                                                                retail	market	in	the	middle	part	
       85
                                                                                of	the	decade,	far	outpacing	the	
       80
                                                                                rest	of	King	County	and	
              2004       2005     2006       2007      2008     2009       2010
                                                                                Washington	State.	Growth	in	
 Source: Washington State Department of Revenue, Bureau of Economic Analysis    taxable	sales	increased	rapidly	
until	the	onset	of	the	global	recession,	which	began	near	the	end	of	2007.	Since	then,	taxable	retail	sales	have	
dipped	below	2004	levels,	but	the	decline	has	slowed	substantially,	and	hopes	for	recovery	is	in	sight.	
Unsurprisingly,	the	decay	in	retail	sales	corresponds	to	a	negative	trend	in	consumer	purchasing	power	that	
began	in	2007.	

	

                                                            Figure 2: Taxable Sales at Retail Stores                    Sales at Retail Stores
                                                                                                                        Taxable	sales	occurring	at	
                                              115                                                                       dedicated	retail	locations	follow	
                                                                                                                        a	similar	overall	pattern,	with	
      Index 2004 = 100 (Inflation-adjusted)




                                              110
                                                                                                                        growth	in	the	mid‐2000s	
                                              105
                                                                                                                        followed	by	a	steep	decline	
                                                                                                                        beginning	in	2007.	By	this	
                                              100
                                                                                                          Bellevue      metric,	Bellevue’s	retail	growth	
                                                                                                          King County
                                                                                                                        tracks	very	closely	to	King	
                                                                                                          Washington
                                               95                                                                       County	and	the	state	as	a	whole.	
                                                                                                          PCPI
                                                                                                                        However,	the	data	offers	reason	
                                               90
                                                                                                                        for	optimism,	as	a	rebound	in	
                                               85
                                                                                                                        sales	from	2009	to	2010	
                                                                                                                        signifies	a	reversal	of	the	trend	
                                               80                                                                       and	a	movement	towards	
                                                    2004   2005    2006    2007    2008    2009    2010                 renewed	growth	in	the	future.	
    Source: Washington State Department of Revenue, Bureau of Economic Analysis

	

	

	

	

	



Walmart	Case	Study	                                                                                                                                 Page	2	
Bellevue,	King	County	                                                                                                                     Hebert	Research	
                                                                                            Figure 3: General Fund Revenues
                                                                                                                                                                       City Finances
                                                                                                                                                                       The	city	of	Bellevue	has	
                                                                       $120
                                                                                                                                                                       managed	in	recent	years	
                                                                                                                                                                       to	increase	its	revenues,	
                                                            Millions




                                                                       $100
                                                                                                                                                                       despite	the	national	
                                                                                                                                                                       economic	crisis.	Bellevue’s	
      Revenue in 2004 Dollars




                                                                       $80
                                                                                                                                                                       total	general	fund	
                                                                                                                                                                       revenues	have	increased	
                                                                       $60
                                                                                                                                                                2004   from	$244	million	in	2004	
                                                                                                                                                                2010   to	an	inflation‐adjusted	
                                                                       $40
                                                                                                                                                                       $261	million	in	2010,	
                                                                                                                                                                       carried	mostly	by	
                                                                       $20
                                                                                                                                                                       increased	charges	for	
                                                                                                                                                                       services.	
                                                                        $0
                                                                                      Bellevue’s	sales	tax	
                                                                              Property Taxes   Sales Taxes   Charges for       Business Tax    Other
                                                                                      revenue	has	decreased	  Services                        Revenues
 Source: Washington State Auditor's Office                                            slightly,	but	has	remained	
                                                                                      largely	stable,	considering	
the	overall	economic	climate	and	decline	in	taxable	retail	sales.	The	likely	cause	of	this	stability	is	a	2008	
change	to	Washington	State’s	sales	tax	rules.	Effective	July	1,	2008,	Substitute	Senate	Bill	5089	changed	sales	
tax	collection	from	an	origin‐based	system	to	a	destination‐based	system.	In	practical	terms,	this	change	
required	retailers	to	collect	sales	tax	on	shipped	goods	based	on	the	destination	of	the	shipment,	rather	than	
the	origin,	allowing	the	state	to	collect	sales	taxes	on	sales	to	Washington	consumers	from	out	of	state	
businesses,	increasing	government	revenues	and	leveling	the	playing	field	for	in‐state	retailers.	The	bill	has	
worked	to	combat	the	competitive	pricing	advantages	of	out‐of‐state	online	and	mail‐order	retailers,	
creating	a	healthier	environment	for	in‐state	brick‐and‐mortar	retailers.	

	

                                                                                                                                                                   Workers and Wages
                                                                             Figure 4: Average Wages for General Merchandise Stores                                Wages	for	employees	at	King	
                                                                                                                                                                   County	general	merchandise	
        Avg. Gen. Merchandise Store Wages in 2004 Dollars




                                                            $30,000                                                                                                stores	have	been	consistently	
                                                                                                                                                                   higher	than	for	the	state	as	a	
                                                            $25,000                                                                                                whole,	reflecting	the	county’s	
                                                                                                                                                                   role	as	the	state’s	premier	hub	
                                                            $20,000                                                                                                of	urbanization	and	business.	
                                                                                                                                                  King County      For	most	of	the	past	decade,	
                                                            $15,000
                                                                                                                                                  Washington       wages	in	King	County	have	
                                                                                                                                                                   been	stagnant	relative	to	
                                                            $10,000                                                                                                inflation,	with	periodic	gains	
                                                                                                                                                                   and	losses	occurring	in	equal	
                                                               $5,000                                                                                              measure.	

                                                                        $0                                                                                         	
                                                                              2000   2001   2002   2003   2004   2005   2006    2007   2008
    Source: Washington State Department of Employment Security                                                                                                     	

	



Walmart	Case	Study	                                                                                                                                                                        Page	3	
Bellevue,	King	County	                                                                                                                                                            Hebert	Research	
 Economic Leakage
 Table	2	displays	current‐year	retail	sales	and	consumer	expenditures	for	Bellevue	separated	by	category	of	
 good.	Comparing	these	numbers	serves	as	an	indicator	of	economic	leakage:	higher	sales	than	expenditures	
 indicates	that	the	money	brought	in	by	consumers	living	elsewhere	exceeds	the	money	spent	by	Bellevue	
 residents	at	locations	outside	of	the	city.	For	most	types	of	goods,	the	city	of	Bellevue	displays	a	large	retail	
 sales	surplus.	The	city	has	a	thriving	retail	market,	driven	both	by	destination	shopping	and	the	large	
 number	of	commuters	working	in	Bellevue.	A	retail	sales	deficit	indicates	economic	leakage	–	these	are	
 goods	that	are	underserved	in	the	local	market.	In	Bellevue,	demand	is	underserved	for	alcoholic	beverages	
 and	home	improvement	supplies.	
                               Table 2: Retail Economic Leakage by Type of Good 
                                                          Sales          Expenditures 
                                                        (Supply)           (Demand)      Surplus/Deficit
Groceries & Other Foods                              $524,988,374        $383,877,359     $141,111,015  
Meals & Snacks                                       $221,023,984        $218,928,652      $2,095,332  
Alcoholic Drinks                                      $9,517,953          $11,593,367     ($2,075,414) 
Packaged Liquor/Wine/Beer                            $57,615,163          $61,854,429     ($4,239,266) 
Cigars, Cigarettes, Tobacco, Accessories             $48,658,093          $35,240,098     $13,417,995  
Drugs, Health Aids & Beauty Aids                     $322,438,216        $200,096,267     $122,341,949  
Soaps, Detergents & Household Cleaners                $8,288,560           $4,764,765      $3,523,795  
Paper & Related Products                             $26,759,909          $19,415,749      $7,344,160  
Men's Wear                                           $94,723,057          $62,928,193     $31,794,864  
Women's, Juniors' & Misses' Wear                     $153,541,466         $89,677,982     $63,863,484  
Children's Wear                                      $64,884,729          $36,336,933     $28,547,796  
Footwear                                             $46,942,250          $32,514,125     $14,428,125  
Sewing, Knitting & Needlework Goods                  $15,052,835           $5,779,418      $9,273,417  
Curtains, Draperies, Blinds, Slipcovers              $90,358,957          $32,557,618     $57,801,339  
Major Household Appliances                           $19,799,570          $15,988,402      $3,811,168  
Small Electric Appliances                             $6,765,700           $4,505,180      $2,260,520  
Televisions, VCRs, Video Cameras                     $27,071,788          $19,458,551      $7,613,237  
Audio Equipment, Musical Instruments                 $30,833,862          $27,943,833      $2,890,029  
Furniture & Sleep Equipment                          $80,921,825          $54,380,234     $26,541,591  
Flooring & Floor Coverings                           $11,829,772          $11,134,033       $695,739  
Computer Hardware, Software & Supplies               $116,223,000         $45,785,613     $70,437,387  
Kitchenware & Home Furnishings                       $106,129,204         $53,362,335     $52,766,869  
Jewelry                                              $59,381,591          $47,667,210     $11,714,381  
Books                                                $65,607,062          $36,097,502     $29,509,560  
Photographic Equipment & Supplies                    $13,021,230           $5,848,331      $7,172,899  
Toys, Hobby Goods & Games                            $57,906,663          $33,781,747     $24,124,916  
Optical Goods                                        $14,943,018           $9,374,359      $5,568,659  
Sporting Goods                                       $43,768,340          $30,045,156     $13,723,184  
Hardware Tools, Plumbing, Electrical                 $10,740,589          $13,733,198     ($2,992,609) 
Lawn, Garden, and Farm Equipment & Supplies          $27,312,060          $28,348,683     ($1,036,623) 
Lumber & Building Materials                           $6,641,084           $9,096,661     ($2,455,577) 
Paint & Sundries                                      $4,896,568           $4,332,589       $563,979  
Pets, Pet Foods & Pet Supplies                       $25,591,686          $20,702,571      $4,889,115  
All Other Merchandise                                $147,239,006        $137,193,348     $10,045,658  
Source: Nielsen Claritas 
 Walmart	Case	Study	                                                                                           Page	4	
 Bellevue,	King	County	                                                                               Hebert	Research	
Table	3	shows	current‐year	retail	sales	and	consumer	expenditures	for	Bellevue	and	the	surrounding	trade	
area.	Table	4	show	current‐year	retail	sales	and	expenditures	at	general	merchandise	stores	only.	The	
selected	trade	area	is	mapped	in	Figure	5	on	the	following	page.	

                Table 3: Total Retail Economic Leakage by ZIP                  The	area	with	by	far	the	largest	retail	
           Sales (Supply)       Expenditures (Demand)       Surplus/Deficit    sales	surplus,	both	in	total	and	for	
                                                                               general	merchandise	stores,	is	ZIP	
 98004     $959,296,394               $513,869,477           $445,426,917  
                                                                               code	98057,	which	includes	
 98005  $1,035,138,361                $318,757,936           $716,380,425  
                                                                               downtown	Renton.	This	area,	near	the	
 98006     $409,584,089               $679,365,894          ($269,781,805)     intersections	of	I‐405	and	multiple	
 98007     $479,912,273               $387,281,833           $92,630,440       major	state	highways,	contains	a	
 98008     $218,145,857               $408,964,708          ($190,818,851)     heavy	retail	presence,	including	
 98027     $660,189,826               $490,491,381           $169,698,445      numerous	shopping	centers,	a	Fred	
 98029     $217,962,019               $359,029,463          ($141,067,444)     Meyer,	and	a	Walmart	discount	store.	
 98033     $642,014,576               $644,556,411           ($2,541,835)      This	area	will	be	a	primary	competitor	
                                                                               for	the	announced	Factoria	Walmart	
 98038     $138,384,191               $503,882,152          ($365,497,961) 
                                                                               location,	drawing	customers	from	the	
 98040     $242,662,781               $467,297,152          ($224,634,371) 
                                                                               large	region	south	of	Bellevue	and	
 98052  $1,179,441,465                $986,912,468           $192,528,997      north‐northeast	of	downtown	Renton.	
 98055     $149,377,837               $333,128,174          ($183,750,337) 
 98056     $157,481,490               $496,819,393          ($339,337,903)     The	areas	of	the	two	new	Walmarts,	
 98057  $1,868,947,123                $149,801,513          $1,719,145,610     ZIP	codes	98006	and	98007,	both	
 98058     $151,567,079               $649,971,769          ($498,404,690)     display	a	retail	deficit	in	the	general	
 98059     $326,239,670               $521,091,131          ($194,851,461) 
                                                                               merchandise	category,	indicating	an	
                                                                               underserved	market	and	an	
 98075      $89,252,634               $352,774,902          ($263,522,268) 
                                                                               opportunity	for	mutual	benefit	for	
 Source: Nielsen Claritas                                                      Walmart	and	the	community.	The	
                                                                               Factoria	region	(ZIP	code	98006)	in	
      Table 4: Retail Economic Leakage at General Merchandise Stores           particular	has	very	high	consumer	
           Sales (Supply)      Expenditures (Demand)     Surplus/Deficit       spending	that	is	not	being	captured	by	
 98004     $176,632,358             $74,290,012           $102,342,346         the	local	market.	
 98005      $55,810,836             $45,880,819             $9,930,017  
                                                                               Aside	from	Renton,	the	regions	with	
 98006      $71,752,623             $97,934,216           ($26,181,593) 
                                                                               the	greatest	retail	surplus	are	
 98007      $47,129,101             $57,327,682           ($10,198,581)        Redmond	and	the	areas	surrounding	
 98008       $3,049,826             $59,192,957           ($56,143,131)        downtown	Bellevue,	north	and	west	
 98027     $127,227,921             $70,373,400            $56,854,521         of	the	announced	Walmart	locations.	
 98029      $47,359,979             $53,091,502            ($5,731,523)        The	existence	of	these	areas	of	
 98033      $11,805,780             $92,619,147           ($80,813,367)        destination	shopping	along	major	
 98038       $5,309,477             $72,260,425           ($66,950,948)        interstate	corridors	suggests	that	
 98040           $0                 $67,552,752           ($67,552,752)        Walmart’s	primary	market	beyond	
                                                                               the	immediate	localities	will	be	the	
 98052     $372,319,989            $143,516,922           $228,803,067  
                                                                               regions	south	and	east	of	Bellevue.	
 98055      $11,395,711             $49,014,471           ($37,618,760) 
 98056      $72,249,499             $43,213,412            $29,036,087         	
 98057     $446,008,333             $22,486,144           $423,522,189  
 98058       $4,781,920             $93,944,904           ($89,162,984)        	
 98059      $44,994,444             $74,429,585           ($29,435,141) 
 98075       $4,842,324             $51,217,338           ($46,375,014) 
 Source: Nielsen Claritas                                                      	



Walmart	Case	Study	                                                                                            Page	5	
Bellevue,	King	County	                                                                                Hebert	Research	
The	trade	area	is	defined	by	ZIP	code.	Each	ZIP	code	included	in	the	leakage	analysis	is	marked	with	a	red	
pin,	and	the	two	Walmart	locations	are	marked	with	yellow	squares.	The	Eastside	region	of	King	County	
displays	significant	localized	disparity	in	average	income.	Rather	than	a	large,	consistent	area	of	generally	
similar	income	and	development,	low‐	and	high‐income	communities	exist	side	by	side	within	a	variety	of	
urban	and	suburban	environments.	As	such,	the	trade	area	cannot	be	defined	by	distance	alone.	ZIP	codes	
are	selected	based	on	both	proximity	to	the	announced	Walmart	locations	and	considerations	of	income	and	
competition.	Areas	north	and	east	of	Bellevue	contain	a	high	concentration	of	existing	retail	establishments,	
minimizing	the	likelihood	that	residents	of	more	distant	regions	will	travel	through	the	existing	retail	centers	
to	shop	at	Walmart.	As	such,	the	trade	area	only	extends	to	the	immediate	vicinity	in	those	directions.	The	
areas	to	the	south	of	downtown	Bellevue	are	generally	less	developed	and	lower‐income,	indicating	a	
stronger	likelihood	to	patronize	the	new	Walmart	locations.	Thus,	the	trade	area	extends	farther	in	this	
direction.	

                                                       Figure 5: Bellevue/Factoria Trade Area 

Table 5: Map Legend 
A              98004 
B              98005 
C              98006 
D              98007 
E              98008 
F              98027 
G              98029 
H              98033 
I              98038 
J              98040 
K              98052 
L              98055 
M              98056 
N              98057 
O              98058 
P              98059 
Q              98075 
	

	

	

	

	

	

	

Walmart	Case	Study	                                                                                       Page	6	
Bellevue,	King	County	                                                                           Hebert	Research	
	

	

Economic Impact of Walmart
              Table 6: Total Employment Earnings                               The	new	Walmart	stores	will	have	an	immediate	
                                                                               direct	impact	on	the	economy	by	creating	jobs.	
    Average Hourly Wage                 $                             12.79    Walmart	projects	that	the	two	new	stores	will	
    Hours per Week                                                       40    combine	to	employ	a	total	of	approximately	220	
    Weeks per Year                                                       52    people.	This	new	employment	will	cause	more	
                                                                               money	to	flow	through	the	economy,	creating	an	
    Workforce                                                        132 
                                                                               even	stronger	impact	that	can	be	estimated	using	
    Total Employment Earnings           $                     3,511,622        IMPLAN	economic	modeling.	
                                    
                                                                               By	employing	approximately	60%	of	its	workforce	
               Table 7: Impact of Earnings Spent                               as	full‐time,	or	about	132*	employees	working	at	an	
    Direct Earnings Spent               $                    3,450,010         average	wage	of	$12.79	per	hour,	an	estimated	of	
    Indirect Effect                     $                    1,328,446         $3,511,622	per	year	in	wages	will	be	paid	to	local	
                                                                               consumers.	The	majority	($3,450,010)	of	this	
    Induced Effect                      $                    1,210,125         money	will	be	spent	in	the	local	market.	This	will	
    Total Impact on Output              $                    5,988,581         create	an	indirect	effect	of	$1,328,446	per	year	
                                                                               from	inter‐industry	purchases	stimulated	by	the	
                                                                               increased	consumer	demand.	This	additional	
                  Table 8: Employment Effect                                   money	in	the	economy	will	cause	increased	
    Direct Employment                                                132       household	income	and	associated	increases	in	
    Indirect Effect                                                      8     spending,	creating	an	induced	effect	of	a	further	
                                                                               $1,210,125	million	per	year.	In	total,	the	jobs	
    Induced Effect                                                       9     created	by	the	Bellevue	Walmarts	will	add	an	
    Total Added Employment                                           149       estimated	$5,988,581	per	year	to	the	local	
                                                                               economy.	

Walmart’s	two	new	Bellevue	locations	will	also	have	additional	impacts	on	the	local	economy.	Indirect	
effects	will	create	8	more	jobs,	and	induced	effects	will	employ	another	9	people.	This	amounts	to	another	17	
jobs.	Combined	with	the	direct	employment	of	workers	at	Walmart,	the	two	new	Walmart	stores	will	create	a	
total	of	149	jobs	in	the	Bellevue	area,	a	significant	step	forward	in	otherwise	harsh	economic	times.	

*As	of	October	31,	2011	(End	of	Q3),	according	to	Walmart,	the	average	wage	for	regular,	full‐time	hourly	associates	in	
Washington	is	$12.79	per	hour	(Walmart	Discount	Stores,	Supercenters,	and	Neighborhood	Markets).	Additionally,	eligible	
associates	receive	an	annual	incentive	based	on	the	company	performance.	The	132	associates	figure	(Workforce)	is	an	
estimate,	based	on	Walmart	employing	approximately	60%	full‐time	hourly	associates	at	its	stores.	In	addition	the	Total	
Employment	Earnings	figure	does	not	include	part‐time	and	management‐level	associates’	wages.	

	




Walmart	Case	Study	                                                                                                         Page	7	
Bellevue,	King	County	                                                                                             Hebert	Research	

				
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