Retail Giants Entrench in Mobile
Retail rivals Wal-Mart and Amazon are opening massive facilities just one freeway exit apart in Mobile County.
Amazon’s $30 million sortation center is set to open this holiday season, about six months after construction began.
Spring 2017, a tale of three cites. Two giants of retail, Amazon of Seattle and Wal-Mart of Bentonville, Arkansas, announce major site construction plans for Theodore — a key element of Mobile’s industrial base.
In March, 2017 Wal-Mart, with 11,695 stores in 28 countries, reported its intent to open a distribution center in Mobile’s feeder community on West Interstate 10 in Theodore. The following June, Amazon announced similar plans.
Choosing a location within 10 miles of the new Wal-Mart complex, Amazon brushed off claims that its announcement’s timing, physical proximity, and opening within a year of Wal-Mart’s were due to fierce competition between two juggernauts. But few deny each would like a bigger slice of the other’s pie.
In addition to being a brick-and-mortar monolith that brought Sears to its knees, Wal-Mart maintains e-commerce websites in 11 countries. Amazon, a name identified more with e-commerce than nearly any other, is venturing into brick-and-mortar turf, such as physical book stores and acquiring the Whole Foods store chain.
But Amazon spokespeople noted that comparing the two in Mobile definitely compares apples to oranges. The Wal-Mart Distribution Center will deliver products to regional centers, which in turn supply 800 stores throughout Alabama, Mississippi and areas to the north.
The Amazon facility, which they dub a “sortation center,” categorizes products sold on Amazon.com and consolidates shipments by region. It is projected to serve the coastal region, including parts of Florida through Louisiana. Amazon currently has 25 sortation centers in the U.S.
Regardless of function, both have Mobile business and government leaders absolutely giddy.
“This project represents a tremendous step in establishing our city as a global hub for logistics and distribution,” Mobile Mayor Sandy Stimpson said at Wal-Mart’s announcement. And at Amazon’s proclamation three months later, the mayor added, “We could not be more excited to welcome Amazon’s first major location in Alabama. Mobile is open for business and the best is yet to come.”
And it is coming soon, starting with Amazon, projected to open by year-end 2017. “Construction at both facilities has gone well with no significant delays,” says Troy Wayman, vice president of economic development at the Mobile Area Chamber of Commerce. “Both Wal-Mart and Amazon are going up without any issues that we are aware of.”
“Watching Amazon being built has been pretty phenomenal — a six-month start-to-finish turnaround,” Wayman adds.
The Amazon project itself illustrates Wayman’s “pretty phenomenal” label — a 362,000-square-foot facility with a $30 million construction price tag. With a projected opening day during this year’s holiday season, Amazon will ultimately employ about 360 workers, expanding to a thousand seasonally. “This year is slower for Mobile’s location,” notes Wayman. “It is still ramping up, but should be fully staffed and ready to go for next year. About 300 startup employees will be in place very shortly.”
“There are a lot of contributing factors that go into our thought process on where to place a new customer fulfillment or sortation center,” says Ashley Robinson, strategic communications manager for the company. “We look at the workforce and we’ve found great talent in abundance in Mobile County.”
Wayman adds, “Mobile fit Amazon’s logistics model. It is one reason why Mobile was chosen.” Other factors cited by Amazon and Wal-Mart were the city’s willingness and eagerness to work with their companies and Mobile’s location close to targeted markets.
“The biggest thing the Amazon center will do, besides the obvious jobs, is put Mobile County on a very short list of cities that could be in every home in America via the shipping label,” says County Commissioner Jerry Carl whose district is home to the new facility. “We’re selling Mobile everyday anyway we can, on new planes, shipments from overseas and on every Amazon label. This helps America and the world know that Mobile is a great place to do business.”
According to Mobile Area Chamber of Commerce figures, Amazon is projected to generate over the next 20 years some $127 million in salaries and $89 million in taxable sales and purchases here.
ABOVE Wal-Mart’s $135 million distribution center will be the fourth largest of the retail giant’s distribution facilities.
Construction of the Wal-Mart Distribution Center will take a bit longer, which is understandable, since they’re building a $135 million, 2.5 million-square-foot facility on 400 acres.
“We are on pace and within our normal timeline for hiring,” Wal-Mart spokesperson Phillip Keene says in a written statement. “We have some management in place already and our current plan is to have the majority of the initial leadership team on board by November – December, 2017.” Currently Wal-Mart expects to hire an additional 30 managers by year end, 2017. Keene added that hourly-wage employee hiring is expected to start in the January-February, 2018 timeframe.
The Wal-Mart spokesperson noted, “Among reasons we selected Mobile for this distribution center was the strong community support and workforce, and that is proving to be as great as we expected.”
Logistics was also a factor. “Wal-Mart was looking at port cities,” says Troy Wayman. “Proximity to container terminal facilities was vital, and Mobile was perfectly positioned to service its needs. The ATM Terminals made it clear it was perfectly willing to work with Wal-Mart.”
Fully operational, the Mobile Distribution Center is expected to increase local port traffic approximately 10 percent, according to a Wal-Mart press release.
“We are excited about how this facility will help us serve customers from Alabama to the Great Lakes and the economic impact it will have through local job creation and future economic development in the Mobile area,” said Jeff Breazeale, Wal-Mart’s vice president of Direct Import Logistics. “We are grateful to the State of Alabama, Mobile County, the City of Mobile, and the Alabama State Port Authority for the support we have received throughout this process, and we look forward to a strong relationship with the community for years to come.”
Wal-Mart expects to employ 550 full-time workers. The economic impact covering 20 years includes salaries totalling $568 million and taxable sales and purchases of $406 million.
The distribution center is nine times the size of Mobile’s Airbus hangar. It will be Wal-Mart’s sixth super regional facility in the United States and the fourth largest.
Emmett Burnett and Mike Kittrell are freelance contributors to Business Alabama. Burnett is based in Satsuma and Kittrell in Mobile.