O.C. Merchants Preparing for Battle With Wal-Mart : Retailing: Consumers are expected to welcome giant chain, but soon-to-open stores worry some competitors.

Taneka Hill said she always enjoyed Wal-Mart’s brand of customer service when she shopped the retail chain in Arizona. Now the 20-year-old Anaheim resident hopes to land a job as a department manager when Wal-Mart opens its first Orange County store early next year at Anaheim Plaza.

With that in mind, Hill took a number on Monday and got in line where more than 1,400 other job-seekers have applied in the past week.

Here comes Wal-Mart, the nation’s biggest retailer, charging headfirst into Orange County. Employment interviews have begun and construction is underway at Anaheim Plaza, Foothill Ranch Towne Center and the Marketplace at Laguna Niguel. And competitors--large and small--are getting ready for battle.

“Consumers will welcome Wal-Mart with open arms and Wal-Mart will have the red carpet out for consumers,” says Kurt Barnard, publisher of Barnard’s Retail Marketing Report in Berkeley Heights, N.J. “Wal-Mart is a formidable competitor with a unique way of proving that it’s got the best stores around.”

County merchants have thus far escaped head-to-head competition against Wal-Mart, which since its founding 32 years ago has become America’s largest retailer--with annual revenue of nearly $100 billion and more than 2,000 stores.

Orange County got its first taste of Wal-Mart’s style early this year when the discounting giant, based in Bentonville, Ark., acquired a handful of Pace membership warehouse stores and reopened them as Sam’s Club locations. Wal-Mart’s membership club arrival was blunted, retail observers suggest, because the company converted existing stores rather than pumping up competition further by building its own locations.

Wal-Mart has generated fierce opposition in some municipalities, particularly in smaller towns in the South and Midwest, where the giant retailer’s presence can spell doom for less sophisticated retailers. But the chain’s arrival isn’t expected to generate the small-town Angst that cartoonist Garry Trudeau skewered in a recent series of Doonesbury cartoons.

“If you’re in a tiny, New England town you could be very much concerned about Wal-Mart arriving,” Barnard said. “But if you’re in the tiny town called L.A., where you’ve got lots of big retailers . . . it’s not such a drastic change in culture.”

That’s not to say Orange County retailers aren’t worried.

Mike Neben has weathered recessions, competition and ever-changing interior decorating trends for more than two decades. So the picture-frame shop owner said he is not going to throw in the towel just because Wal-Mart is opening across the street.

“The rotten economy over the last four years made me work harder, but it didn’t cause me to close my doors,” said Neben, owner of Prestige Picture Frames on Lincoln Avenue near Anaheim Plaza. “So why should additional competition be any problem?”

Neben said there “very definitely is concern among some retailers about Wal-Mart’s arrival. . . . But that’s only among people who don’t understand niche marketing. Those are people who need to go back to school to learn how to position themselves.”

Neben and other small retailers have known for two years that redevelopment officials in Anaheim hoped to lure Wal-Mart to Anaheim Plaza, just a stone’s throw from Neben’s storefront. The shopping center, which opened in 1955 and had fallen on hard times, is being rebuilt with Wal-Mart as a key tenant.

The refurbished $60-million, 400,000-square-foot mall will mirror the look and feel of the colorful Tustin Marketplace. Other key tenants at Anaheim Plaza, including Ross Dress for Less, Mervyn’s, Comp USA and Old Navy Clothing Co., are expected to have their stores ready for a grand opening on Friday. Wal-Mart will open its store in January or February.

Rather than go head-to-head with the discounter, Neben said he has gradually repositioned his business, moving away from off-the-shelf frames to custom-made products.

In July, Neben changed the name of his company to Prestige Picture Frames from Discount Picture Frames. He is negotiating with vendors for better prices on specialty items that he hopes will give him an additional edge.

And Neben is emphasizing the fact that, as a specialty store, he can provide better customer service than Wal-Mart. “If you’ve got a 17-by-22-inch poster and you go to Wal-Mart, you’ll get an 18-by-24 or 16-by-20 frame,” Neben said. “What we’ll give you, often for less than you can buy their frame, is a custom frame.”

Neben’s strategy makes sense, according to retail industry observers who have watched Wal-Mart move across the country, first into the nation’s rural areas with few major department stores and now as it begins to infiltrate Southern California’s large urban centers.

Wal-Mart prides itself on warm customer relations. It traditionally stations an employee at the front door to greet shoppers. But it is prices that drive the retailer’s success. The chain is most popular with working women in their 30s, according to Women’s Wear Daily magazine. Its merchandise appeals heavily to households with incomes of $25,000 to $35,000 and with children younger than 18.

Wal-Mart’s discounted prices will appeal to shoppers in recession-weary Southern California, but the chain isn’t for everyone.

“To be honest, there are probably things in (Wal-Mart) for my grandchildren,” said Fran Wiseman, who has lived in the shadow of Anaheim Plaza for 31 years. “But I’ve been in a Wal-Mart before and it didn’t excite me.”

Wherever Wal-Mart goes, the company uses an incredibly efficient distribution, sales and marketing system to force competitors to follow suit or close their doors.

Shortly after Wal-Mart entered Rialto in San Bernardino County, several years ago, Kmart remodeled its tired old store and held a grand reopening. Just months after Wal-Mart opened its Colton store, Sprouse-Reitz Stores, a Portland-based retailer, closed a nearby location.

Local business executives agree that Wal-Mart’s arrival in Southern California’s heavily populated neighborhoods won’t be as disruptive as in small towns.

“I think people here are going to be happy as the dickens,” said Jay Walton, acting manager of Anaheim’s Chamber of Commerce. “There’s a different kind of competition here than in the small towns of the Midwest. I haven’t felt any of the anger that you read about when Wal-Mart opens in other places.”

“I see it as a positive development,” said Mary Kluver, president of the Laguna Niguel Chamber of Commerce and manager of a local Mariners Bank branch. “It gives us something we don’t have in this city. And we’re excited to be chosen as one of the first locations to open in Orange County.”

Retailers theorize that Wal-Mart’s arrival in Orange County has not caused controversy because local consumers long have been shopping in “big box” stores, including Home Depot, Irvine-based HomeBase, Target, Kmart, Price-Costco and the other warehouse-style operators. Those chains are called big-box operations because the stores are so large; Wal-Mart’s Orange County stores, for example, each will cover 146,000 square feet.

“Don’t get me wrong, any time someone opens up he splits the pie that much more and we’re all going to be affected a bit,” said Steve DeNault, owner of five DeNault’s True Value Hardware stores in Orange County, including one near the planned Wal-Mart in Laguna Niguel. “But it’s not like we’re some small town in the Midwest and everyone’s got their eye on Wal-Mart.”

Merchants who are located near Wal-Mart stores anticipate that they will have a chance to capitalize on customer traffic generated by the new Wal-Mart stores.

And, unlike smaller towns, few Orange County cities have traditional downtown retail districts that would be threatened by Wal-Mart’s brand of retailing.

Many retail observers suggest that Wal-Mart’s true competition in Southern California will be other big-box operators, including Kmart, JC Penney Co., Target and the warehouse clubs. But that doesn’t mean small businesses can afford to ignore Wal-Mart.

Cheryl Moore, owner of the Something Moore dress shop in Laguna Niguel, will browse the new Wal-Mart when it opens early next year to determine whether the chain sells anything close to what her upscale shop offers. When another “big box” store recently opened, Moore saw a designer coat hanger that she sells for $13 on sale for $7.50. Unable to compete on price, she stopped offering the hanger.

Wal-Mart generally doesn’t sell the costlier dresses that Something Moore offers, but Moore knows “that there might be some things that I can’t sell anymore.”

DeNault, who has survived and prospered despite the appearance of the large home supply stores, advises retailers to stick to what they do best.

“What you do to survive with Wal-Mart in town is to continue to service your particular customer,” DeNault said. “You can’t be something for everyone, that’s not how you compete with the likes of Wal-Mart. Your store can survive if you do your niche right.”

* O.C. RETAILERS HIRING: Thousands of jobs are available at new or expanded stores. D1

Wal-Mart Locations in O.C.

* Anaheim Plaza

Mervyn’s, Comp USA and Ross Dress for Less are among the tenants already open in newly rebuilt Anaheim Plaza, at 500 N. Euclid St. in Anaheim. Anaheim Plaza, built in 1955, fell upon hard times in recent years and was knocked down last year to make way for the new stores. A “grand reopening” ceremony will be held Friday. The Wal-Mart store will open in January or February.

* Foothill Ranch Towne Center

HomeBase, Target and Mervyn’s already have opened their doors at Foothill Ranch Towne Center, a new “power center” being developed in south Orange County. The shopping center is located in an unincorporated county pocket about five miles northeast of the El Toro “Y.” When completed in 1995, the 1.3-million-square-foot shopping center will be the county’s second-largest retail center, behind Costa Mesa’s South Coast Plaza. Wal-Mart is expected to open at Foothill Ranch Towne Center in January or February.

* Marketplace at Laguna Niguel

Home Express, Old Navy Clothing and Mervyn’s are already open at the Marketplace at Laguna Niguel. Wal-Mart and the mall’s developer declined to say when the Wal-Mart, which is now under construction, would open.