Wal-Mart is moving ahead with its first Minnesota distribution center, breaking ground on the massive $75 million project on a 150-acre site in Mankato.
The Mankato Free Press reports that construction of the facility on the city's northeast side is expected to take one year. The 454,000 square foot center, which will includes an on-site truck maintenance facility, will supply refrigerated and frozen grocery products to Wal-Mart stores in the upper Midwest. Wal-Mart plans to add a dry good distribution center to the site in the future.
The newspaper said at least 300 jobs will be created at the Mankato facility; KEYC reported there could be as many as 500 permanent new positions.
The Business Journal talked to analysts who said that with the Minnesota distribution center, Wal-Mart is putting a veritable target on the region where its chief rival is headquartered. The story said the center will allow the Arkansas-based retail giant to "...build up its store count in the Twin Cities, home of Minneapolis-based Target."
"That's going to put increased pressure on their arch-enemy, which is Target," Dave Brennan of the Institute for Retailing Excellence at the University of St. Thomas, told the Journal.
While Brennan added that "...local loyalty to Target may prevent" Wal-Mart's regional success, he sees the new Mankato distribution center making Wal-Mart more efficient. Currently Wal-Mart's regional distribution center that serves the metro is in Tomah, Wisconsin, which twice as far as the Mankato site.
Wal-Mart currently has 82 Minnesota stores if the company's 13 Sam's Clubs are included in the total. Target operates 75 Minnesota stores.
Wal-Mart purchased the Mankato site in 2005 and originally planned to open the distribution center by 2008. The project stalled and was scaled back during the recession. Wal-MartNewsNow, a site devoted to news and information for Wal-Mart suppliers, has followed the retailer's shifting plans for development.