A Nashville-based company that caters to working farmers has forged a highly successful retail business over the past 86 years. Now this firm is betting big on a small town in central Arkansas.
Tractor Supply Co., a $14.6 billion retail chain with 2,233 stores in 49 states, opened its 10th and largest distribution center on May 14 in Maumelle, a city of fewer than 20,000 people in the Little Rock metropolitan area. The 1.1-million-sq.-ft. plant represents a capital investment of $175 million and creates more than 500 jobs for local workers, the company said.
Tractor Supply is no stranger to Arkansas. The company opened its first Arkansas store in Pulaski County in 1960, and today TSC has 39 stores throughout the state. TSC also owns and operates eight Petsense by Tractor Supply stores in Arkansas.
Colin Yankee, chief supply chain officer for TSC, tells Site Selection that Maumelle beat out a host of sites in the south-central U.S. for this new plant. Jones Lang LaSalle assisted TSC in the site search.
“When we are looking at distribution center sites, we are looking for the long-term perspective of 25 to 30 years,” Yankee says. “We look at our existing store base, our future store base, real estate costs, roads and highways, traffic congestion, and utilities like gas, water, sewer and electric power. Once those base criteria are met, we look at workforce skills and quality, the cost of labor, and quality-of-life attributes like recreation, housing and schools. We want to be able to attract people to move to that area.”
Four-State Search Ends in Arkansas
Yankee says TSC found all that and more in Maumelle.
“We looked across four states: Arkansas, Alabama, Mississippi and Louisiana. We filtered the search based on the data,” he notes. “We visit the sites and then narrow the list down to the finalists. We meet with local leaders, fire and police officials, etc. We network with managers of other companies in the area. We meet with local real estate agents to assess housing and find the neighborhoods where our people will live. We go to schools and meet with local colleges. We look at local traffic and weather patterns. It comes down to different factors.”
One of those factors is the available incentives package. “For us, state and local incentives are important in practice and principle,” says Yankee. “They can greatly influence the overall cost. Operating costs can be in the tens of millions of dollars per year. Incentives signal to us the openness of the state and community to the jobs and what we bring. The Arkansas Economic Development Commission was very helpful. No amount of incentives can ever outweigh all the other factors, but they are important.”
The new logistics complex in Maumelle will serve 250 stores in the south-central U.S. and is designed to accommodate growth. “We are adding 80 stores this year and will eventually grow to 3,000 stores,” says Yankee. “We started with our first store in Minot, North Dakota, in 1939, and now we are in every state but one.”
Readers may be familiar with Tractor Supply because of country music sensation Lainey Wilson. She has appeared in various commercials for TSC and partners with the company in mentoring emerging country music artists. “She grew up riding horses in Louisiana and shopping at Tractor Supply,” says Yankee. “She is the perfect ambassador for our brand.”
Yankee says the town of Maumelle fits that brand. “Maumelle is a community where many people live the lifestyle that we cater to — hard, physical work with a lot of heavy lifting. For us, 50% of the leadership team for this new center will be hired from the local community.”
The company is not done growing, either, he adds. With total sales doubling in the last six years, “we have plans to open another distribution center in the Pacific Northwest. We have a site that we are doing due diligence on now. We just have not announced it yet.”
Tax Cuts Grab CEOs’ Attention
Clint O’Neal, executive director of the Arkansas Economic Development Commission, says that TSC is, in many ways, emblematic of the Arkansas success story. “Arkansas is full of salt-of-the-earth people who care about each other,” he says. “People have a need to be in a good community, and that is exactly what we offer in Arkansas.”
He adds that companies like TSC are attracted to Arkansas because the state has a governor who believes in lower taxes, less burdensome regulations and more freedom for both individuals and businesses.
“The last round of tax cuts took us to 3.9% at the top end rate for personal income taxes and 4.3% for corporate income taxes,” O’Neal says. “That is down from 7% and 6.5% before the cuts started. We just had a $700 million budget surplus after having a $1 billion surplus. We still had a very healthy state budget even after these generous tax cuts.”
O’Neal says that is the governing philosophy of Gov. Sarah Huckabee Sanders, and that it will continue.
“This is why companies like Walmart, Tractor Supply and others are investing and re-investing in Arkansas,” he says. “Tractor Supply is an economic development success story for Maumelle. The city had undertaken an initiative to make that site a certified site for development. Our pipeline for the remainder of 2024 is strong. We will have some major announcements across the state in the coming months. Many of those will take place in rural communities.”
