Friend of foe? How Wal-Mart will change urban Honolulu.

Hawaii residents love their big box stores. Costo, Kmart, Home Depot, you name it--locals flock to their openings by the thousands.

That will likely happen again next spring, when Wal-Mart's mega-store in Honolulu's Ala Moana area opens to the public. Its retail space will exceed 315,000 square feet. That's larger than the Royal Hawaiian Shopping Center in Waikiki, or more than twice the area of the Costco in Iwilei.

The problem is these enormous retailers can trigger ripple effects proportionate to their size. The Wal-Mart superblock is particularly worrisome, because it's located in one of the most jam-packed sections of Honolulu. The 10.5-acre lot is bounded by Keeaumoku, Makaloa, Sheridan and Rycroft streets--a neighborhood that's home to Hawaii's largest shopping center, several supermarkets, thousands of apartment residents and dozens of small businesses. They will all be affected by the superblock's opening. Some of them are thrilled; others are horrified.

The project includes a double-decker retail complex, with Wal-Mart on the ground floor and membership-warehouse Sam's Club on the second, and a four-story parking structure with 1,700 stalls.

Over the past 15 years, big boxers in Hawaii have traditionally sprung up in suburban and industrial areas. Currently, Wal-Mart has two Oahu locations, Royal Kunia and Mililani. Sam's Club has one location in Pearl City. The Keeaumoku superblock defies the pattern. And that will mean big changes for urban Honolulu--opportunities for some, challenges for others.

SMALL BUSINESS

It was a tough lesson, but Hawaii retailers have learned how to co-exist with big boxers: Don't compete with 'em. Merchants that want to succeed alongside the Keeaumoku superblock should adhere to that tenet, as well.

"You can't compete with Wal-Mart on price," says Mike Hamasu, director of consulting and research at Colliers Monroe Friedlander Inc., which was Wal-Mart's broker for the superblock deal. "So you need to find a niche and have different product lines, services and retail goods that are not in competition."

That's easier said than done, considering Wal-Mart and Sam's Club sell almost everything under the sun. The Ala Moana area now contains a motley mix of small businesses--retail, services and adult entertainment. But there are a variety of non-competitive operations, Hamasu says, that could flourish near the superblock: restaurants, banking services and specialty stores, such as Trader Joe's.