Economic/Small Business

Examples & Resources

• What Happened When Wal-Mart Came To Town? (1996)
• Wal-Mart Imports From China, Exports Ohio Jobs (2005)
• Wal-Mart’s Impacts On the American Supermarket Industry. (2004)
• Wal-Mart Effect (2000)
• Wal-Mart and County-Wide Poverty (2004)
• View All

Since 1962, the Wal-Mart Dust Machine has done damage in every state in the country. Wal-Mart has cannibalized mom and pop shops on the bottom, to the mid-level regional chains, to the very top national chains. Local businesses are known for their better service and higher quality merchandise, but too often cannot compete against Wal-Mart’s harmful low-pricing scheme.

Local Community Revenue

Local businesses generate substantially greater economic impact in a community than large chains like Wal-Mart. One study found that local businesses spend 53% of their revenues within the local and state economies; whereas big box stores, like Wal-Mart, spend just 14% within the local economy.

Killing the Competition

Local businesses simply can’t keep up with Wal-Mart’s bargain pricing.

When Iowa State University Professor Ken Stone examined the sales changes in Iowa small towns from 1983 to 1993, he discovered “a huge shift of sales to larger towns and cities, with substantial amounts captured by mass merchandise stores.” Stone estimates that the total number of businesses lost in small towns and rural areas was 7,326 in the decade studied. Iowans spent $425 million more at discount stores, but $153 million less at variety stores, $129 million less at grocery stores, $94 million less at hardware stores, $47 million less at men’s and boys apparel stores, and so on. In the 11 store types studied, businesses lost more than $603 million in sales. In this ten year period, Iowa lost:

• 555 Grocery stores 

• 298 Hardware stores 

• 293 Building Supply Stores 

• 161 Variety Stores 

• 158 Women’s Apparel stores 

• 153 Shoe Stores 

• 116 Drug Stores 

• 111 Men’s and Boys Apparel stores

Retail Saturation

The lesson in sprawl-math is inevitable. When you oversupply an area with retail glut, you don’t create jobs, you destroy them.

Consider the example of the regional chain store Caldor’s, which imploded in 1999. Industry analysts say it was expected: Caldor’s was losing money to Wal-Mart, had fallen into Chapter 11 territory since 1995, and never recovered. 22,000 workers took home pink slips for their trouble. 145 stores in nine states were put up for lease. After 48 years, and annual sales of $2.49 billion, the going out of business sales at Caldors began. It would take more than 100 Wal-Mart Supercenters just to break even with the 22,000 jobs that went down with Caldors.