Ed Morrison · Impact of Wal-Mart on urban markets

January 10th, 2010

The opening of a Walmart store in Chicago’s Austin neighborhood in 2006 has not increased retail activity or employment opportunities, according to a study by researchers at the University of Illinois at Chicago and Loyola University Chicago.

The study found that stores near Walmart were more likely to go out of business, eliminating the equivalent of about 300 full-time jobs — about as many as Walmart initially added to the area.

The findings support the contention that urban Walmart stores absorb sales from other city stores without significantly expanding the market, said study co-author David Merriman, head of the UIC department of economics and professor of public administration.

Walmart Does Not Boost Employment or Retail Sales

You can download a copy of the report here.

Last 5 posts by Ed Morrison

Random Posts

Category: BFD
3 Comments »

3 Responses to “Impact of Wal-Mart on urban markets”

  1. TimFerris Says:
    January 10th, 2010 at 12:41 pm

    We’ve been aware that Walmart kills local small businesses since we began the dialogue over Steelyard Commons. One thing we haven’t done is to quantify the losses, first of all, to the individuals who lose their livelihood and then, second, what we through our governments pay to generate those net losses in the way of incentives, discounts, abatements, or bribes given Walmart or the builder/developer of the property Walmart leases. We are transferring our community’s pooled dollars to WalMart, WalStreet, and Wally the Developer, who may indeed be a contributor to the campaigns of the politicians who are selling us all down the river.

  2. TimFerris Says:
    January 10th, 2010 at 12:45 pm

    I almost forgot what I came here to write–And, as the observant madame Gloria has been heard to comment,”Once Walmart is the only game in town, do you really think they’re going to give you the lowest prices?”

    Already, we’re aware of how they have cut quality to hit price points. Does this sort of downward spiral ever reverse?

  3. Ed Morrison Says:
    January 11th, 2010 at 6:49 am

    Tim:

    Cleveland’s business and political leadership have long confused the difference between real estate development and economic development. When it was announced, Steelyard Common was hailed as a major economic development boom to the city. Yet, it was no such thing.

    What’s missing here is any sense of strategy. The brilliance of the Wal-Mart business model is that it achieves high levels of profitability with a very low skilled, fluctuating workforce. It is not uncommon for Wal-Mart stores to experience 30%, 40%, 50% or higher turnover in their employee base each year.

    These employees are generally the working poor, who have a relatively strong work ethic, weak educational attainment, and no career pathway out.

    Communities like Cleveland should be negotiating with Wal-Mart to partner with local community colleges to provide additional training and educational opportunities for Wal-Mart employees on site.

    Each Wal-Mart can easily have a learning center, built by the company and donated to local educational institutions, to provide on-site training.