Uploaded byStacy Mitchell
What Happens to Small Businesses When Walmart Moves In?
1. When Walmart moves into an area, the number of small retail businesses falls significantly as many are forced to close. A study found that within 4 miles of a Chicago Walmart, 25% of small businesses closed after it opened. 2. Walmart claims small businesses can thrive alongside it, but studies show Walmart openings lead to large negative effects on competing businesses and no increase in sales at non-competing businesses. 3. When small businesses close, the local community suffers losses in retail jobs, money leaving the community, and declines in civic participation and neighborhood well-being.
What Happens to Small Businesses When Walmart Moves In?
- 1. What Happens toSmall Businesses When Walmart Moves In?
- 2. As Walmart andother big-box chains have expanded across the country, the number of small retail businesses has fallen by 39%. Number of small retailers per 1 million people 2,500 2,000 1,500 1,000 500 1982 1987 1992 1997 2002 2007 Source: US Economic Census
- 3. Cities are oneof the few places where local businesses continue to thrive. But, now, with Walmart pushing to get into urban areas, these businesses are under threat.
- 4. After Walmart openedin Chicago in 2006, one-quarter of the small businesses within a 4-mile radius of the store closed. Source: “The Impact of an Urban Wal-Mart Store on Area Businesses,” Loyola University Chicago, 2009.
- 5. Walmart’s new, smaller“Neighborhood Market” and “Express” stores are no less destructive. A study of a Neighborhood Market store in Seattle found that it would reduce sales at nearby businesses by over $25 million. Source: "The Economic Impact of a Walmart Store in the Skyway Neighborhood of South Seattle," C.S. Fowler Consulting LLC, April 2012.
- 6. Walmart claims: “Smallbusinesses that MYTH adapt can thrive and grow side by side with Walmart.”
- 7. Walmart claims: “Smallbusinesses that MYTH adapt can thrive and grow side by side with Walmart.” A study of 1,200 big-box store openings FACT nationally found: • “large, negative effects” on nearby competing businesses, including many store closures. • no increase in customers or sales for non- competing businesses (i.e., those offering different products than the big-box store). Source: "Mom-and-Pop meet Big-Box: Complements or substitutes?" Journal of Urban Economics, 2010.
- 8. When Walmart destroyssmall businesses, the surrounding neighborhood suffers significant economic and social losses.
- 9. 1. Dozens ofLocal Entrepreneurs Lose Their Livelihoods
- 10. 2. Retail EmploymentDeclines 600 450 300 360 Average number of jobs created by a Walmart store 150 0 -150 -300 Average number of jobs lost at other -450 -507 businesses after Walmart opens -600 Source: "The effects of Wal-Mart on local labor markets," Journal of Urban Economics, 2008.
- 11. 3. Money Leavesthe Community As local retailers close, local suppliers and service providers, such as printers and accountants, see their revenue decline. Walmart has no need for these services. Additional Local Economic Activity Created for Every $1 Million in Sales Big-Box Local Retailers $160,000 $320,000 $0 $100,000 $200,000 $300,000 $400,000 Source: “Thinking Outside the Box: A Report on Independent Merchants and the Local Economy,” Civic Economics, 2009.
- 12. 4. Neighborhood Well-BeingDeclines Several studies have found that when locally owned businesses are displaced by Walmart: • Civic participation and voter turnout fall • The number of active nonprofit organizations drops • Residents are less likely to know and interact with their neighbors Source: “Local Ownership Makes Communities Healthier, Wealthier and Wiser,” Institute for Local Self-Reliance, July 18, 2012. (Reporting on the findings of several published sociological research studies.)
- 13. 5. The CommunityRisks Its Future on a Single Absentee-Owned Store Walmart may come in... and then leave.
- 14. With so muchat stake, many small business owners are now joining the campaign to block Walmart’s aggressive urban expansion and fight for new city policies.
- 15. Cities have manypolicy options for controlling the spread of big-box retailers and protecting neighborhoods from their damaging effects. Here are a few: • Ban or limit “formula” businesses from most neighborhoods, as San Francisco has done • Require large retail stores to pass an economic and community impact review before they can open. • Mandate that large retailers pay a living wage and give back to the community.
- 16. Find studies, policymodels, and much more under the Independent Business tab at www.ilsr.org