What Happens to Small Businesses When Walmart Moves In?

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  • What Happens to Small Businesses When Walmart Moves In?

    1. What Happens to Small Businesses When Walmart Moves In?
    2. As Walmart and other big-box chains haveexpanded 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 one of the few places where local businesses continue to thrive. But, now, with Walmart pushing to get intourban areas, these businesses are under threat.
    4. After Walmart opened in 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 onArea 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 SkywayNeighborhood of South Seattle," C.S. Fowler Consulting LLC, April 2012.
    6. Walmart claims: “Small businesses thatMYTH adapt can thrive and grow side by side with Walmart.”
    7. Walmart claims: “Small businesses 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 destroys small businesses, the surroundingneighborhood suffers significant economic and social losses.
    9. 1. Dozens of Local Entrepreneurs Lose Their Livelihoods
    10. 2. Retail Employment Declines 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 -600Source: "The effects of Wal-Mart on local labor markets," Journal ofUrban Economics, 2008.
    11. 3. Money Leaves the 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 $400,000Source: “Thinking Outside the Box: A Report on Independent Merchantsand the Local Economy,” Civic Economics, 2009.
    12. 4. Neighborhood Well-Being Declines 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 neighborsSource: “Local Ownership Makes Communities Healthier, Wealthier andWiser,” Institute for Local Self-Reliance, July 18, 2012. (Reporting on thefindings of several published sociological research studies.)
    13. 5. The Community Risks Its Future on a Single Absentee-Owned StoreWalmart may come in... and then leave.
    14. With so much at stake, many small business owners are now joining the campaign toblock Walmart’s aggressive urban expansion and fight for new city policies.
    15. Cities have many policy options for controllingthe 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, policy models, and much more under the Independent Business tab at www.ilsr.org

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