Wall Street vs. Main Street: What are the Benefits and Costs of Wal-Mart to Local Communities?

“In business, there is big and there is Wal-Mart.” --BusinessWeek, October 6, 2003 So begins a recent report about the wide-ranging influence of Wal-Mart. To get a sense of just how big Wal-Mart is, consider the following: • Wal-Mart Stores, Inc. is the world’s largest retailer, with $285.2 billion in sales in the fiscal year ending Jan. 31, 2005 (Wal-Mart, 2006). • The company employs 1.2 million employees in the United States and 1.6 million worldwide. Wal-Mart is the largest private employer in the United States (WalMart, 2006). • Wal-Mart’s estimated $18 billion purchases from China in 2004 represent 10% of all U.S. imports from China (Lahart, 2005). • Wal-Mart controls a large share of retail business done by almost every major U.S. consumer-products company; it accounts for 28% of Dial total sales, 24% of Del Monte Foods, 23% of Clorox, and 23% of Revlon (Bianco & Zellner, 2003). • Wal-Mart began selling food in 1988 and in 2002 became the largest grocery chain in the United States. In 2004, U.S. grocery sales from Wal-Mart Supercenters and neighborhood markets totaled $80 billion (Agnese, 2005). Despite these successes or perhaps because of them, America has a love-hate relationship with Wal-Mart. The company is revered on Wall Street for its growth and business success, but often reviled on Main Street for driving out mom and pop retailers. Just what are the local benefits and costs of a Wal-Mart store opening up in a community? A review of the recent academic research that addresses the question of the local impacts of Wal-Mart and other supercenters shows that there are clear benefits and costs associated with supercenter retail stores, and that they are unevenly distributed across employees, shoppers, other businesses and local communities. Here, we provide a summary of these recent research findings and suggest some local strategies for managing large retail development.