What It Really Costs When Walmart Comes to Town
When it comes to shopping, Walmart is synonymous with low prices and convenience. Those two factors have brought the massive retail chain to thousands of communities across the United States and made it the largest private employer in the country. But there are a lot of hidden costs that come with a Walmart in town — costs that shoppers don’t necessarily think about when they load their cart and head to the checkout line.
Job Loss and Job Creation
The most immediate consequence of Walmart’s presence is usually a reduction in the number of jobs in the local economy. When a Walmart opens, it can put local stores out of business, and with it, the jobs of those who worked for them.
On the flip side, Walmart does employ many local people and typically offers better wages and benefits than other local stores. But these jobs typically don’t pay as well as full-time positions at other retailers, and are concentrated in low-wage jobs such as cashiers, stockers, and shelf stockers.
Impact on Local Businesses
Walmart has a major impact on local businesses, both positively and negatively. Studies have found that a new Walmart store typically results in a 7 percent decline in neighborhood retail sales, as shoppers shift their spending away from local businesses and to the retail giant.
At the same time, Walmart can help local businesses by serving as an anchor to attract customers to their stores. In some cases, local businesses have even been able to benefit from Walmart’s presence by showing their products in the chain’s stores.
Tax Revenue
Walmart contributes to the local economy in the form of property and sales taxes. Property taxes from Walmart locations are usually substantially higher than from other retail stores, and sales taxes from Walmart locations mean more money for the local government.
But studies have found that the total amount of tax revenue that Walmart actually brings in can be less than the taxes it would generate if the store had used standard zoning regulations. Furthermore, Walmart can be a drain on other public services such as police, fire, and sanitation, as well as roads and highways.
Community Changes
Walmart can bring about changes to a community that extend far beyond the economic impacts. Studies suggest that Walmart’s presence has a significant negative effect on small business formation and entrepreneurship. This can have far-reaching effects on an entire region’s vitality.
Studies have also looked at the impact Walmart’s presence can have on the local social fabric. There is evidence to suggest that a Walmart can lead to less community involvement and volunteering.
Customer Service
When a Walmart comes to town, it can mean the disappearance of customer service-oriented or niche stores that offer unique products, personalized service, and a deep knowledge of the local market. Many such stores have been forced to shut down due to competition from Walmart and other big-box stores.
Furthermore, Walmart’s business model is usually centered around high-volume, low-price stores with limited staff, which means customers can often wait in lines longer and receive fewer product options and slower service than from smaller stores.
When it comes to Walmart, the costs are often hidden or hard to quantify. When a Walmart opens up in a community, it can bring lower prices and more convenience — but that can also come at a cost of lost jobs, less competition, lower tax revenue, and a disruption of the social fabric. In the end, it is up to each community to decide whether Walmart is worth the cost.
