Wal-Mart's Effect on Retailers Weaker in City, Study Finds May 20, 2008
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| Anne Brooks Ranallo | aranallo@uic.edu |
Recent surveys and government data show a small but statistically significant relationship between a store's proximity to the Wal-Mart in Chicago's Austin neighborhood and the likelihood that the smaller store will go out of business, said David Merriman, UIC professor of public administration.
Sales tax data at the zip code level suggest that Chicago's Wal-Mart has displaced sales from businesses in the same zip code, especially discount department stores that directly compete with Wal-Mart. Merriman said the store did not displace significant sales in other zip codes. The data referred to the store's first year of operation, beginning in September 2006.
"These data show that, at least in the short run, despite Wal-Mart's presence, the vast majority of small businesses in the Austin neighborhood continue to operate and provide goods and services that the public seeks," Merriman said.
Urban policy makers need to understand Wal-Mart's impact on jobs, wages, consumer prices and retail development, Merriman said. He noted that the Chicago store is the only urban Wal-Mart besides an older one in Los Angeles.
"We have not yet fully explored Wal-Mart's impact on local employment," Merriman said. "Is the Wal-Mart adding to the overall number of jobs in the area, simply replacing other forms of local employment, or actually contributing to an overall decline in the number of jobs?"
A third round of surveys and other data collection should produce more definitive results next year, he said.
UIC and Loyola University's Center for Urban Research and Learning conducted the study, with support from the Woods Foundation.
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