The Impact of an Urban WalMart Store on Area Businesses
This study, the first on the impact of a WalMart in a large city, draws on three annual surveys of enterprises within a four-mile radius of a new Chicago WalMart. It shows that the probability of going out of business was significantly higher for establishments close to that store. This probability fell off at a rate of 6% per mile in all directions. Using this relationship, we estimate that WalMartâ€™s opening resulted in the loss of approximately 300 full-time equivalent jobs in nearby neighborhoods. This loss about equals WalMartâ€™s own employment in the area. Our analysis of separate data on sales tax receipts shows that after its opening there was no net increase in retail sales in WalMartâ€™s own and surrounding zip codes. Overall, these results support the contention that large-city WalMarts, like those in small towns, absorb retail sales from nearby stores without significantly expanding the market.
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