Rural Initiative
Date of this Version
June 2006
Abstract
This is a study in three parts: the general impact of Wal-Mart and big box stores on the economy; an empirical look at Wal-Mart’s impacts on 15 Nebraska communities; and a review of research on ways that local retailers can compete against big box stores.
Part one suggests that Wal-Mart has both positive and negative impacts on the economy. Wal-Mart helps increase productivity and causes consumer prices to fall. Further, a number of studies found that employment increased in communities that received a new Wal-Mart store. However, other studies found that entry of a Wal-Mart failed to lead to net increases in local employment, and one study found a correlation between Wal-Mart locations and rising local poverty rates. More generally Wal-Mart entry increased concerns in many communities about the changes it may cause to the size and structure of the retail industry.
Part two shows that entry of a Wal-Mart does not seem to have a significant effect on retail employment, but can impact the number of retail establishments in rural Nebraska communities. Wal-Mart’s effect is also visible in general merchandising, particularly with respect to the level for employment.
In part three, four strategies are suggested for competing against Wal-Mart and other big box stores. They are improving service quality, improving merchandising, improving marketing, and improving management of marketing information.
Comments
Published by Bureau of Business Research, University of Nebraska - Lincoln.