Studies on Local Purchasing

Key Studies on Big-Box Retail & Independent Business

Written by Stacy Mitchell | Institute for Local Self-Reliance | Updated on Dec 22, 2011

Stack of books

Below are summaries and links to key studies that examine the impact of Wal-Mart and other large retail chains and, in some cases, the benefits of locally owned businesses. For ease of use, we’ve organized these studies into the following categories, although they do not all fit neatly into one category.

  • Economic Impact of Local Businesses vs. Chains Studies have found that locally owned stores generate much greater benefits for the local economy than national chains.
  • Retail Employment These studies examine whether the arrival of a superstore increases or decreases the number of retail jobs in the region.
  • Wages & Benefits Studies have found that big-box retailers, particularly Wal-Mart, are depressing wages and benefits for retail employees.
  • Existing Businesses These studies look at how the arrival of a big-box retailer displaces sales at existing businesses, which must then downsize or close. This results in job losses and declining tax revenue, which some of these studies quantify.
  • Poverty Rates Counties that have gained Wal-Mart stores have fared worse in terms of family poverty rates, according to this study.
  • Social and Civic Well-Being This study found that Wal-Mart reduces a community’s level of social capital, as measured by voter turnout and the number of active community organizations.
  • City Costs These studies compare the municipal tax benefits of big-box development with the cost of providing these stores with city services, such as road maintenance, police and fire—finding that cities do not always come out ahead.
  • State Costs Because many of their employees do not earn enough to make ends meet, states are reporting high costs associated with providing healthcare (Medicaid) and other public assistance to big-box employees.
  • Subsidies The expansion of big-box retailers has been financed in part by massive development subsidies and tax advantages provided by local and state governments. These studies document those subsidies and their failure to produce real economic benefits for communities.
  • Consumers & Prices Are chains better for consumers?
  • Traffic How do vehicle miles traveled and trips increase as a result of big box developments?
  • Charitable Contributions Small businesses donate about twice as much per employee to charitable organizations as large businesses, according to this study

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