Economic Impact of Wal-Mart Supercenters on Existing Businesses in Mississippi (ISU, MSU)

A report from professors at Iowa State University and Mississippi State University examines the effect Wal-Mart stores have on existing businesses. From the introduction:

"While there is much anecdotal evidence to suggest that existing businesses are harmed by the growth of supercenters, there has been little academic research in the field, owing to a general lack of reliable data. A recent paper by Andrew W. Franklin examined the impact of Wal-Mart supercenter entry on the concentration of grocery stores in metropolitan areas. While he found little evidence that supercenters affect the concentration in larger metropolitan areas, he did report that Wal-Mart’s market shares were highest in lower income and smaller metropolitan areas (Franklin, 2000).

This study examined the impact of Wal-Mart supercenters on the sales of existing businesses in local trade areas. Data from sales tax reports in Mississippi were used to analyze changes in the sales of food stores, general merchandise stores, furniture stores, building materials stores, miscellaneous retail stores and the total county. The Mississippi data have two main advantages. First, unlike most states, all food items are subject to the sales tax in Mississippi; therefore this data set allows us to account fully for food store sales. Also, since food items sold in supercenters are reported in general merchandise store sales and not in food stores sales, we have a unique opportunity to identify changes in market structure that have occurred with the addition of a supercenter. Second, supercenters have been open in Mississippi for several years, sufficiently long to observe market changes."

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