The Impact of the Wal-Mart Phenomenon on Rural Communities

A report by the Farm Foundation on the impact of Wal-Mart stores on local retail sectors. From the introduction:

"There is strong evidence that rural communities in the United States have been more adversely impacted by the discount mass merchandisers (sometimes referred to as the Wal-Mart phenomenon) than by any other factors in recent times. Studies in Iowa have shown that some small towns lose up to 47 percent of their retail trade after 10 years of Wal-Mart stores nearby (Stone 1997)...

The study looked at 34 towns in Iowa that had Wal-Mart stores for at least 10 years. The retail performance of these towns was compared to 15 towns of the same population group that did not have Wal-Mart stores. The towns ranged from 5,000 population to 40,000 population. Results for two digit Standard Industrial Classification Codes (SIC) are discussed below...

The general merchandise stores in the non Wal-Mart towns began declining immediately after the Wal-Mart stores opened. Their sales declined by two percent after the first year and continued declining to a cumulative 34 percent after 10 years. A few of these towns had a K Mart store (typically an older, smaller store), and all of them had one or more regional discount store, such as Pamida, Alco or Place’s. It is believed that people in the towns without Wal-Mart stores migrated to the towns with Wal-Mart stores to shop for general merchandise."

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