Wal-Mart: Bringing Poverty to a City Near You

local businesses mainDoes Wal-Mart, with its rock-bottom prices and reputation for rolling over every small business in its path, perpetuate poverty? The answer is yes, says Stacy Mitchell, a senior researcher with the Institute for Local Self-Reliance.

Stacy writes, “Wal-Mart extracts wealth and pushes down incomes in every community it touches, from the rural areas that produce food for its shelves to the neighborhoods that host its stores.” [Tweet this]

You might be thinking this can’t be true… If anything, Wal-Mart, a store that offers the cheapest prices on everything from food to furniture, can’t possibly make poverty any worse, right? Wrong.

Here are some eye-opening stats and information courtesy of the Institute for Local Self-Reliance:

  • In a study of 3,000 Wal-Mart openings, each store caused a net decline of about 150 jobs (as competing retailers downsized & closed) & lowered total wages paid to retail workers. [Tweet this]
  • When locally owned businesses are replaced by big-box stores, dollars that once circulated in the community, supporting other businesses and jobs, leak out. [Tweet this]
  • Neighborhoods where Wal-Mart opens end up with higher poverty rates and more food-stamp usage than places where the retailer does not expand. [Tweet this]

These stats clearly indicate that Wal-Mart brings poverty, but it also raises the question: Are you assisting them by shopping in their stores? Hey, we’re not exactly pointing fingers here. We’ve all been guilty of choosing chains over local businesses at some point, right? But with troubling statistics like the ones above, how long can we continue to ignore them?

Fight Back Against Wal-Mart

So what can we do about it? It might seem like we’re powerless against a giant like Wal-Mart, but in actuality, we, as consumers, hold the power in our pocketbooks. Why not make it your goal, starting today, to avoid Wal-Mart – and other chain stores – and give your business to a local store instead?

As a small business owner yourself, you can help the small businesses in your community thrive by keeping your dollars local.

Even if you can’t shop local every day, some is always better than none. Local First Arizona urges people to shift 10% of their spending to local businesses. Doing this, they note, “can help support and improve the quality of life for everyone.”

Keep in mind, this doesn’t only apply to personal purchases. Shift 10% of your business’ spending (or more) – office supplies, accounting, etc. – and help other local providers not only stay in business but remain profitable.

Spreading the shop local message will help bring in customers to your own small business and empower your community as a whole. There’s strength in numbers, which is something eLocal, a directory that helps connect consumers with local businesses, promotes.

They found that if the people of an average America city were to shift 10% of their spending from chains to local businesses, it would bring an additional $235 million per year to the community’s economy. [Tweet this]

It’s Time to Break the Cycle

“This year, Wal-Mart plans to open between 220 and 240 stores in the U.S., as it marches steadily on in its quest to further control the grocery market,” Stacy warns. Wal-Mart may be trying to dominate with low prices and the lure of all-in-one convenience, but that doesn’t mean we have to let them.

Whether you already have a Wal-Mart around every corner or your city is about to get its first one, isn’t it time you started choosing local over chains? We have plenty of reasons to shop locally – and we have the stats that back up the negative influence chains have on our communities. Doesn’t it make sense, then, that we put our money where are homes, businesses, and families are?

Keep it local and keep our communities’ ability to prosper where it belongs: in the hands of local residents who know, and value, the immense power our money has to make a real, viable difference.

Share: Will you support local businesses over chains?

About the Author

Shannon Willoby

Shannon is the director of content marketing for Scott's Marketplace and has been writing since she was old enough to hold a pencil. (Or crayon.) When she's not blogging, you can find her daydreaming that she's Khaleesi from Game of Thrones.


  1. says

    In a study I helped with in Vancouver about 15 years ago we concluded that a Walmart store will take about 17% out of the local (Canadian) economy. In other words, every dollar you spend at Walmart, your neighbors will have to make up 17c in local taxes and vice versa. Actually don’t save shopping at Walmart.

  2. says

    Growing up in upstate NY, I longed for a Walmart. The nearest town to us, East Aurora, was 20 minutes away had several opportunities to permit a Walmart to locate there. The town continually refused; they said they couldn’t handle the increased traffic. Many of us, especially the younger set who longer for diversity of product selection, were upset. Many years later, I applaud the village fathers (and mothers) of East Aurora, NY for holding true to their values and protecting their businesses and residents. In fact, the local five and dime store, Vidler’s, has grown and continues to keep pace with the times – their Facebook Page is great to follow and they’ve recently received some award for their YouTube advertisements which are hysterical. The main street remains a ‘hometown’ – something I miss in today’s chain store/chain restaurant ‘formula’ for cities and towns.

    • Shannon Willoby says

      That’s great news, Tammy. Always nice to hear when local businesses are succeeding despite chains popping up all around them. There’s definitely a uniqueness to ‘main streets’ and local businesses that you just don’t get with big-box stores — and would be such a shame for our communities to lose them. Thanks for the comment!

  3. says

    Actually you might be right but your article doesn’t at all prove this. I have to ask, what is the difference between “cause” and “co-incidence?” As you are unlikely to do any research on this I will tell you – in “cause” A causes B and this is proved by some studies (note the plural) that show that there is no doubt that A is the definite cause of B. Your stats do NOT do this, except for the first, and even that one is dubious (you don’t speak of any other possible causes.) In “co-incidence” the two items happen simultaneously due to some other cause. A is NOT the cause of B but just another symptom. Now remember that I did say “You might be right” before you bitch me out. I’m just saying that this is poor science and before I buy into this I would have to have more proof than you are offering here. Now I know that such trials are very hard to accomplish in the real world. And I also understand the point of this article. However, if that is all you are using a “proof” of allegations, I’m not buying it.

    Those whose minds are already made up will, however.

    • Shannon Willoby says

      Hi, Dan.

      No bitching out here. The point of this blog post is to spark discussion and of course, that includes a difference of opinions. However, I am not the one who conducted the research on any of these stats.

      If you did read the post, you would have seen the link in the beginning that leads directly to the source where I got my information. The stats are all coming from not one, but multiple studies.

      Studies that have all led to the same conclusion: Wal-Mart causes some sort of negative effect in the cities it brings its stores to. If you want to read these studies so you can get your fill of “cause” and/or “co-incidence,” feel free. I provided the link in the blog post already; it’s up to you to click it.

      Thanks for your comment!


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