Is Wal-Mart The Atomic Bomb of Retail?

MLewyn's picture

I was reading a conversation on the PRO-URB listserv about whether to oppose an intown Wal-Mart in Washington, and someone asserted that Wal-Mart was different from all other stores because it was a potential monopolist.  Evidently, some people believe that Wal-Mart (unlike Costco or Target) is so good at its work that it destroys all other retail.

Having lived near Wal-Marts in both a small town and a suburb, I did not see it that way.  My experience (in Jacksonville, Atlanta, and Carbondale in rural Southern Illinois) was that Wal-Mart, like any other big box, was usually surrounded by smaller retail shops of various types.

I then decided to do a bit of research to see if my instincts fit reality, by checking out various stores' Walkscore scores.  I reasoned that although Walkscore is a flawed guide to walkability (due to the anti-pedestrian street design of many places with high Walkscores) it is a pretty good guide to how many retail stores are near a given site.

I began by looking at a competing big-box, Costco. Jacksonville, Fla. (where I lived from 2006-11) has one Costco; its Walkscore is a mediocre 52 (4901 Gate Parkway).  By contrast, Jacksonville has eleven Wal-Marts.  If Wal-Marts indeed wiped out alternative retail, Wal-Marts would have even worse Walkscores than Costco.

This proved not to be the case.  Only three of the eleven had Walkscores below 52.  The "best" Wal-Mart (8808 Beach) had a Walkscore of 78.  The worst Wal-Mart (10251 Shops Ln., walkscore 38) is only a parking lot or two from a major regional mall, indicating to me that retail is not always a zero-sum game: just as New York's jewelers benefit from being near other jewelers, other small shops might actually complement a Wal-Mart or a Costco.

Of course, Jacksonville is a big enough city that its neighborhoods can usually support a Wal-Mart and a wide variety of other stores.  It may be that there are certain situations where collective buying power is so low that a large retailer might not be able to coexist so easily with other stores, most notably in very small towns.  For example, some years ago, I was with my parents when they drove through the mountains of rural north Georgia, and we shopped at a Wal-Mart that seemed to be miles away from anything.

On the other hand, I think this is likely to be the case only in very small towns.  In Carbondale, Il. (pop. 20,000)  the Wal-Mart (1450 E Main) has a very low Walkscore (37).  So you might think it functions as a retail monopolist.  But even this Wal-Mart is on a street with quite a few strip malls.  I did a Google Maps search for "Department stores near 1450 East Main" and found not only apparel (TJ Maxx, Pier 1) within a mile of the Wal-Mart, but also a Best Buy, Dollar Tree, Kroger, Kohl's, Lowe's, and a J.C. Penney.  So even though there is certainly a population level at which a Wal-Mart can soak up nearly all retail demand, that level is somewherebelow 20,000 people.



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