Study: Walmart Does Not Boost Employment or Retail Sales

January 8, 2010

( -- The opening of a Walmart store in Chicago's Austin neighborhood in 2006 has not increased retail activity or employment opportunities, according to a study by researchers at the University of Illinois at Chicago and Loyola University Chicago.

The study found that stores near Walmart were more likely to go out of business, eliminating the equivalent of about 300 full-time jobs -- about as many as Walmart initially added to the area.

The findings support the contention that urban Walmart stores absorb sales from other city stores without significantly expanding the market, said study co-author David Merriman, head of the UIC department of economics and professor of public administration.

"What we're seeing here is that placing a Walmart in an urban setting is basically a wash in terms of sales revenue for the city and jobs for local residents," Merriman said. "This means that communities around the city shouldn't see Walmart or other big-box retailers as a panacea for local economic problems."

Walmart's expansion into larger cities across the country has stirred debate about its potentially negative impact on local jobs, wages and consumer prices, but such impacts had not been rigorously evaluated until this study, Merriman said.

The researchers collected data once before, and twice after, Walmart's opening.

Telephone surveys from March to August 2006 -- before the opening -- yielded baseline information on hours worked, salary ranges, and employee benefits of workers in 306 nearby discount stores, drugstores, apparel stores, toy stores, shoe stores and hardware stores.

Six months after Walmart opened, from March through November 2007, the researchers surveyed the same stores to find out whether any had closed or adjusted wages, employment or prices due to the opening of Walmart. The group was able to re-survey about 56 percent of the original stores. The study found that those businesses that competed with and remained in business showed little change in prices, wages or employment.

A third survey, from March to November 2008, found that of the 306 businesses originally surveyed, 82 had gone out of business during the study period.

The researchers also assessed sales tax data from the Illinois Department of Revenue and employment data from the Illinois Department of Security.

"Our hope is that this evaluation aids policy makers, scholars, and community activists as they consider the full range of economic development strategies, and not just big-box developments, in their respective neighborhoods," said Phil Nyden, director of Loyola's Center for Urban Research and Learning.

The study was supported by a grant from the Woods Fund. The survey report is available at

Explore further: Wal-Mart to sell goods from other vendors on Web

Related Stories

Wal-Mart to sell goods from other vendors on Web

August 31, 2009

(AP) -- Wal-Mart Stores Inc. has launched an addition to its online business that has outside retailers selling nearly 1 million new items through, a move that could help the world's largest retailer catch up ...

Online shopping revolution?

January 8, 2010

The battle for the shrinking American budget is moving online this year with a vengeance.

Women want bargains but men prefer brand names

May 15, 2008

Women are better bargain hunters than men, with male shoppers seeking known brand names when deciding which store to go to, a Massey University study of consumers has found.

Digital music sales 'to nearly equal CDs next year'

August 18, 2009

Compact discs accounted for 65 percent of US music sales in the first half of 2009 but digital downloads are expected to nearly equal CD sales by the end of next year, market research firm NPD Group said Tuesday.

Recommended for you

Plague likely a Stone Age arrival to central Europe

November 22, 2017

A team of researchers led by scientists at the Max Planck Institute for the Science of Human History has sequenced the first six European genomes of the plague-causing bacterium Yersinia pestis dating from the Late Neolithic ...

How to cut your lawn for grasshoppers

November 22, 2017

Picture a grasshopper landing randomly on a lawn of fixed area. If it then jumps a certain distance in a random direction, what shape should the lawn be to maximise the chance that the grasshopper stays on the lawn after ...

Ancient barley took high road to China

November 21, 2017

First domesticated 10,000 years ago in the Fertile Crescent of the Middle East, wheat and barley took vastly different routes to China, with barley switching from a winter to both a winter and summer crop during a thousand-year ...

1 comment

Adjust slider to filter visible comments by rank

Display comments: newest first

2.3 / 5 (3) Jan 13, 2010
But did they ask residents if they liked shopping at Walmart. Did they see if Walmart offered lower prices? Did they ask if shoppers found Walmart saved them money? No. The Woods Fund supposedly helps low income families, but it looks to me more like a Democratic organization such as ACORN. If they were interested in helping low income people, they'd ask them if they liked it - they apparently do. The Woods Fund annual report indicates they work to limit big-box retailers. This isn't helpful to the poor. The free market helps ensure low prices which helps the poor.

Please sign in to add a comment. Registration is free, and takes less than a minute. Read more

Click here to reset your password.
Sign in to get notified via email when new comments are made.