New Study Shows How Wal-Mart Devastates Small Businesses
New Study Shows How Wal-Mart Devastates Small Businesses
By Janean Chun / huffingtonpost.com
Dec 16, 2011

Walmart cuts more than just prices -- it cuts small businesses and jobs, according to a new study released by Manhattan Borough President Scott Stringer. Weighing in on the debate about whether Walmart should enter New York City, the study found that between 30 and 41 small retailers would go out of business within the first year of just one Walmart opening in Harlem. By the second year, as many 66 small retailers could be out of business. "When you lose local businesses, you lose local jobs," Stringer says. "And Walmart wages are so low, they're basically pushing people to public assistance."

Stringer used a 2009 Chicago study as a model for his research. That study found that 25 percent of competing businesses within a one-mile radius of a West Chicago Walmart closed within a year of the Walmart opening, and 40 percent closed by the second year. Stringer applied the model to a vacant location in Harlem that was big enough to house a Walmart, and surveyed 304 licensed local retailers with a fresh food component.

"I talked to small-business owners who have put their sweat equity and life savings into keeping these stores afloat during this recession," Stringer says. "These storeowners are pioneers in this community. They invested so much of themselves making sure these businesses could make it in the community at a time when banks were not in Harlem, when developers didn’t want to do business there, when there weren't any chains. We're doing everything in our power to make sure they have a fighting chance in the face of a Walmart coming to Harlem. To simply ignore the work of middle-class people trying to advance themselves in the face of a huge conglomerate coming in and wiping out everything they built is scary to me."

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New Study Shows How Wal-Mart Devastates Small Businesses