The impact of big-box retailers on communities, jobs, crime and more: Research roundup. Compiled by the Harvard University Kennedy School.
Regulation of Large Retail Establishments. This guide from Municipal Research and Services Center includes citations and links to many relevant studies.
Study overviews and links
- Big-box stores pay workers good wages. An overview of 2014 study by National Bureau of Economic Research
- The Impact of an Urban Wal-Mart Store on Area Businesses. Published in Economic Development Quarterly, 2012.
- Rolling Back Property Tax Payments (Oct. 2007)
Wal-Mart makes a common practice of downplaying its property values to minimize its property taxes in communities in which they locate. Public records searches indicate the corporation has filed assessment challenges on over a third of their retail and distribution operations.
- Assessment of the Direct, Indirect, and Induced Economic Effects of Chain Stores on the Regional Economy of Cape Cod (2005) (pdf)
This study by an economic consulting firm clearly identifies big boxes and chains as detriments to community and busts the myth perpetuated by chains that they will boost the local economy. How? By demonstrating that, by proportion, chains and independent stores account for approximately the same sales per square foot, yet independents tend to pay better wages, provide more jobs per sale and contribute more to the local economy through the multiplier effect.
- Supercenters and the Transformation of the Bay Area Grocery Industry: Issues, Trends, and Impacts (2004) (pdf)
This thorough report, produced by the Bay Area Economic Forum, provides rich data on supercenter development; this study urges municipal leaders to seriously consider the grocery sector’s substantial impact on the community and the local economy; they should consider proposals for supercenters with great care.
- Rodino Report for the City of Los Angeles on the economic impact of Wal-Mart: A compelling, comprehensive case for the multi-faceted impacts of this big box. (The hyperlink will take you to a report index–the Rodino report, in addition to the ordinance that followed it, is noted).
- Wal-Mart: A Destructive Force for Chicago Communities and Companies [PDF]
Economic impact analysis commissioned by the New School of Community Economic Development, University of Illinois-Chicago, March 25, 2004
- Wal-Mart and County-Wide Poverty [PDF]
A study from Pennsylvania State University from October 18, 2004 that indicates counties with one or more Wal-Mart stores experience smaller decreases in family poverty than counties without. Possible causes include the decrease in civic capacity due to local entrepreneurs being driven out of business–people who also tend to be community leaders.
- Shopping for Subsidies: How Wal-Mart Uses Taxpayer Money to Finance Its Never-Enging Growth [PDF]
This report by Good Jobs First documents over $1 billion in public subsidies and other forms of handouts that Wal-Mart has received for locating in communities.
- Everyday Low Wages: The Hidden Price We All Pay for Wal-Mart [PDF]
A report by the Democratic staff of the Committee on Education and the Workforce, U.S. House of Representatives, February 16, 2004.
- “Is it fair to give taxpayers’ money to big corporations that will then use it to help put existing firms out of business?” ask Dr. Kenneth Stone and Georgeanne Artz in their study of big box home improvement centers and their effect on host towns and surrounding communities [PDF]. Published in 2001. Findings: sales of hardware and building supplies grow in the host communities, but at the expense of sales in smaller towns nearby. Moreover, after a few years, many host communities experienced a sharp decline in hardware and building supplies sales, often dropping below their initial levels, as more big box stores opened in the surrounding region and saturated the market.
- Fiscal impact analysis (pdf) in Barnstable, Massachusetts (2002) that compares the tax revenue generated by different kinds of residential and commercial development with the actual cost of providing public services for each land use. Revenue gainers are community-based businesses. Revenue losers are big boxes, fast food chains and strip malls.
- Released in October 2003, 10 Reasons Why Vermont’s Homegrown Economy Matters: And 50 Proven Ways to Revive It (pdf) is the result of two years of collaborative research by the Institute for Local Self Reliance and the Preservation Trust of Vermont on reasons why locally owned businesses matter and practical ways to plan for a homegrown economy. Useful no matter where you live.
- The Shils Report (1997), entitled “Measuring the Economic and Sociological Impact of the Mega-Retail Discount Chains on Small Enterprise in Urban, Suburban and Rural Communities,” was groundbreaking research by Edward B. Shils, Director Emeritus of the Wharton Entrepreneurial Center at the University of Pennsylvania. The report details the effect of chains and big boxes on small businesses due to economies of scale and governmental failure to enforce antitrust laws. Other studies have built on Shils’ work. Follow the link to the 250-page downloadable report.
- Dr. Kenneth Stone’s (Iowa State University, 1977) landmark study on Wal-Mart’s effect on Iowa’s rural communities 10 years after the corporation’s arrival, Impact of the Wal-Mart Phenomenon on Rural Communities [PDF], provides strong evidence of how this big box displaces locally owned independent businesses in the community and the surrounding area. It also provides Dr. Stone’s advice to locals on competing with chains.
If you’re looking for an overview of the multiplier effect, along with the most current studies, visuals and language to use in outreach materials, we suggest starting on our Multiplier Effect page.
- Mondanock Region, NH, fall 2014 local multiplier study
MIndependent retailers in this study were shown to return four times as much per dollar of revenue compared to chain retailers.
- Albuquerque, NM 2013 Study
Keep It Querque commissioned an economic impact study to quantify how much more money local independent businesses return to their local economy compared to chain outlets. Major findings of the study, conducted by Civic Economics include, nearly three times more money recirculates locally when spent at local independent retailers compared to chains and more than 2.5 times more money is re-spent locally when people choose a local independent restaurant over a chain.
- Ten New Studies of the “Local Economic Premium”
Las Vegas First, Local First Utah, Shop Local Raleigh and the Louisville IBA are among the local groups that commissioned studies by Civic Economics (2012) in partnership with the American Booksellers Association.
See also: August 2012 Study in Utah Show Indies are Critical to Local Economic Vitality
- Thinking Outside the Box: A Report on Independent Merchants and the New Orleans Economy
A 2009 Civic Economics study compares local independents and leading chain competitors and finds the independent New Orleans retailers generate twice the annual sales, recirculate revenues within the local economy at twice the rate, and have four times the economic impact per square foot while consuming a fraction of the land.
- Local Works: Examining the Impact of Local Business on the West Michigan Economy
This 2008 study demonstrates the major economic impact of even a 10% shift in total per capita spending from chains to locally owned independent businesses — creation of almost $140 million in new economic activity and 1,600 new jobs for the region. The included examination of the economic impact of independent and chain businesses per-square-foot points to independent businesses as the recommended tenants for available commercial properties.
- San Francisco Retail Diversity Study
This three-part study, released in May 2007, calculates the market share of independents and chains in several categories: book, sporting goods, and toy stores, and casual dining restaurants. The study’s second section analyzes the impact on San Francisco’s economy of shopping at locally owned businesses versus chains. The final part examines the impact on the city’s economy of a 10% shift in resident spending between chains and local businesses and vice versa.
- Andersonville Study of Retail Economics
This report, released on October 20, 2004, extends the study done in Austin, Texas in 2003. The study compares 10 independent businesses and 10 chains in retail, restaurant and service sectors. The results further corroborate the local economic benefit of independent businesses, demonstrating that independents generate about 3 times the local economic activity as chains. Further, the researchers make the case for community governments to create policy to protect their independent businesses.
- The Economic Impact of Locally Owned Businesses vs. Chains: A Case Study in Midcoast Maine (pdf)
by the Institute for Local Self-Reliance and Friends of Midcoast Maine, September 2003. Findings of this study indicate that three times as much money stays in the local economy when you buy goods and services from locally owned businesses as with chains. This study tracked the revenue and expenditures of eight locally owned businesses in Midcoast Maine.
- Economic Impact Study (pdf) in Austin, Texas (2002) substantiating the economic multiplier–of over three times–of two independent businesses, Waterloo Records and Book People, as compared to a Borders Books & Music Corp. store (planned for inclusion in a nearby — and publicly subsidized — development at the time of the study).