If you're an entrepreneur opening a general shop or a grocery store, your business plan probably includes some mention of the fact that you're either nowhere near a Wal-Mart, or if you are, that you've got a viable plan for actually competing with them (heh). But is that a moot point?
A new study by researchers at West Virginia University suggest that it is. They claim that Wal-Mart isn't that bad for small business after all.
Well, kind of. Their argument is that while some small businesses may close shop once Wal-Mart rolls into town, others open up in their place. So...what it sounds like they're saying is that Wal-Mart doesn't hurt all small business, it's just bad for the mom-and-pop shops peddle the same wares as Wal-Mart. Also, they argue that money Wal-Mart saves consumers can then be spent elsewhere—in a community's small businesses, for instance. While all this sounds suspiciously like a study commissioned by Wal-Mart itself, lead researcher Russell S. Sobel—an econ prof at WVU—says that the retailer didn't contribute a dime.
Unconvinced? (Admittedly, we're still dubious.) Check out this video of Sobel explaining the study's results to (who else) a Fox News reporter:
Thoughts?
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I'm sure this study does a very good job of justifying its findings, but I think they are looking in the wrong direction for evildoingness.
Because Wal-Mart is a monopsony, it's not hurting small business directly as much as it is hurting larger ones, and we've all just seen how edgy the failure of huge corporations makes us.
Many of the brands that the chain carries would like to pass along rising costs to consumers, but cannot when Wal-Mart decrees that prices must stay low.
For Kraft, swallowing rising costs means shutting down 39 plants and laying off 13,500 workers.
Check out http://www.harpers.org/archive/2006/07/0081115
There are more ways to be evil.
—paige
17:11, September 18th, 2008
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