Study: Wal-Mart Good For Local Economy

Jan 28, 2004

By George Anderson

A study commissioned by Wal-Mart and conducted by the Los Angeles County Economic
Development Council has concluded that the retailer’s move into California will
have a net positive effect on the economy.

The study acknowledges that Wal-Mart could capture up to 20 percent of the
grocery business in California as it opens up to 40 Supercenters by 2010.

The Wal-Mart Supercenter incursion would lead to a loss of jobs at other supermarket
operators as they go out of business or cut back on staff in an effort to remain
price competitive with Wal-Mart.

In the California region, Wal-Mart capturing 20 percent of the grocery market
would result in job losses between 3,000 and 5,000, according to the report.

Consumers would achieve a greater net benefit, however, as lower prices would
result $3.76 billion saved and the creation of up to 34,000 jobs outside of
grocery retailing.

Moderator’s Comment: Does the presence of a Wal-Mart
Supercenter improve the overall standard of living in an area?

A long time ago, we were told to believe no more than
half of what we were told when another party’s self-interest was involved.

Applying that rule to this research would mean 10,000 jobs would be lost and 17,000 would be created because of the presence of Wal-Mart Supercenters in
Southern California. Will 7,000 extra jobs (pay scale unknown) and $1.88 billion in grocery savings mean the lives of people in Southern California will be better?
Anderson – Moderator

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