Big Push for Big Box Stores: Wal-Mart ’ s Impact on a San Diego Community

1. Big Push for Big Box Stores: Wal-Mart’s Impact on a San Diego Community David Luu, University of California, San Diego, Urban Studies and Planning Program Findings and Analysis Introduction Over the past decades, Wal-Mart has earned the title of world’s largest retailer by offering the lowest prices found anywhere. Its success has raised many questions as to how their annual revenue was achieved and at what cost? The purpose of this study was to examine how big box retail stores, Wal-Mart in particular, affected the surrounding community. San Diego was the site chosen to be studied because of (1) it’s vastly urbanized infrastructure and (2) it’s past experiences with incorporating Wal-Mart superstores. Analyzing the economic impact would reveal how Wal-Mart positively affects the city but consequently burdens the community. • Archival Research • At the macroeconomic level, the data has included information such as annual revenue, cost of production of goods, government subsidies and other types of statistics. With this information, the numbers have demonstrated that the city is ultimately benefitting from the revenue generated from • the low pricing. • Survey • Data was gathered from surveys • administered to residential • households surrounding a Wal- • Mart in Clairemont Mesa, San • Diego. There were some notable • findings that both satisfied and • differed from prepared • hypotheses. CONCLUSION • Wal-Mart stores bring in much sales tax revenue that cities desperately need to fund various public services. • These megastores bring in customers from not only the nearby vicinity but from outside the city as well. • However, these benefits and profits come at an expensive price. These establishments require much physical maintenance, i.e. street building, building construction, and in some locations, millions of dollars are spent in recruiting Wal-Mart stores. • This research study is beneficial to the other ongoing Wal-Mart studies because it specifically analyzes the economic impact of Wal-Mart superstores on a community and briefly taps into the broader microeconomic effect of other cities. • Overall, there was a general negative cloud over these large retailers because of their efficiency in operating. Findings and Analysis continued… • Research Questions • What are the economic effects of a Wal-Mart superstore on a San Diego community? • How do neighboring families view Wal-Mart? • How is city/community infrastructure affected? • Methodology • Research was conducted using three principal methods • Archival Research – Data was gathered from previous Wal-Mart associated studies to further analyze the microeconomic impact. • Interview – A former city manager of San Diego, Jack McGrory, provided substantial information about how the Wal-Mart corporation conducts business. • Survey – Surrounding households of a Wal-Mart site provide first-hand public opinions about their neighboring retailer. • Out of the 12 households surveyed, 75% rarely shop at their nearby Wal-Mart. • More than 50% of the households said they DO NOT like how close the Wal-Mart superstore is to their home. • 7 out of 12 households feel that the city’s infrastructure has dramatically changed. • Most of whom believe the city has changed NEGATIVELY • Interview • Jack McGrory, former city manager of San Diego, had worked with incorporating 2 Wal-Mart locations in downtown. • He admits that in the beginning, Wal-Mart was a bit ambitious in setting up a new site but eventually learned to work with the city and public • McGrory believes Wal-Mart generates much sales tax for the city, but questions whether it is new money flowing in, or cannabalization of old sales tax revenue. References Brunn, Stanley D. Wal-Mart World: the World's Biggest Corporation in the Global Economy. New York: Routledge, 2006. Rams, Edwin M. Analysis and Valuation of Retail Locations. Reston, VA: Reston Pub., 1976. Roddick, Anita, Khanna, Arun, Litan, Robert. “Wal-Mart’s World.”Foreign Policy No. 152 (2006): 6. JSTOR March 8, 2011 Logos attributed to Wal-Mart Corporations