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The Economic Impact of Wal-Mart Stores


The Economic Impact of Wal-Mart Stores

By Dr. Jim Simmons

Since the WalMart study for CSCA a few years ago (Simmons and Graff, 1998), the question has been raised repeatedly: "What happens to the other stores when the WalMart opens up in town?"  The short answer is that the new WalMart, depending on the size of the store, will eventually absorb between $30 and $60 million in sales, and without any other growth it is bound to affect a number of local retailers.  But the long answer is much more complex, because the impacts depends on the difference between the amount of local growth in sales that actually occurs and the amount that is projected to occur if WalMart had not arrived.  WalMart has now been in Canada for a sufficient period that we can evaluate the actual growth in sales, and attempt to estimate the amount that has been diverted from other retailers.

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