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2005-06-04
Aberdeen, S.D. Study Paints Grim Picture of Wal-Mart Economic Impact

On June 7, voters in Aberdeen, South Dakota will vote on zoning changes that could clear the path for a Wal-Mart supercenter. To help educate voters, former Iowa State University Professor Ken Stone, whose Wal-Mart studies have painted unflattering numbers about the retailer since the early 1980s, was hired by a citizen's group, the Concerned Citizens of Aberdeen (CCA), to report on the economic impact of what a supercenter would do to the local economy. Stone, who has for years told local merchants they can "thrive and survive" in the shadow of a Wal-Mart by finding some niche products to sell, nonetheless makes it clear that Wal-Mart arrives with much economic devastation in hand. Stone projects that in Aberdeen, at least 10 grocery, general merchandise and smaller stores would close if a Wal-Mart Supercenter were to be opened. Not to be outdone, Wal-Mart hired a professor at the University of South Dakota who just happened to come up with results more favorable to his funder, Wal-Mart. Wal-Mart has promised an Aberdeen grand opening in 2006, but if they lose the vote, there will be no opening at all. Stone concluded that a 188,000 s.f. Wal-Mart superstore would expand Aberdeen's trade area very little. The city's trade area is described as 100 miles to the east and west and 50 miles to the north and south. The study done by Wal-Mart said Aberdeen will be harmed if they don't get their own supercenter, because of new Wal-Mart supercenters in Watertown, ans Huron and Jamestown, North Dakota. While Wal-Mart likes to boast that it is a "retail magnet", Stone found that Aberdeen would lose jobs in the long run if a supercenter is built. "After netting out the gains and losses of employees, it is estimated that there would be a net loss of 135 employees after the opening of a supercenter," Stone told the Associated Press. Ironically, Aberdeen already has a Wal-Mart discount store, so the only new value is from the addition of a grocery store, which will close existing grocery stores. What Wal-Mart likes to do when it studies supercenter impacts, is to calculate how much money consumers will save. Their study in Aberdeen says that consumers will save $3.2 million to $4.7 million per year in consumer savings due to lower prices. Wal-Mart said people could expect to save hundreds of dollars a year on grocery bills alone due to new competition. Stone responded that such statements about consumer savings probably are exaggerated and based on incomplete information.

What you can do: Sprawl-Busters has shared Ken Stone's studies with citizens' groups across the country for years, while at the same time arguing that Stone's advice as a consultant to merchants is often mollifying and distracting. Stone has been hired by many Chambers of Commerce to help sell the idea that you have nothing to fear from Wal-Mart except fear itself. Yet this latest Aberdeen study is just one more marker along the roadside of Wal-Mart's devastating economic potential. Stores close, jobs are lost when Wal-Mart arrives. As competition withers and dies, those "everyday low prices" don't look so low anymore. The Wal-Mart study did not look at the potential impact on consumer prices as other grocery stores shut down, leaving Wal-Mart dominating the market. Any positive impact on prices is only short-term, because loss of diversity in the marketplace is bad for consumers. For earlier examples of Ken Stone studies, go to the Reading List page of www.sprawl-busters.com. For a copy of Stone's Aberdeen report, contact info@sprawl-busters.com. It is common for Wal-Mart to spend as much as $250,000 or more for a vote like the one in Aberdeen. The retailer doesn't like to lose such votes, and is willing to spend whatever it takes on PR, mailings, ads -- unlimited spending. Wal-Mart's idea of democracy is the party with the most money wins. Fortunately it doesn't work that way all the time, but money sure helps.










 
 
"Norman has become the guru of the anti-Wal-Mart movement" ~ 60 Minutes

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