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2013-12-07
Byram, MS. Another Small Town Mayor Falls for Wal-Mart's Voodoo Economics

Byram is a small community in Mississippi with only 11, 721 people. If anyone in Byram is addicted to cheap Chinese imports, there's a Wal-Mart superstore in Jackson, Mississippi just 6.5 miles away, and two more Wal-Mart superstores in Richland and Clinton, Mississippi less than 9 miles away.

Byram was obviously not a top tier pick for Wal-Mart, but despite several of its other superstores nearby, Wal-Mart has excited small town officials in Byram by indicating their interest in this community. A 4th Wal-Mart in the area, however, represents mostly retail cannibalism--since a Byram superstore will only take sales from Wal-Mart's existing superstores, rather than add sales to the bottom line. Some sales will be "captured" from other grocers in Byram, like Krogers, Jitney Super Center, and Vowell's Market Place. But Wal-Mart sales per square foot at its own nearby superstores will be diluted.

The Mayor of Byram seems oblivious to this voodoo economics. Mayor Richard White told the Clarion-Ledger newspaper this week that he is talking with Wal-Mart about a 185,000 s.f. superstore for tiny Byram. Wal-Mart is stepping up its store growth this year as the effects of the recession wear off.

For Mayor White, having a Wal-Mart come to Byram is like being touched by Elvis. "We have been hoping that a major retail anchor would locate in Byram," the Mayor told the newspaper, " as it would bring more people and shoppers to our great city. We realize that our citizens do not have a lot of shopping options and are therefore forced to go to neighboring cities - this results in a loss of sales tax revenue to the city of Byram."

But its not that simple.

There's not much hard economic data to back up such a statement, and clearly the Mayor has not spent any time with the grocery stores already operating in Byram. Yet the Mayor adds, "Assuming Wal-Mart makes its entrance into our city, we feel this will be a great attraction for additional retail businesses and restaurants." Is this a hope, or solid economic conclusion?

The Mayor went on, sounding like a Wal-Mart script: "In addition, this will create new jobs for citizens of Byram. With the increase in people and shoppers coming to Byram, I believe the local small business owners will benefit from this activity. We would also welcome Wal-Mart as a great community partner as they typically support area schools, civic and charitable organizations."

Wal-Mart couldn't have said it better.

But a Wal-Mart Director of Public Affairs went on to claim that their new superstore would help Byram by "creating hundreds of new quality jobs, stimulating economic development and by serving as a committed community partner." This is pure fuzzy math.

The retailer was careful to point out that all they have done at this time is "entered into the site evaluation phase" in Byram, and that any formal store announcement would "take several months" In the meantime, shoppers in Bryram can continue to drive 6 or 9 miles to the three Wal-Mart superstores they already have.


What you can do: It is remarkable how the media will print a story like this, quoting a Moonstruck Mayor and a retail PR person---but providing no analysis of the downside that might result from this over-saturation of a small trade area with big stores.

The economics underpinning this store are questionable even for Wal-Mart, which has acknowledged in the past that packing superstores every few miles cannibalizes its own same store sales.

Readers are urged to email Byram Mayor White with the following message:

"Dear Mayor White,

Be careful about sounding like a Wal-Mart press release. Before you start counting the 'new' jobs that you think another supercenter in your area will bring, or the added sales tax revenue, spend some time talking with the managers at Kroger, or Jitney or Vowell.

Ask them privately about the sales impact---because publicly all these grocery stores will tell the media there will be no impact---they will be fine---and next thing you---their store is closing and people are being thrown out of work.

If a manufacturer came to Byram to make computer capacitors---that would be "new" jobs---because their market is global. But this new Wal-Mart superstore has a trade area of 5 miles, because any further out, you have other Wal-Marts already open. So this store is designed merely to take away market share from existing merchants in Byram.

Retail is largely a zero sum game. You can add more and more food stores, but that does not make families buy more bananas. In the end, you will shift some sales, steal some business from Jackson or Richland stores, but this is not economic growth for the area, and after you pay for the cost of police and fire protection, food stamps for Wal-Mart workers, and their Medicaid health care---these new stores are an economic loser for local and federal taxpayers.

It's not too late to save this land for a far more productive use. Ask Wal-Mart to pay for the cost of an independent economic impact statement. You might not like what you learn."










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

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