Wal-Mart Effects the Economy

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Jim Lee
Eng 101: Reames
December 2, 2010
Wal-Mart Greatly Impacts the U.S. Economy
Is Wal-Mart ruining the local businesses in America? Most professional business men can agree that Wal-Mart affects the United States economy in many different ways. Wal-Mart is an American public corporation that runs a chain of large, discount department stores. It is the world's largest public corporation by revenue according to the 2008 Fortune Global 500. However this corporation has contraverisal issues about how they do their sales and the long term affects they put in the economy. Professionals will agree that Wal-Mart has hurt many community businesses as Wal-Mart open in areas around them. There have been common statistics for when a Wal-Mart opens and the affect they have. This paper focuses on the affect Wal-Mart has in rural areas and the views of professionals intake on this topic. Also this paper will feature how Wal-Mart will affect our feature. The target audience for this paper is people who are interested in the learning of the affects of large corporations vs small businesses. When analyzing the affects of Wal-Mart many researchers will agree with the fact that small businesses lose revenue when big corporation buy for low and sell also low to beat the competition. Stone (1997) states that “Studies in Iowa have shown that some small towns lose up to 47 percent of their retail trade after 10 years of Wal-Mart stores nearby” (Pg. 2). That is a big statistic to take in as the community will suffer from a high loss of the money for the community. Also the small business helps keep the economy in flow and when small businesses start to fail, people start losing jobs and people will move out of communities which hurts the communities. Stone (1997) comments that “It is believed that this decline in sales happened because Wal-Mart placed its own stores too close together, causing a predatory effect” (Pg. 6). This statement is true because Wal-Mart uses the predatory effect to drive competitors out of business. The predatory effect is the practice of selling products and services at a very low price intending to drive competitors out of business. That is how Wal-Mart has been dominant because of their ability to sell prices so low to attract consumers to continue to shop at Wal-Mart. Wal-Mart can do this because by attracting consumers to buy certain products at a lower price that other products are raised in value and consumers will shop throughout the store. The key is to get consumers to come to your business and Wal-Mart has almost perfected that. Overall Stone would agree with the idea of Wal-Mart is ruining the local businesses around America as Wal-Mart has become a fully national chain. Understanding this topic would be important because it can tell what we will see in the future of the economy. Many would agree with Stone like Goetz and Swaminathan with the fact Wal-Mart has effects in local communities. Goetz and Swaminathan (2004) states that “We offer three possible explanations for this finding, including that Wal-Mart stores destroy civic capacity in the communities in which they locate by driving out local entrepreneurs and community leaders” (Pg. 2). This statement connects with Stone as well as my point of view of this topic. Wal-Mart has downgrade the middle class economy with their style of retail sales and buying cheap products over seas. Goetz and Swaminathan (2004) quotes that “Local leaders and academic researchers are increasingly interested in the community-level effects of “big box” retailers and discount department stores” (Pg. 3). This has potential to have a positive outcome because America will realize that Wal-Mart has affected the United States so greatly that the government needs to step in and control how Wal-Mart conducts business. Wal-Mart has received considerable and mostly negative recent public media and Congressional attention, in addition to spawning a number of hostile web-sites as...
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