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Wednesday, April 13, 2005

The Wal-Mart Effect

Tech Central Station:

Boone, North Carolina (named for the famous Dan'l) is a college town nestled in the rustic mountains of Appalachia. The population is divided roughly among groups of students, locals, and the academic elite. Such a microcosm of American diversity works in its own way. The locals realize how much money the university brings in. The students love the Smoky Mountain amenities and the bluegrass music. Academics find the local folkways charming and complementary to their status as, well, elites. But when Wal-Mart decided to come along in the 90s, locals, students, and academics also had a common purpose to bind them: to keep Wal-Mart out. As it often does, Wal-Mart won. And since then, Boone has experienced the Wal-Mart effect. First, some Mom-n-Pop shops in Boone may have gone out of business due to the intense competition. But something interesting has happened: many new businesses have sprung up and they're cooler, more interesting, and more highly specialized than most of the old ones were. Mom-n-Pop have decided to move into more boutique-style businesses -- and not even Wal-Mart can compete with that.
Read the whole thing, a very interesting way of looking at it. As is so often the case with any economic analysis, the negative effects tend to be obvious while positive effects are subtle and more difficult to see. Cheaper goods benefits a local economy in numerous ways, and to the extent that Wal-Mart supplies that, they are a huge benefit. There are other reasons to criticize Wal-Mart. I personnally find the stores too crowded and noisy to enjoy shopping there, the hassle isn't worth the extra saving to me. (via Running for the Right)


Anonymous GUYK said...

It is tough to compete with the box stores but it can be done. Price, as any retail merchant well knows, sells a product. But, so does value and service. I recently sold a small retail business that was within three blocks of a super Walmart store. When the Wallie world first opened my sales dropped by 25%. However, within a couple of months I regained my old customers and started to pick up new ones. The trick was carrying consummer goods that Walmart didn't stock and at least meeting WALMART prices on good that it did stock plus the additional touch of personal service.

In many cases it is impossible to compete with the box stores, especially on imports. But, keep in mind that individuals can also import. I joined with several other small businesses that sold the same goods that I sold and we started to import ourselves. The strength in numbers allowed us to buy in volume thus buy cheaper and enabled us to compete with the box stores.

Competition is usually good for the consummer and if small business uses their heads good for them also. The marginal small businesses go out of business and the wiser ones come out ahead.

4/13/2005 02:27:00 PM  
Blogger Dave Justus said...

It is nice to see someone who has actually expirienced this confirm my thoughts on the matter.

Thanks for the info guyk.

4/15/2005 07:33:00 AM  

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