The debate around the benefits of superstores is often dominated by irrational fears, political grandstanding, heavy handed union thuggery, and misleading arguments based on emotion. It’s a tired conversation and one I’ve never personally bought into.
A study just published by the Hatamiya Group, and commissioned by Walmart, shows that Walmart Supercenters in California are a plus for communities and support job creation, spur the growth of small businesses, and increase sales tax revenues in the communities where they are located. The study shows that Walmart Supercenters bring positive economic benefits when compared to similar-sized communities without a Walmart Supercenter – using public data pulled from the California Board of Equalization.
Before you attack the study as biased, consider this: Lon Hatamiya, the author of this study, is an economist who served Governor Gray Davis as Secretary of the Technology, Trade and Commerce Agency. With his background as an economist and public servant, he’s a unique individual who is hardly part of the evil Koch Brothers network.
So what exactly did the Hatamiya study find? In part…
− Total taxable retail sales in California communities with Walmart Supercenters increased by an average of 20.3 percent after the opening of those stores, while total taxable retail sales in California communities without Walmart Supercenters decreased by an average of 11.7 percent over the same time period.
− Total retail business permits in California communities with Walmart Supercenters increased by an average of 48.5 percent after the opening of those stores, while total retail business permits in California communities without Walmart Supercenters increased only by an average of 20.3 percent over the same time period.
To re-iterate those points, there was a 32 percent tax revenue swing between cities with a Walmart Supercenter and those without one. And Supercenters didn’t kill off businesses; they actually helped create more.
The statistic about an increase in retail business permits is a real game-changer. While Walmart has the capacity to boost any city’s revenue base on its own, the fact that it attracts other business owners to open shop flies in the face of opponents’ common argument that superstores put mom-and-pop stores out of business.
The fact of the matter is that Walmart attracts other businesses – this study shows it with hard numbers and anyone who has ever parked in a Walmart parking lot would know it. From Sacramento to San Diego, you will find chain office supply stores next to family-owned restaurants next to yogurt shops — all in the same shopping center with a Walmart. When a Supercenter opens, it becomes a magnet for economic activity and that’s because business owners know that Walmart gets customers through doors.
Walmart has a real, positive impact on California’s economy. A measurable one.
I’ll close by adding that this study covers a period of dysfunctional governance, billions in higher taxes, and record-high unemployment in California, where it is near impossible to open a successful business. That makes these Hatamiya numbers even more impressive.
It looks like the facts surrounding the positive economic benefit of Walmart stores specifically (and no doubt all supercenter-type stores) speak for themselves.