Do Walmart, Target & Home Depot Hurt The Economy?

Controversy around big-box stores like Walmart, Target, Lowes and Home Depot is nothing new, but communities are getting smarter about tackling these corporate giants — sometimes against considerable odds. In Cape Cod and a handful of other areas across the country, the Economic Impact Review is becoming a vital tool for handling development disputes and related issues. The review forces a detailed, thoughtful conversation on the true local economic impact of big-box construction. The result, reports Stacy Mitchell at Grist, can be empowering.

You might think opposition to big-box stores is limited to chichi communities with decided ideas about their look, feel, and “character” as evidenced in communities like California’s Sonoma, which has a long history of very rigid restrictions on development. It turns out, opposition to these stores is about more than whether they look attractive or preserve the historic heritage of a community. Many people are legitimately concerned about the local economy, and unfortunately, development review meetings commonly exclude this vital factor from the conversation.

While planning commissions can meet to discuss environmental impact, adherence to the building code, and a range of other topics, a conversation about the local economic impact may not be part of what’s allowed to take place in deliberations. The Walmarts of the world typically like it that way, because it keeps negative economic impacts from interfering with their profits. Such businesses often argue that they bring jobs and income into the community, when in fact, the opposite appears to be true — at least according to Economic Impact Reviews’ research.

Take Cape Cod, for example, which started integrating local economic issues into development policy in the 1990s. Mitchell notes that the Cape Cod Commission, a collective of 15 towns, has been embroiled in reviews for a new Lowe’s: “In a filing [PDF] with the commission, Lowe’s said the store would create 115 new jobs. But an analysis [PDF] by FXM Associates found that Lowe’s would not be adding to the economy, but rather siphoning off 10 to 20 percent of the sales at dozens of local hardware, lumber, appliance, paint, plumbing, and other stores. Declining revenue would force these retailers to lay off 163 people.”

Think that’s bad? “These threatened jobs pay about 25 percent more on average than Lowe’s does, meaning the store’s arrival would trigger a net decline in household incomes of $3.2 million annually. The drain on the region’s economy is even greater, the analysis notes, if you consider the fact that, unlike competing locally owned retailers, Lowe’s will purchase very little in the way of goods and services from other Cape Cod businesses.”

To look just at the Lowe’s report submitted to the planning commission that would be approving the development, it would seem like a boom for the local economy. But if you drill below the surface, you find that approving the development would actually be bad for local people, businesses and the economy overall.

Numerous cities across the US have considered moratoriums and other crackdowns on big box development, but the Economic Impact Review may be a smarter long-term solution when it comes to sustainable, smart and equitable development. It provides communities with the tools they need to fairly evaluate proposed developments and reject them if they don’t meet community needs. The more ways communities start talking about land use policy and sustainable development, the better. Because these are issues that are only going to grow in the coming years.

Photo Credit: From Creative Commons, By Sven


Jim Ven
Jim Ven2 years ago

thanks for the article.

Linda F.
.5 years ago

does using offshore slave labour help your economy?

Kevin Brown
Kevin Brown5 years ago

Really Diana S. you are blaming "unions" for your plight? If you were in a union you would not have been victimized by your employer like you were. And by you are now supporting the stores who make it their regular practice to victimize their workers. Do you see how this makes the problem worse, not better?

Yes, if things keep up the way they are people will only have enough money to shop at crappy places like Wal-mart, that is their plan. They want EVERYONE to be wage slaves who can only shop at their stores. It is a race to the bottom.

Oh, by the way, a recent study showed that if Wal-mart paid a living wage to its employees and passed 100% of the cost to consumers it would only cost the average Wal-mart customer 45 cents a shopping visit.,_it_would_result_in_almost_no_pain_for_the_average_customer

Diana S.
Diana S5 years ago


...goods and services we can actually afford - there are too many of us hard-working citizens who couldn't survive without them!!!

Diana S.
Diana S5 years ago

I got laid off four years ago, then got hired back by the same company three years ago through a temp agency, and had to take a $2/hr pay cut and no benefits for the "privilege." Did I forget to mention that the company I worked/work for is a small, family-owned business???

Damn' straight I shop at Walmart and Target and Home Depot, whenever I can! I also regularly download the deep-discount coupon offers to my Safeway club card, and shop there according to whatever's on sale!! If it weren't for non-union big-box stores, I and my three cats would be living in my car down by the river, and probably ending up eating barbecued RAT at least once a week for dinner!!!

Our world has been changing over the past 50 years or so - technology today wasn't even imagined in 1950! The family farm, the mom-&-pop local store, are all being slowly phased out, because it's much, much more cost-effective for these big box stores, who get deep-deep discounts for huge-volume buys of wholesale goods, and then pass on the discounts to their customers.

Savvy individuals now grow their own veggies and fruits in their own backyards, again because it's less expensive (and much SAFER) than buying from the grocery store, or the local farmer's market - and there's much less chance of getting seriously sick because some field worker took a dump and toxified the fields with their e-coli rather than walking a little way to the porta-potty!

Don't blame the big box stores for giving shoppers goo

Kimberlee W.
Kimberlee W5 years ago

As far as the above companies go, watch your back yard and show up at town council meetings. I've heard that some of the easements these companies demand can involve building roads for them, diverting school resource aid, avoiding local enviromental laws, taking of parts of your property, utilities, whatever by eminent domain, etc.
Is it really worth it to have a Home Depot,, in your town if they're allowed to dump excess pesticides into the local creek that leads to your water?
Or having your taxes hiked so you can pay for a road to improve their business?
Screw these guys! It's my damned Home! You want it? You want to do business here? First! You get my F'in' Permission! and then You follow OUR rules and Pay for your own needs! I'm tired of that Crap! Who's with me?
That's why you need to keep that 3rd Thurs. of the month open - - -

Kimberlee W.
Kimberlee W5 years ago

Now that my husband is making more money, I do feel it's my duty to try and shop smaller, more locally-owned businesses, even though I may pay 1-10% more.
My problem is when I do this and find I can receive either no or very poor customer service. That can be extremely frustrating. Or when I encounter a business owner where I wish to purchase more quantity in the future of an item and they will not only refuse to negotiate at all with me, but take umbrage at the very suggestion.
Hey - gimme a break here! I'm still dealing with humungous debts we've incurred trying to move up the ladder, trying to spread a little of the wealth, - do I really need small business owners to give me attitude?
Not all are like that, but a disturbing number of them are. I recall trying to hire some unemployed 20-somethings, couple yrs. ago, for $10/hr. just to haul some wheelbarrows of stone. I ended up having to do 60% of the work myself, had to keep interupting my work to keep up with reminding them I wasn't paying them to hang out and smoke and blew almost $600 for N A D A!!
Really Trying not to get too cynical, but it's getting harder every day. . . . .

Marilyn M.
Marilyn M5 years ago

All proposed new developments should be reviewed for their potential economic impact on the community.

Eternal Gardener
Eternal Gardener5 years ago


Christine Stewart
Christine S5 years ago

I apologize for loving my Target store. I do at least shop for groceries at my "Sprout's" store, instead of Von's...