Facts About Wal-Mart And Local Economies

Background on Wal-Mart’s Exploding Growth Affecting America’s Towns

· Last Year Wal-Mart Opened 312 Stores in the United States. In its Fiscal Year 2005 alone, Wal-Mart added 36 discount stores, 242 Super Centers, 21 Neighborhood Markets, and 13 Sam’s Clubs to their empire in the United States. [SEC, form 10-K for FY2005]

· Wal-Mart CFO Shoewe: 950 New Supercenters Have Already Been Planned Internally. “[T]he bottom line is there is a tremendous opportunity, something just under 4000 Supercenters that can be added to what we already have here, and 950 of those have already gone through the internal process -- internal real estate process that is just awesome.” [Wal-Mart CFO Tom Schoewe, Remarks at the Wal-Mart Shareholders' Meeting Presentation to Analysts, 6/3/05]

Wal-Mart Eliminates Business from Local Shops when it Enters a Community

· Wal-Mart Effect on Grocery Markets: Most People In The U.S. Spend More Money In Grocery Stores Than In Any Other Type Of Store. One Iowa State University study of Supercenter impact on local economies showed a food store market sales decrease of 10% in the counties studied one year after opening, and a decrease of 19.2% by the fifth year of operation. [Stone, Kenneth E.; Artz, Georgeanne; Myles, Albert, The Economic Impact of Wal-Mart Supecenters on Existing Businesses in Mississippi]

· Wal-Mart Effect on Specialty Stores: Drug stores, sporting goods stores, book stores, gift shops, are examples of specialty stores. A study of Iowa communities showed an 8% decrease in specialty store sales the first year a Wal-Mart store opened in town. The study showed a decrease of 13.9% after 5 years. [Stone, Kenneth E., Competing with the Discount Mass Merchandisers, Iowa State University]

· Wal-Mart Effect on Apparel Sales: The study of Iowa communities showed even more dramatic data for clothing sales. The first year after a Wal-Mart store opened in a town, other apparel retailers lost 7.9% of their sales. After five years, the figure was 17.9%. [Stone, Kenneth E., Competing with the Discount Mass Merchandisers, Iowa State University]

Wal-Mart Builds Stores with Public Subsidies, Takes Away Funds for Local Spending

Wal-Mart has Received Over $1 billion in Public Subsidies. Despite $10 billion in profit in 2004 alone, Wal-Mart relies on state and local governments to provide tax breaks and to pay for roads and utility connections at many of its new stores and distribution centers. A May 2004 report by Good Jobs First documented that Wal-Mart has received more than $1 billion from at least 244 taxpayer-funded subsidies. [Mattera and Purinton, Good Jobs First, “Shopping for Subsidies,” May 2004, http://www.goodjobsfirst.org/pdf/wmtstudy.pdf]

Examples of Wal-Mart Subsidies. The public money Wal-Mart receives comes in the following forms: Free or reduced price land, Tax Increment Finance (TIF) districts, Infrastructure assistance, Property tax breaks, State corporate income tax credits, Sales tax rebates, Tax-exempt bond financing, Enterprise Zone status, Job training/recruiting funds, General grants. [CITE]

Other Uses for Public Funds Given to Wal-Mart:

· Property taxes are usually used by municipal governments for things like schools, road repair, garbage pickup, and other such services [Legal Information Institute, Cornell University].

· Bond money: companies seek and receive bond money because the interest rate is very favorable, as the loan is guaranteed by a government agency. This is taxpayer money they’re borrowing.