Study Calls Into Question Walmart's Economic Development Bona Fides

A study just published in Economic Development Quarterly documents the geographical destruction on local businesses wrought by a new Walmart store, and raises questions about its long-term impact on sales tax revenues, reports Nate Berg.

1 minute read

September 17, 2012, 7:00 AM PDT

By Jonathan Nettler @nettsj


The study, authored by a team led by University of Illinois Chicago economics professor Joe Persky, looked at the effect of the opening of a Walmart store on existing businesses and found a direct geographic correlation with rates of closure.

"No matter which direction you go from Walmart, there's a very high rate
of business closures in the immediate vicinity, and the further away
you get there's less and less," says Persky. According to Berg, "Persky and his colleagues found that for every mile closer to the
Walmart, 6 percent more stores closed. Close in around the store's
location, between 35 and 60 percent of stores closed." 

"The research also shows that during the study period, from 2006 to 2008,
overall sales tax revenues went down in the two ZIP codes closest to or
encompassing the Walmart," notes Berg. 

Granted the study only focused on the effect of one Walmart store, located in the Austin neighborhood of Chicago's West side. It also failed to "include any data on stores that opened during the 2006 to 2008 period, just those that closed."

"Walmart disputes these findings and argues that its stores are magnets for both growth and economic development," says Berg.

Friday, September 14, 2012 in The Atlantic Cities

Young Professional

I love the variety of courses, many practical, and all richly illustrated. They have inspired many ideas that I've applied in practice, and in my own teaching. Mary G., Urban and Environmental Planner

I love the variety of courses, many practical, and all richly illustrated. They have inspired many ideas that I've applied in practice, and in my own teaching.

Mary G., Urban and Environmental Planner

Get top-rated, practical training for planners

Overlapping highways

The state-sanctioned urbicide of Austin

People don’t kill cities. Freeways do.

September 8, 2026 - Benjamin Schneider

The Hoover Dam blocking the Colorado River. The river's water level is noticeably low. The cliffs surrounding the blue water are brown and jagged.

US to reduce Colorado River water deliveries to Mexico

A new Colorado Treaty amendment reduces Mexico’s Colorado River water allocation by 250,000 acre feet.

September 11, 2026 - The Arizona Republic

Skyscrapers in Jersey City.

New Jersey’s second-largest city bans standalone data centers

Jersey City will continue to allow co-location facilities, such as those meant for research institutions that store their own data.

September 4, 2026 - The Cool Down

A New Jersey train approaches people waiting at the station.

Amtrak not solely to blame for New Jersey commuter rail's unreliability, report finds

A new study from the Garden State Initiative found that NJ Transit’s budget grew 20% across a 4 year period, but reliability declined significantly over the same period.

September 15 - Mass Transit

A tall, gray power plant billows smoke into a blue sky.

EPA erases limits on planet-warming pollution from power plants

Under Monday’s plan, power plants would still have some limits on how much mercury, arsenic and other contaminants they can emit.

September 15 - New York Times

A white RAPID bus. The lower half is light blue, and says RAPID in purple text. The bus is half visible, appearing from the left side of the image.

Phoenix announces new on-demand transit service, more frequent RAPID buses

Both new services will launch in October, and are part of Phoenix's Project Effective Access Solutions for Easing Congestion.

September 15 - KJZZ

FREE Course: Walkable City 1: Why Walkability?

After describing his path towards focusing on walkability as the essence of good planning, Jeff Speck marches through his five principal reasons for making more walkable places.

Reinventing Malls: Planning Alchemy—Turning Gray Fields Into Gold

The course focuses on the opportunities and imperatives that shape reinvention of mall sites.