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

"Planetizen federal action tracker" logo superimposed over black and white image of US Capitol dome.

Planetizen Federal Action Tracker

A weekly monitor of how Trump’s orders and actions are impacting planners and planning in America.

October 28, 2026 - Zachary Whalen

A car drives through a puddle, making a large splash. Rain pours down.

California plans to bury El Niño’s downpour

If the state plays its cards right, it may be able to store a billion acre-feet of El Niño’s water in aquifers.

October 28, 2026 - Grist

A pencil rendering of Foundry Park, which shows skyscrapers and public green spaces.

Chicago breaks ground on $3 billion megadevelopment

The new neighborhood, titled Foundry Park, will one day host 3,700 residences.

October 23, 2026 - Chicago Sun Times

A swamp in South Carolina with tall pale trees and Spanish moss in the water.

Satanic place names

From streams and lakes to valleys and canyons, I mapped more than 1,000 places named after the Devil.

October 31 - The Daily Yonder

A rendering of a high speed rain station in California, with wide platforms and a sleep train with yellow highlights.

California High-Speed Rail Authority CEO resigns after $600,000 scandal

Under Ian Choudri, the authority used taxpayer dollars to fund first class flights and trips to nightclubs.

October 30 - Cal Matters

 A bridge stretches across the Missouri River at Chamberlain, South Dakota.

Want to study the Missouri River? Soon, you may need unanimous approval from 10 states

Legislation would require 10 governors’ permission to study or build projects moving water outside the basin.

October 30 - South Dakota Searchlight