Walmart has a good story to tell and my economic impact study that was recently released by the company is a chapter in that chronicle. I started my research in 2008 analyzing the impact of Walmart Supercenters on California communities. Each time I’ve conducted these studies, I’ve utilized the retail taxable sales and retail business permits data as reported by California communities to the California Board of Equalization (BOE). And each time the facts point to the same conclusion – Walmart Supercenters support new job creation, small business growth and increased sales tax revenues.
Interestingly, I added an element to my 2014 study by looking at communities without Walmart Supercenters and comparing the results to similar-sized communities with Supercenters. On average, communities with Walmart Supercenters experience positive gains in taxable retail sales and an increase in the average number of retail business permits. What’s more, similar-sized communities in both northern and southern California without Walmart Supercenters either experienced a decline in average taxable retails sales or fell short when compared to a similar-sized community with a Walmart Supercenter. And in some cases, both occurred.
Total taxable retail sales in communities with Walmart Supercenters increased by an average of 20.3 percent after the opening of those stores. Total taxable retail sales in communities without Supercenters decreased by an average of 11.7 percent over the same time period.
Even more interesting is the point that businesses do not close up shop after a Walmart Supercenter comes to town. On average, California communities with Walmart Supercenters experienced even stronger gains in the number of retail business permits issued than those communities without Supercenters. Total retail business permits in communities with Supercenters increased by an average of 48.5 percent after the opening of those stores. Total retail business permits in communities without Walmart Supercenters also increased, but only by an average of 20.3 percent over the same time period.
And the benefits are even greater in smaller to medium-sized communities that have fewer economic development options. Cities with population less than 50,000 experienced, on average, the greatest growth in taxable retail sales. But what I found most compelling is that my research examined a period of time when we were facing the worst economic recession since the Great Depression.
The facts in this study tell a story and stand on their own merit. Supercenters have measurable and proven positive economic impact on California’s economy, and more specifically, on local communities.
Lon Hatamiya with the Hatamiya Group conducted the study. Mr. Hatamiya previously served as California’s Technology, Trade and Commerce Agency Secretary in Governor Gray Davis’ Administration. In this role, he was the state’s primary promoter of economic development, job creation and business retention. Additional background on Mr. Hatamiya can be found at http://www.hatamiyagroup.com.