As surely as summer follows spring, it seems like every new Walmart store opening announcement in a major city is now followed by protests. The nation’s capital is no exception.
Walmart announced late last year that it plans to open four stores in the District of Columbia. Predictably, the local union of the United Food and Commercial Workers was not enthused. UFCW Local 400 President Thomas McNutt went so far as to call Walmart “a wolf in sheep’s clothing,” because it’s nonunion. In reality, UFCW doesn’t want greater competition for its own employers.
However, union self-interest isn’t the only motivation that animates some Walmart critics. Self-styled community activists decry Walmart for … well, changing things. A typical such critique is a Washington Post letter to the editor by D.C. restaurateur Andy Shallal, who raises the alarm that Walmart would change the “character” of neighborhoods and add to a pattern of “destroying” local businesses, while preemptively dismissing “any academic research” that would contradict his assertions.
Try as Shallal might, he cannot dismiss research that contradict his opinions so easily. As a CEI study that analyzes the history and economics behind the anti-Walmart hysteria notes, the cant about Walmart killing downtowns is just that. Its author, Zachary Courses, says:
A handful of academic studies have analyzed the impact of Wal-Mart and other large discount retailers’ effects on the communities they enter. One of the ? rst studies, by John Ozment of the University of Arkansas and Greg Martin of the University of Wisconsin, used U.S. Economic Census data to determine the effects of what they called discount retail chains (DRCs) on rural business environments in three southern states. Looking at the period 1977–1982, and looking at county level data, they determined that overall DRCs bene?ted the communities they entered by increasing wages and employment, and strengthening other businesses that did not compete directly with the new DRC. Counties that did not have a DRC experienced an overall decline in per capita retail sales and payroll. And while counties with DRCs experiences a 3.5 percent reduction in the number of retail establishments over five years, counties without a DRC experienced a much greater loss of 10.9 percent. The authors conclude that the presence of DRCs “may create alternative opportunities for businesses that are unable to compete with large discount retail chains,” and “new businesses emerge that provide either services or products that complement the DRC’s offerings.” The picture of rural business implied by their research is a much more adaptable one, in which rather than shutting down retail activity, the presence of DRCs actually stimulates dynamic local retail growth.
While some local businesses may lose some sales, preventing losses is not a sound basis for formulating public policy. Markets are not static, and neither are urban landscapes. George Mason University economics professor Don Boudreaux puts it well in a response to Shallal:
So, yes, Wal-Mart’s operation in D.C. would indeed “water down” that city’s characteristic tic of allowing the abstract fancies of economically illiterate elites to trump both the actual entrepreneurial doings of businesses seeking to serve consumers and the wishes of those consumers themselves.
Unfortunately, as Shallal’s dismissal of “any academic research” he disagrees with indicates, sound economic arguments are a tough sell to those who hate chain stores based on ideological conviction. At Spiked Online, Frank Furedi explains how powerful attachment to the-way-things-are can be. In Britain, retail giant Tesco has become a similar object of opprobrium as Walmart is in America. Significantly, the attacks on Tesco have been joined by far-right nationalists, as well as as trendy lefty urbanites.
At first sight, the fact that the anti-Tesco consensus can win support from both far-right nationalists and trendy countercultural activists seems to make little sense. Yet while these two different groups might have very different opinions on various social and political issues, they express a very similar attitude towards change and uncertainty, and they view the future with fear, almost as an alien territory.
Of course, we’ve seen this before.
In the United States, there were frequent populist-led campaigns against the Sears Roebuck and Montgomery Ward corporations in small towns. These corporations were accused of destroying local businesses and communities. Populist activists, helped by the local media, organised boycotts and demonstrations against what was perceived to be an invasion of big-business interests. The main target of the anti-chainstore movement of the 1920s and 1930s was the Great Atlantic & Pacific Tea Company. Like Tesco today, the A&P Corporation was a massive business. It operated over 15,000 outlets and by 1930 it was the fifth largest corporation in the US. Although the American anti-chainstore movement never became as intensely xenophobic as its continental counterpart, it nonetheless expressed the sense of impotent rage – one which is still expressed today by consumer activists suspicious of change.
Fear of change is understandable. The problem is using it as a basis for policy, which retail unions are happy to exploit.