Dr. Moj Seyedian
Impacts that Walmart has on hometown economies were analyzed in a presentation co-authored by a recent graduate and Professor Moj Seyedian.
“The Economic Impact of Large Retail Chains on the Small Town Businesses: the Walmart Case,” compiled by Chidozirim Ohia-Enyia, who received a degree in Business Administration earlier this year, and Dr. Seyedian, was presented Oct. 28 at the International Academy of Business and Public Administration Disciplines (IABPAD) Conference.
The IABPAD conference brings together scholars, practitioners and thought leaders from around the globe to explore new trends and innovations in business and public administration.
“By analyzing data on Walmart's expansion patterns and their effects on local businesses in different cities and communities, we hope to gain a better understanding of the economic dynamics at play,” Seyedian said.
Mr. Ohia-Enyia researched the topic for an independent study course and was mentored by Seyedian.
“We studied the literature, analyzed what it was saying and summarized it,” Seyedian explained, and offered suggestions for small communities to combat the closing of small businesses and the subsequent dampening of the entrepreneurial spirit. Providing tax incentives and consulting services were among strategies that can help mitigate negative impacts and assist small businesses and startups, Seyedian suggested.
The impacts large retail chains have on local businesses and communities has been a subject of extensive debate and study in recent years, according to Seyedian, a faculty member in the School of Business.
“One of the most prominent examples of this phenomenon is the expansion of Walmart into local communities across the United States. Walmart, with its massive size and buying power, has the potential to significantly disrupt local economies and businesses.”
Seyedian’s study concluded that Walmart's expansion into local communities has generally had a detrimental impact on local businesses, leading to a decrease in their competitiveness, economic viability and to a community’s overall well-being.
“The presence of Walmart in a local area often leads to a decline in the number of local businesses, a reduction in their revenue and a negative impact on the economic health of the community,” he said.
Food retailing is one of the largest economic sectors in the United States, with food retailers generating over $877 billion annually in sales. Walmart’s growth from its first discount store in 1962 to its dominance as the top food retailer in the United States has raised concerns about its effects on smaller businesses and local economies, Seyedian said. Walmart operates thousands of stores in the United States that employ millions of people.
Studies have shown that the presence of a Walmart store in a local area can lead to increased competition for local businesses, often resulting in closures, Seyedian said. Additionally, Walmart's pricing strategies and supply chain practices can put pressure on local businesses, making it difficult for them to compete, the study found.
“By analyzing data on Walmart's expansion patterns and their effects on local businesses in different cities and communities, we hope to gain a better understanding of the economic dynamics at play,” Seyedian said.
