It’s a common story: Wal-Mart supercenter opens, local businesses close. Net impact: no real gain in tax base for the community. Most recent case in point comes from the Duluth, Minnesota News Tribune, which reports that the Midtown Jubilee grocery store in Superior, Wisconsin will close this month, “a casualty, owners say, of increased competition from the new Wal-Mart supercenter.” 26 people at the store will lose their jobs. Midtown Jubilee is about six blocks from the Wal-Mart supercenter, which opened in mid-May, replacing a smaller Wal-Mart discount store. So it took less than two months for Wal-Mart shoppers to close down the Jubilee store. “We had no preconceived notion of what was going to happen” when the 203,000-square-foot supercenter opened, the owners of the Jubilee market said. The News Tribune quotes a study from Ohio-based Retail Forward which says that Wal-Mart’s “aggressive expansion will continue to wreak havoc and steal share away from conventional food, drug and mass retailers at an alarming pace.” In Superior, sales fell at all three of the Jubilee stores after the supercenter opened, but “the other (two Jubilee) stores came back quite rapidly,” the owners said.
Retail Forward claims that for every one Wal-Mart supercenter that opens, two existing grocery stores will close. The retail analyst projects that Wal-Mart’s U.S. grocery sales will reach a 35% share of supermarket industry sales by 2007. It is just over 20% today. Local officials who say they want to support existing businesses in their tax base, are doing damage by shifting market share to Wal-Mart.
