According to a new study, the development of a local Walmart proves to be quite the bargain for communities looking for an economic boost.
Lon Hatamiya of the Hatamiya Group conducted a fiscal analysis of communities with Walmart Supercenters and compared the results to similarly-sized communities without the retail giant. The findings indicate that Walmart Supercenters support regional job creation and encourage growth of small businesses, in addition to increasing sales tax revenues in the communities where they are located.
“I first launched this study in 2008 and found similar results,” said Lon Hatamiya. “It’s clear that communities with a Walmart Supercenter experience overall positive economic benefits to a local economy when compared to a community without a Walmart Supercenter.”
The study sampled a random selection of California communities with varying populations where Walmart Supercenters have opened since 2003. Researchers quantified the Taxable Retail Sales and Retail Business Permits and compared the results to communities without Supercenters, resulting in an economic impact analysis of year-to-year changes.
Researchers further compared data from the years immediately preceding and following the opening of a Walmart Supercenter in order to determine if economic growth could appropriately be attributed to the establishment of a Walmart.
Some of the findings include:
– Total Taxable Retail Sales in communities with Walmart Supercenters increased by an average of 20.3% after the opening of those stores, while communities without Supercenters saw an average decrease of 11.7% over the same time period.
– Total Retail Business Permits in communities with Supercenters increased by an average of almost 50% after the opening of those stores, while communities without only saw an increase of 20.3% over the same time period.
Civic leaders across the state were neither fazed nor surprised by the findings.
“Oceanside was fortunate to be the location of the first Walmart Supercenter in San Diego County,” stated Oceanside Councilman Jerry Kern. “Since the opening of that store in 2009, the area has continued to be a commercial magnate and economic engine for our city. Walmart’s presence attracts other businesses and keeps people shopping – good news for our city and for the local business owners.”
“I hope this study will resonate with some of the naysayers who refuse to acknowledge and accept the positive impact Walmart has in cities,” stated Fontana Mayor Acquanetta Warren. “Walmart brings economic benefits to cities, so these findings are of no surprise.”
As of last fall, Walmart has 105 Supercenters, 96 Discount Stores, 42 Neighborhood Markets, 33 Sam’s Clubs, and 7 distribution centers in California. Walmart directly employs over 81,000 people and indirectly supports the jobs of over 150,000 supplier careers.
The sales tax collected on behalf of the state of California by Walmart amounts to more than $887.9 million, and Walmart itself paid more than $163 million in state and local taxes to the state of California and other various local governments.
Hatamiya served as the secretary of the California Technology, Trade and Commerce Agency—the state’s primary promoter of economic development, job creation and business retention—from 1999-2003. During this time, Hatamiya advised Governor Gray Davis on matters related to commerce and trade.
The Board of Equalization provided the detailed data and reports on each of California’s 58 counties and 272 of the largest cities. Population statistics were provided by the California Department of Finance.
View the full study here.