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Major Flaws Uncovered in Study Claiming Wal-Mart Has Not Harmed Small Business

| Written by Stacy Mitchell | 1 Comment | Updated on Dec 1, 2008 The content that follows was originally published on the Institute for Local Self-Reliance website at

“We can firmly conclude that there is no evidence that Wal-Mart has had a significant impact on the overall size, growth, or profitability of the U.S. small business sector,” asserts a new study published in the October issue of the academic journal Economic Inquiry. The authors of “Has Wal-Mart Buried Mom and Pop?” are Dr. Russell Sobel, chair of Entrepreneurial Studies at West Virginia University, and Andrea Dean, a Kendrick Fellow in WVU’s Economics Department.

The study’s sensational findings have attracted significant local and national media attention, including featured interviews with Dr. Sobel in U.S. News & World Report and on Fox television, and blog articles on the web sites of Business Week and the Wall Street Journal. A shorter version of the study ran as the cover story in Regulation, the quarterly magazine of the Cato Institute.

Wal-Mart has also leaped on the study, producing a fact sheet that highlights key findings and quotes from the study. The fact sheetis being distributed in communities where the company is proposing new supercenters.

A close inspection of the study by the Institute for Local Self-Reliance, however, found fatal flaws.  The study, for example, relies on the wrong US Census dataset.  Using the correct data, our analysis shows that the number of independent retailers fell as Walmart grew between 1982 and 2002.

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About Stacy Mitchell

Stacy Mitchell is a senior researcher with the Institute for Local Self-Reliance, where she directs initiatives on independent business and community banking. She is the author of Big-Box Swindle and also produces a popular monthly newsletter, the Hometown Advantage Bulletin.  Connect with her on twitter and catch her recent TEDx Talk: Why We Can’t Shop Our Way to a Better Economy. More

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