As a matter of fact, Walmart is one of the renowned largest corporations in the world with an estimate of more than one million employees and revenues in excess of two hundred and fifty billion dollars. Wal-Mart continuous and steadfast growth traces back to the founders who pioneered in inventing a business model that is captivating and a sophisticated supply chain management and assertive cost-cutting measures.
In essence, Wal-Mart revolutionized model has indeed shaped the patterns of local retail as well as wholesale trade notwithstanding transportation and distribution of goods and services. Remarkably, Wal-Mart has a wide range of products sold at lower prices as compared to other competing outlets. Incidentally, Wal-Mart hires a huge number of local workers as well as generating considerable property tax and sales tax revenues for the local communities. However, over some period of time, Wal-Mart has received frequent criticisms and protest from communities. As such, much of the criticisms are rooted in the perception that new Wal-Mart stores have a threat to indigenous local retail stores.
On account of the economic impact of Wal-Mart, the effectiveness with which these stores links producers with it consumers allowing them to price their goods well below its competitors. Additionally, particularly in the rural areas, Wal-Marts often offer an array of goods for their customers to select from. More precisely, it evident of ‘Supercenters’ which sell products from groceries to clothing, hardware as well as optical services. Wal-Mart availability of products coupled with lower prices clearly provides a direct economic benefit to the locals.
Apparently, the capability of Wal-Mart to sell goods below their competitors’ levels, characterizes a profound threat to the feasibility of other adjacent retail facilities. With respect to that, it would be inevitable that some of these new establishments would be pushed out of business whenever a new Wal-Mart sets in forcing other into downsizing.
In instances where other establishments are stocking goods not offered by Wal-Mart, there is the tendency of them being positively affected due to the proximity to Wal-Mart. Such businesses that enjoy this particular privilege include household furnishings stores as well as restaurants. However, during the assessment of Wal-Mart impact on the employment levels, there are some fundamental issues that are depicted.
Empirical evidence indicates that there is an entire change in local employment emanating from Wal-Mart establishment. As a matter of fact, the county level of employment effects over the period between the 1970’s and late 1990’s indicated that for every one hundred new opportunities developed by a new Wal-Mart fifty retail jobs were lost to competitors. However, the creation of new employment opportunities is a fundamental indicator of local economic impact whose net effect is community-wide income earnings. Contrary to this, Wal-Mart business model of assertive cost-cutting mechanism and its total disregard towards unionization of its employees reflect their lower pay-package.
Based on the worldwide establishment, Wal-Mart evidently generates a significant amount of tax revenue from sales tax and property tax revenue. The fiscal benefit derived from the revenues has a great impact on the local government in the local city or county where Wal-Mart establishment is located. Needless to say, comprehensive assessment of the fiscal effects on new Wal-Mart needs cautious consideration to identify the extent to which the tax revenues as compared to other tax revenues. In instances where we are considering the effect of Wal-Mart on sales tax, the fundamental aspect is the extent to which customers basically drift from one highly prices local store to Wal-Mart during purchases. In essence, the entrance of Wal-Mart means that there are the high chances of overall increase in sales leading to increasing of sale tax revenues.