Economic Analysis: The Impact of Walmart on the US Economy

This report investigates the economic impact of Walmart on the United States. It begins with an introduction highlighting Walmart's significant presence as a major retailer, its substantial sales, and its contribution to the GDP, as well as its role as a major employer. The report's purpose is to assess Walmart's influence on employment, sales, and prices, and its overall impact on the US economy. The literature review examines previous studies with mixed findings on Walmart's effect on local retailers, with some studies showing negative impacts on smaller towns and others suggesting opportunities for non-competing businesses. The methodology section outlines the use of quantitative methods based on data collected from the retailer's website, consumer spending, employment, income, consumer credit, and inflation data. The conclusion summarizes that Walmart has gained a competitive advantage and contributed positively to the growth of the US economy despite potential impacts on smaller retailers, and continues to contribute significantly to the country's GDP and employment.

Running head: MANAGEMENT
Topic: Is Walmart Good for America
Name of the Student:
Name of the University:
Author Note:

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Abstract:
This research study focuses on the aspect of whether Walmart is good for America in terms
overall economic growth. Walmart is considered as one of biggest retailers of United States. The
study further tries to investigate and establish long relationship between Walmart and the
economy of US based on economic variables like profitability, sales and employment.
Keywords: Walmart, US economy, GDP, economic growth

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Table of Contents
Introduction:....................................................................................................................................3
Purpose and Scope:..........................................................................................................................3
Literature Review:...........................................................................................................................4
Methodology:...................................................................................................................................4
Conclusion:......................................................................................................................................4
References:......................................................................................................................................6

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Introduction:
Walmart has been one of the largest retailers of United States with close to 3900 stores.
Walmart has an annual sales of over $270 billion and contributes to about 2.9 percent of the
gross domestic product for United States. The overall sales of Walmart has been larger in
comparison to some of the biggest retailers like Kroger, Home Depot, Costco, Target and Kmart.
Walmart happens to be the Universal retailer with 42 percent Americans claiming that they go
there for shopping every week (cdn.corporate.walmart.com, 2019). The retailer has been found
to serve close to 19 million customers on a day to day basis. It was also found that 9 cents of
each US dollar gets spent on a Walmart store. The retailer sells 30 percent of the staple goods
and has been considered one of the largest grocers of US. Walmart also happens to be one of the
largest employers of US employing closer to 1.3 million people. Thus, Walmart is a dominant
firm of United States whose operations signaled the trends in the overall economic conditions.
Nevertheless, it could also have an impact on overall economy. The report will to provide an
insight about whether Walmart is good for America in terms of economic measures.
Purpose and Scope:
The objective of the study will lies in assessing whether Walmart is good for America in
terms of employment, sales and prices thereby leading to positive impact on the overall
economy. The study will focus on the distinguishable linkage between Walmart and the
economic variables thus reflecting the different dimensions of the economy of US.

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Literature Review:
Previous research studies have tried to analyze the impact on Walmart on local retailers
within the US economy. Mostly the results have been inconclusive or mixed depending on the
major data sets. According to Ellickson & Grieco (2013) the presence of Walmart has an adverse
impact on the retailers of smaller town compared to those staying in the larger town. The
retailers who has been competing with similar product lines as that of Walmart experiment
greater losses in comparison to business that offered non competing products. On the other hand,
Peralta & Kim (2019) successfully portrayed that the entry of Walmart into market led to the
expansion of opportunities for the non-competing business. Shabbir (2015) put across that the
entry of Walmart led to a minimal decrease in the overall retail establishments. This was opposed
by Taillie, Ng & Popkin (2016) who after analyzing the markets of Northeast came to a
conclusion that neither the overall establishments nor the sales reduced due to presence of
Walmart and bigger business possessed a tendency of responding aggressively to the completion
of Walmart in comparison to the small retailers
Methodology:
This particular research will undertake a Quantitative method based on data collected on
the gross sales derived from the retailer’s website along with data on consumer spending,
employment, income, consumer credit and inflation.
Conclusion:
In conclusion, it can be said that past research on the Walmart has been able to gain a
competitive advantage in terms of innovation, efficiency, customer responsive and quality
amongst its competitors. Walmart has not only contributed positively to the growth of US
economy despite reducing the sales of some of the smaller retailers. The sales in Walmart has

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also contributed substantially to the gross domestic product of the country in the past and is
expected to do so in the present. The retailer also employed huge and a diverse workforce thus
keeping pace with varying consumer demographics.

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References:
cdn.corporate.walmart.com, 2019. [Online]. Retrieved from
https://cdn.corporate.walmart.com/c0/24/2383f0674d27823dcf7083e6fbc6/2015-global-
responsibility-report.pdf
Ellickson, P. B., & Grieco, P. L. (2013). Wal-Mart and the geography of grocery
retailing. Journal of Urban Economics, 75, 1-14.
Peralta, D., & Kim, M. K. (2019). Big‐Box Retailers, Retail Employment, And Wages In The
Us. Review of Urban & Regional Development Studies, 31(1-2), 102-117.
Shabbir, M. S. (2015). Why Manufacturers are Less Powerful than Retailers in Trade Circles? A
Case Study of Wal-Mart Retailing Business. Business and Economics Journal, 6(4), 1.
Taillie, L. S., Ng, S. W., & Popkin, B. M. (2016). Walmart and other food retail chains: trends
and disparities in the nutritional profile of packaged food purchases. American journal of
preventive medicine, 50(2), 171-179.