Studying Wal-Mart

Supporters and opponents of proposed Wal-Marts and similar stores across Maine have plenty to disagree on – the changes the stores bring to a town’s character, environmental concerns, the health of downtowns. But they should not have to battle over economic data that could give a clearer picture of the stores’ effects. The State Planning Office could help move the debate forward by providing information about how local and regional economies are changed by these stores.

There are plenty of studies already about the large discount stores that show, depending on who did the study, when it was done and where, a wide range of results making the stores either a crucial part of a local economy of a killer of mom-and-pop businesses. But given that the Wal-Mart debate has taken place in Belfast, Bangor, Newport and other places around Maine and is likely to take place elsewhere, having the state do its own study, especially on the new Wal-Mart “Supercenters,” makes sense. As a BDN story last week by reporter Jeff Tuttle highlighted, there is a chasm of opinion in Bangor over the stores’ actual effects, leaving the public uncertain about whom to believe.

If Maine has an expert on the economic effects of Wal-Mart, it would be Les Bray of Gorham. Mr. Bray operates Main Street Insights, which looks at business activity in Maine. He conducted a limited study of the 19 Wal-Marts in Maine in 1998, updated in 2000, using a “pull factor” – a Wal-Mart community’s per capita sales compared with the state average per capita sales – to determine whether the presence of a Wal-Mart resulted in increased sales in an area. His conclusion was that, particularly for smaller communities, Wal-Marts heralded a decline in sales: “(71.4%) of Maine communities with populations of 20,000 or less experience[ed] a declining pull factor.”

Mr. Bray found further that businesses driven out of a community by the development of a Wal-Mart tended to be replaced by stores of lesser value, so the community experienced a loss in revenues as a result. This is an area of study that should be pursued further as “supercenters” expand here, targeting large grocery stores.

A more comprehensive economic study might also look at the net effect on local property taxes where Wal-Marts exist. It should look at the difference, if any, in the wages and benefits to employees in the longtime vs. the new mega stores. It should look regionally at the effect in surrounding communities and examine the potential cost of future lost tax base there or whether that tax base is so badly eroded now that it now longer matters.

Loss of tax base in non-Wal-Mart communities bear directly on the community hosting the Wal-Mart in the form of, for instance, state aid to education. Such a study should be of particular interest to local chambers of commerce, which have both the interests of existing businesses, large and small, and the attraction of new ones, such as Wal-Mart, as part of their agenda.

Having an economic study on Wal-Marts in Maine won’t end the debate over their development – activists would still have environmental, aesthetic and social reasons for sending out petitions and attending city council meetings. But a major argument within this debate could be, if not settled, at least quieted so that the public could better understand what the two sides are shouting about.