post-holiday catchup: Walmart in NYC

26 Dec

In the crushing buildup to the holiday, I nearly missed this scuffle in New York over Walmart’s ongoing effort to open stores in the city.

Manhattan Borough President Scott M. Stringer released a report a couple weeks ago suggesting that adding a Walmart to Harlem would force local businesses to close. That’s a reasonable fear, given the company’s track record, but the report relied heavily on a similarly themed and widely-questioned report from Chicago—and one of the authors, called to testify before NYC’s City Council, had to admit that there was ultimately no net job loss. (No clear word on whether people just ended up working at Walmart instead of other food stores, and what happened to their wages and work hours.)

I think there’s a more interesting question to ask: What if Walmart’s prices aren’t always lower? I’ve been interested in the emerging body of research looking at what happens to food prices over time when Walmart comes to town. Most studies rely on snapshots, collecting prices from stores over a one- or two-week period; in those, Walmart usually wins on average (though not on everything, particularly produce). But it’s important to ask what happens over time.

Researchers in Wisconsin found that when Walmart (or other supercenters) opened up shop, prices didn’t go down over time. But as other stores closed shop, reducing competition, prices went up. So it’s worth asking: Say we let Walmart open up. Even if the overall number of jobs doesn’t drop, what incentive do they have to

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