Chainification in Retail: Impact on Local Jobs and Shops

The proliferation of chain stores, particularly big-box retailers, has had significant and often detrimental effects on local jobs and businesses. A 2013 study revealed that within 15 months of a new Walmart opening, between 4.4 and 14.2 existing retail establishments closed, while at most 3.5 new establishments opened to replace them. This trend echoes the impact on the labor market highlighted by a 2008 study titled "The Effects of Walmart on Local Labor Markets." It found that for every retail job created by Walmart, 1.4 jobs were lost as existing businesses downsized or shut down, resulting in a reduction of county-wide retail payrolls by an average of $1.2 million.

Further illustrating these negative outcomes, a 2012 study focusing on Chicago demonstrated that the opening of a Walmart store led to the loss of approximately 300 full-time equivalent jobs in surrounding neighborhoods. A 2008 study on the retailing industry showed that the presence of chain stores like Walmart rendered nearly 50% of small discount stores unprofitable. This expansion of Walmart from the late 1980s to the late 1990s was responsible for 40-50% of the net decrease in the number of small discount stores and 30-40% of the decline among all other discount stores.