Retail: Think Outside The Big Box

The “Walmart effect,” as defined by US investigative reporter Charles Fishman, occurs when “Wal-Mart, or any big-box retailer, comes into town, reshapes shopping habits, and drains the viability of traditional local shopping areas or mom-and-pop shops.” Walmart and its peers redefine the markets that they enter, changing consumption habits over time, and this factor combined with the company’s ability to underbid other retailers, means inevitable economic displacement for those involved in the existing system.

Not only are small retailers put out of business when large retailers like Walmart enter; in some instances modern retail may also create fewer jobs than it destroys.

PDF: Walmart’s Global Track Record and the Implications for FDI in Multi-Brand Retail in India

FT: Retail: Outside the big box