Wal-Mart Effect

AAA

DEFINITION of 'Wal-Mart Effect'

The economic impact felt by local businesses when a large firm such as Wal-Mart opens a location in the area. The Wal-Mart effect usually manifests itself by forcing smaller retail firms out of business and reducing wages for competitors' employees. Many local businesses oppose the introduction of Wal-Marts into their territories for this reason.

INVESTOPEDIA EXPLAINS 'Wal-Mart Effect'

The Wal-Mart effect is not all bad; it can also curb inflation and help to keep employee productivity at an optimum level. The chain of stores can save consumers billions of dollars, but may also reduce wages and competition in an area.

RELATED TERMS
  1. Carlos Criado-Perez

    Former CEO of U.K.-based Safeway PLC. Carlos Criado-Perez was ...
  2. Antitrust

    The antitrust laws apply to virtually all industries and to every ...
  3. Oligopoly

    A situation in which a particular market is controlled by a small ...
  4. Monopoly

    A situation in which a single company or group owns all or nearly ...
  5. Price Fixing

    Establishing the price of a product or service, rather than allowing ...
  6. Monopolist

    A person, group or organization with a monopoly. In other words, ...
Related Articles
  1. Analyzing Retail Stocks
    Fundamental Analysis

    Analyzing Retail Stocks

  2. A History Of U.S. Monopolies
    Personal Finance

    A History Of U.S. Monopolies

  3. The CEO Dream Team - Walton, Schwab, ...
    Entrepreneurship

    The CEO Dream Team - Walton, Schwab, ...

  4. Evaluating Grocery Store Stocks
    Economics

    Evaluating Grocery Store Stocks

comments powered by Disqus
Hot Definitions
  1. Due Diligence - DD

    1. An investigation or audit of a potential investment. Due diligence serves to confirm all material facts in regards to ...
  2. Certificate Of Deposit - CD

    A savings certificate entitling the bearer to receive interest. A CD bears a maturity date, a specified fixed interest rate ...
  3. Days Sales Of Inventory - DSI

    A financial measure of a company's performance that gives investors an idea of how long it takes a company to turn its inventory ...
  4. Accounts Payable - AP

    An accounting entry that represents an entity's obligation to pay off a short-term debt to its creditors. The accounts payable ...
  5. Ratio Analysis

    Quantitative analysis of information contained in a company’s financial statements. Ratio analysis is based on line items ...
  6. Days Payable Outstanding - DPO

    A company's average payable period. Calculated as: ending accounts payable / (cost of sales/number of days).
Trading Center