Wal-Mart Effect

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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.

BREAKING DOWN '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.

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RELATED FAQS
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    The difference between a monopoly and monopsony lies in the entity that is being singularly controlled. A monopoly exists ... Read Full Answer >>
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    Electronic retail is one of the fastest growing segments of the economy. Every year, more people are choosing to purchase ... Read Full Answer >>
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    Just-in-time (JIT) inventory management focuses solely on the need to replenish inventory only when it is required, reducing ... Read Full Answer >>
  4. What are some common ways product differentiation is achieved?

    There are many ways to achieve product differentiation, some more common than others. Horizontal Differentiation Horizontal ... Read Full Answer >>
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    The unemployment rate and Consumer Confidence Index (CCI) rank as two of the most important economic indicators to consider ... Read Full Answer >>
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