Big box stores are large retail establishments. They are also known as chain stores, superstores, supercenters or megastores. A big box store is “a stand-alone building typically significantly larger in size than traditional stores and often uniform in appearance” (Big Box Stores 3). Thus, one can find similar big box stores in different locations. Generally, big box stores are categorized into two- general merchandise for example Wal-Mart and specialty stores that deal with specific goods like electronics for example Tesco. The establishment of big box stores in the community raises a debate and people have contrary opinions about these chain stores. Some favor them while others oppose their establishment. Big box stores have both merits and demerits to the economy.
Big box stores are large and some of them are chains. This factor enables them to negotiate favorable prices with their suppliers hence they are able to sell their wares at very low prices. The stores benefit from the large volumes of goods they sell thus can afford to set low prices. The large stores that use technology for example optical scanners have a low cost in restocking hence they can pass this benefit to consumers. This is an advantage to the consumers because they can get goods at cheap prices (Villarreal 1).
Consumers are also able to get all the goods they require under one roof hence convenience in shopping. This saves consumers time they would have used hopping from one store to another. The consumers not only enjoy this convenience but inexpensive products. The big box stores lead to increased sales volumes, which translates to big sale taxes to the local governments. The tax is used to fund local services hence improve the economy (Villarreal 1).
Critics of big box stores say that they have a negative impact on the economy. This is because most of the big box stores lead to lower wages. A study done by Marlon Boarnet and Russell Crane on the impact of big box stores in California show that they will lead to lowering of the industrial wage and benefits (Big Box Stores 5). Furthermore, the study found out that the big box stores give less cover on health insurance and thus reduce health coverage for its employees. This means that the employees cannot enjoy the full benefits of health cover and can only receive low quality care.
Big box stores undermine smaller businesses and often drive them out of business, as they are not able to compete with the stores’ extremely low prices. When such small businesses are pushed out of the market, people lose jobs and the local governments lose revenue. The stores destroy many jobs than they create and pay less thus “does less to stimulate the local economy” (Big Box Stores 5). Moreover, the big box stores such as Wal-Mart receive large tax subsidies and are able to skirt taxes due to tax loopholes (Mitchell xi). The stores are able to offer low prices and give low salaries to their employers giving them an undue advantage over small business. Lieber sums this point clearly,” where one of these giants is competing against a small business that is responsible to its workers and to the community, the giant will win every time” (1).
Undoubtedly, big box stores have an impact on the economy. Both the critics and opponents of these stores raise fundamental points. The government should regulate the stores and come up with a policy that will eliminate the tax loopholes. Clearly, the stores influence the economy both negatively and positively and a middle ground should be sought to reduce the negative effect to keep enjoying the benefits that come with big box stores.
Works Cited
Big Box Stores. Jwj.org. 2004.
Lieber, Sally. Wal-Mart’s welfare dependency. commondreams.org. 2003.
Mitchell, Stacy. Big-box swindle: the true cost of mega-retailers and the fight for America’s independent businesses. Boston, Massachusetts: Beacon Press, 2007.
Villarreal, Pamela. Thinking outside the Big Box. 2005.