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Study Confirms Wal-Mart's Entry into Communities Has Detrimental Impact on Variety of Local Businesses

  • Prior research into the impact that Wal-Mart€™s entry has on incumbent retailers has focused mainly on the incumbent retailers€™ sales and other outcome measures. Little is known, however, about how incumbent retailers adapt their marketing mix activities in reaction to the Wal-Mart entry.
  • Costco has a large line of private label products. People who do not want to buy name-brand products and pay the premiums can buy similar products created for Costco and buy them at a substantial discount. The trend is moving to Wal-Mart (WMT) and, because of its size, the move could cost premium product producers a lot of sales.
  • Via Independent Street, I see a new study on how Wal-Mart affects small retailers.  The study found that when Wal-Mart comes into town, local mass merchandisers, supermarkets and drug stores all see significant sales declines. For supermarkets, cutting prices only "mitigates" the harm, and doesn't work at all for mass merchandisers and drug stores, the study found.
  • Attention grocers: If Wal-Mart opens a store near yours, don't try to copy it by lowering your prices. It won't help, and it may hurt, according to a new study.
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