Tell Us: Has Wal-Mart Helped Small Town Iowa? ISU Study Says Yes

has long had a reputation of hurting small towns when their behemoth pop up, but a new study by economic professors suggest that reputation may not be fair.

The study, "Revisiting Wal-Mart's Impact on Iowa Small Town Retail: Twenty-Five Years Later," looked at the economies of communities with populations of 3,000 to 20,000 in a period of 15 years before and after Wal-Mart opened.

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Co-authors Ken Stone, an Iowa State emeritus economics professor, and Georgeanne Artz, a visiting assistant professor of economics in ISU's College of Agriculture and Life Sciences, found moderate increases in total retail sales in the 15 years following Wal-Mart opening.

The study looked at 28 Wal-Mart host communties and 20 control communties without a Wal-Mart.

Many of the communities where Wal-Mart opened were experiencing a drop in retail sales, which stopped after Wal-Mart. But, it's not all positive, especially for competing businesses.

Stone said one of the take aways should be how communities perceive big box stores and whether they should offer financial incentives.

"This is a much longer-term study and it shows that among the Wal-Mart host towns, their total sales went up and stabilized, and they became more of the regional trade centers," said Stone, one of the nation's leading experts on the economic impact of Wal-Mart in small towns. "But one has to keep in mind that most of that gain was by Wal-Mart stores, and they did have negative impacts on a lot of other businesses in town -- mainly any store that was selling essentially the same thing they were selling.

"The few towns in our population group that don't have a Wal-Mart store fared better than I had expected," he continued. "They too were declining [in retail sales] before Wal-Mart came in, but they kind of stabilized at that lower level from Wal-Mart. And I think it's because nearly all of them got a regional chain store like an ALCO, or a Dollar General. And in particular, I think every one of them had a good chain grocery store like Fareway or HyVee. So again, they sort of had a critical mass of retail stores to retain people there and it's my contention that most people don't really want to drive any farther than they have to to shop."

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