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Posted on June 8th, 2012, by

Nowadays, discount chain stores, such as Wal-Mart, Target, Costco, are steadily growing and becoming widely spread. The commercial success of the discount chain stores is, to a significant extent, predetermined by the obvious advantageous customers can benefit from by shopping at the discount chain stores, among which low prices are viewed as the most important advantage compared to conventional retailers. However, such an approach to the discount chain stores seems to be not very reasonable as customers are basically attracted by low prices that, being beneficial in short-term, can hardly outweigh the costs the customers and community will have to pay in a long-term perspective.

First of all, it should be said that opening new stores by such giants as Wal-Mart, Target, or Costco often is not accompanied by the consultations with local community, or, at least, the position of the local community can be simply ignored. In such a situation, the opening of new discount chain stores may be quite harmful for customers and local communities, not only economically but also morally and culturally. For instance, the opening of a store by Wal-Mart in Mexico in 2004 provoked a serious opposition from the part of local historians, archeologists, and community at large since the new store was built nearby the Teotihuacan Pyramid of the Moon and could and actually did damage historically important areas.

Nonetheless, the negative economic effect, being less obvious, is much more important and harmful for customers.

In this respect, it should be said that the discount chain stores create a number of problems, including traffic and environment problems. In fact, these two problems are closely interrelated since the former naturally engenders the latter. To put it more precisely, the discount chain stores target at large amount customers. Naturally, this contributes to the increasing level of traffic and resulting environmental problems, which, in their turn, may lead to health problems customers, or people living in the nearby areas can suffer from. What is more, it is the local community that as a rule deals with these problems while discount chain stores practically ignore them.

Furthermore, the economic impact on the local business may be also quite harmful. In this respect, it should be said that small towns where discount chain stores are situated lose a substantial part of their retail trade. In such a way, smaller stores tend to gradually disappear, being unable to compete with such giants as Wal-Mart, Target, or Costco. As a result, people living in these areas are loosing their jobs and small businesses.

Naturally, the supporters of the development of the discount chain stores may argue that they create new job places and, consequently, minimize the harm caused to the local community, or even create really new job opportunities minimizing the rate of unemployment in the area.

However, in actuality, this argument turns to be absolutely unconvincing since, as a rule, the discount chain stores create new job places but this is a part-time job mainly. Practically, it means that the job places created by the discount chain stores cannot be regard as absolutely equal to those full-time jobs that people often loose as a discount chain store is opened nearby. And even those people who get employ at such a new store can hardly bear the existing conditions of work since often the wages are low. In this respect, it is even possible to say that the wages in the discount chain stores are as low as their price and both gradually kill the local business and deteriorate the position of the community since businesses can afford low prices while people either loose their jobs or are employed part-time and receive low wages that results in the high level of turnover at the discount chain stores.

Finally, it should be said that it is actually the local community, or the local tax-payers, who are forced to pay for the harmful socio-economic effects of the discount chain stores. The reasons is quite obvious since low wages, stagnation or disappearance of small business lead to the increased need in social support of the larger strata of society creating an additional burden of the tax-payer services. No wonder that this burden is particularly difficult for the local tax-payers who do not have such a potential as the discount chain stores.

Thus, it is possible to conclude that possible benefits of the discount chain stores are provisional, while, in actuality, their effect on the local community and business are extremely destructive.

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