Monday, November 2, 2015
What happens when Wal-Mart opens a Supercenter?
Stossel's conclusions are supported by Academic Research: when Wal Mart opens a supercenter (grocery store), they offer "many identical food items at an average price about 15%-25% lower than traditional supermarkets." This raises welfare for consumers by about 20% of their food expenditures. In addition to the direct effects of another option for consumers, there is the indirect benefit of increased competition on rival prices, an additional 5%. And these effects are much bigger for poorer consumers.