Consumers flock to big-box stores like Wal-Mart in search of low prices. And big-box stores often drive smaller neighboring retailers out of business. How communities respond when the big boys come to town could make a difference.

Elena Irwin, associate professor and regional/community economist with Ohio State University Extension, and Jill Clark, program manager with the Retail Market Analysis Program in the Department of Agricultural, Environmental, and Development Economics, reviewed research findings about the impact that Wal-Mart and similar stores have on communities nationwide. Their 22-page report, “The Local Costs and Benefits of Wal-Mart,” is online at http://aede.osu.edu/programs/ComRegEcon/retail.htm.

While some of the studies analyzed made no differentiation between Wal-Mart and other big-box retailers, many specifically examined effects of Wal-Mart, Irwin said.

“There are definite costs and benefits associated with Wal-Mart, and they are not evenly distributed,” Irwin said. The clear winners are consumers; losers include smaller retailers attempting to compete head-to-head with Wal-Mart and, to a lesser extent, wholesalers; it’s a mixed bag for local governments and retail workers in the community, including Wal-Mart employees.

When Wal-Mart comes knocking on a community’s door, the best response would be to do whatever possible to minimize effects on those likely to lose in the big-box battles, Irwin said. Among the ideas outlined in the report:

• Plan for development. Communities can be proactive with zoning and development standards to address big-box retail before it comes to town. Community standards should consider the optimal timing and placement of large retail development so that it utilizes existing infrastructure, is consistent with the community’s master plan, and generates community benefits. This includes identifying locations and designing structures to attract people to other businesses and community assets near the new store.
• Promote existing retailers.
• Com­munities can help smaller retailers promote what they offer consumers that the big-box stores do not — customer service, special ordering, or distinct types of merchandise. In addition, road signs and promotional campaigns can attract out-of-town shoppers to other retail centers in the community.
• Educate consumers. Consumers vote with their dollars, but often the larger costs of low prices aren’t clear to them. Communities may consider public education campaigns to make consumers aware of the economic impact of their shopping decisions.
• Advocate for change. Communities could work with consumers to advocate for changes on a national scale to reduce the negative economic effects of today’s retail environment, including support for higher wages, health insurance, and other benefits, Irwin said. Such changes would level the playing field for all employers.