Tuesday, September 27, 2005

We Come (Subsidized), We Sell, We Leave

As we have written about before, one very serious critique of Wal-Mart is that it has little connection to the community it serves and feel no compunction about closing stores in favor of building a supercenter a couple of miles down the road. The problem with this is twofold: municipalities often subsidize Wal-Mart’s entry into the town and they eventually become reliant on the tax revenue the box store generates (especially as other businesses such as supermarkets close). When the world’s largest retailer flees, the town feels duped for offering incentives and suffers from a reduction in sales-tax proceeds.

According to the Desert Sun, this very situation is happening in Cathedral City, CA where both the town’s Wal-Mart and Sam’s Club are moving. Cathedral City Mayor Pro-Tem is rightfully upset at the move:

"Wal-Mart loves to tell you they're a good corporate neighbor, they take care of the community; and that's just wrong, they're not," Cathedral City Mayor Pro-tem Greg Pettis said. "They come into a community and (we) anticipate we're going to make some long-term money and in essence we reimburse them for the sales tax they generate. They haven't done anything for this community."