If people in a community have to drive three hours for food, then there will be enough demand that someone will open a grocery store. When there's an economic vacuum left by a closing superstore, other, possibly smaller, stores will come back and fill it. It's simple economics.

When a company such as Walmart opens or closes a large store, there seems to be a mass of news articles explaining how the opening or closing is destroying the community.

When a large store comes in, people rarely consider that the new jobs will have benefits and advancement opportunities not found in the traditional mom-and-pop stores. When a large store closes, people rarely mention that it will leave room for new mom-and-pop stores to open.

The fact is, large stores have a pluses and minuses. Their opening or closing is more a result of local economic conditions than the cause.

In the real world, you have edge cases where the supply/demand curves run out of room and no one has any capital left to open a grocery store.

This is the thing that I keep thinking about. If Walmart comes in and essentially extracts the wealth of the community (profits of the store) and then leaves, how long does it take for that community to recover? How long before they can actually afford to invest in more stores to fill the gap?

You're incredibly ignorant to the reality if you really think that a small town wiped of small businesses by Walmart will have any capital to start a grocery store when they leave. Have you ever actually lived in a small town where most if not all of the population is struggling to make ends meet?

Further, what the heck are you talking about with "benefits and advancement opportunities" at Walmart? The employees are on food stamps just to get by! Where does that leave them extra capital or "benefits" to that situation?

I'm actually in the grocery business and know the economics of opening stores - you can open a store for practically nothing: you start as a convenience store selling staples like toilet paper, long shelf life foods, local produce and whatever the owner makes themselves (ethnic food, apple pies, etc). Then, you slowly add SKUs as you grow.

The rich call this a "food desert," urbanites call this the bodega or corner korean market and europeans have zillions of these. I actually love shopping in these places - terrific & patient service and amazing finds if you're patient.

The food distribution business is beautiful that way - economies of scale are very gentle. It's the exact opposite of automobiles and infrastructure software.

p.s. amazon+UPS is another great stopgap for these communities, and surprisingly efficient if they setup a DC (distribution center) somewhere a few hrs away with more limited selection. It's the 2016 equivalent of the milkman.

As a matter of fact, I do live in a small town with a median household income of less than $30,000. There is a Walmart store. Most Walmart employees do not qualify for food stamps, but they do get health and other benefits not available at many local small businesses. There are relatively high paying jobs at the Walmart store -- much higher than are typically available at local small businesses. And, if a Walmart employee is willing to relocate, there is even more advancement potential.

I cannot imagine anywhere in the lower 48 United States where there could be a community in which people have to drive three hours to get food. If there is, the demand would certainly justify someone from inside or outside the community opening a grocery store. A large capital outlay would not be necessary.

>If people in a community have to drive three hours for food, then there will be enough demand that someone will open a grocery store. When there's an economic vacuum left by a closing superstore, other, possibly smaller, stores will come back and fill it. It's simple economics.

Real life doesn't always play out like simple (simplistic) economics.

E.g. sometimes nobody will do the investment to build one for years.

Or it will much smaller and more expensive that a Walmart, but enough to stiffle anybody opening a competitor.

Have you considered the possibility that this analysis is over-simple and serves a particular narrative.

Have you considered making a more thoughtful reply, one that actually challenges the comment you're replying to?

>Can you imagine not having anywhere to buy food and having to drive 3 hours just to get it?<

That's a very real and serious problem for low-income and fixed-income consumers...many of whom are forced to shop wherever they reasonably can...

There are many "food deserts"--areas where it's difficult to buy affordable good quality food--in the U.S., especially in sparsely populated urban and rural areas...

It's true that if the need (demand) is great enough in an area a retailer of some sort will probably eventually open shop to fill the void...waiting for that to happen can be very painful for the poorest consumers...

The best hope for communities abandoned by Wal Mart may turn out to be franchises related to the "dollar store" concept...

How Dollar Stores Were Planted in the South and Bloomed...

http://www.atlasobscura.com/articles/how-dollar-stores-were-...

Dollar Stores: Big Business, Rock-Bottom Prices...

http://tedium.co/2016/01/19/dollar-stores-analysis/

> Can you imagine not having anywhere to buy food and having to drive 3 hours just to get it?

But why wouldn't smaller stores open again now walmart is gone?

Edit: Say what you want about them being mom & pop stores that somehow cant start up again, if it takes 3 hours to drive to a shop and back there is a market opportunity. People will pay more for groceries when it doesn't involve a 6 hour round trip. I thought the idea of Americas great free market is that this void would be filled?

The old mom and pops bootstrapped organically, grew both inventory and the know how to stock it over decades, in lockstep with the community.

Today, takes a big start cost to go from zero to viable, and the lack of intuitive mom and pop know how is a risk too. In these locations, that startup money itself will be risk adjusted, so expensive.

There's probably a lot of truth in what you say. But, the economy abhors a vacuum, and there will either be "something" that starts up, or in some cases not and those towns may die. The dead towns will have a complicated story that in many cases will probably include the death of local businesses by Walmart.

If I ran 7/11 or Shell, I might be thinking about how to put in gas 'n goes with a somewhat larger retail footprint, a larger percentage of life groceries than potato chips. That would have the backing of a large corp, so the first yearly lack of profit wouldn't kill mom and pop's retirement, and comes with knowledge of running the outlet and managing supply lines.

Bonus, you're gonna gas up before you make that three hour grocery run, maybe what they have at the gas station is good enough, or reduces the number of trips you need to make.

I'm not sure you quite grasp how hardscrabble these areas are, and 7/11 and Shell are both franchise operations in the first place. The capital still needs to come from somewhere, and gas has worse margins than grocery in the first place.

I understand the area is hardscrabble. And yes, 7/11 and Shell are franchises, that's the point. It's a response to the idea that mom and pop might not be able to step up to serve the community. That would be preferred, but if they don't, it's still possible to reduce the need for three hour drives, with a BigCorp that already knows how to do retail and already has the lines in place.

There are lots of ways to fill a hole.

>But, the economy abhors a vacuum

In theory. In practice there are tons of areas that a vacuum exists for decades.

The same way there are tons of rural communities in the US where you still can't get an internet connection apart from dial-up.

Wouldn't the people who worked at that recently closed buy'n'large store know about this?

The knowledge you are referring to was never there in the first place. Large chains have largely centralized inventory management and the actual stores are little more than distribution centers and cash tills. And, even was that knowledge and capability there, the bigger problem remains that the invisible hand doesn't make the necessary capital to open a grocery store (and both its inventory and its plant assets) appear from nowhere. This is one of the trap corners that the unfettered free marketeers of the world would pretend don't exist, but they do and they're ugly.

Because the people that were running them and just barely getting by likely don't have the funds to open a new store. A lot of these places the building/infrastructure was just handed down generation to generation. Once it goes under, there's nothing left to start it back up.

That's why banks offer business loans.

And they won't make those loans in the absence of a viable business plan. (Plus, this isn't Silicon Valley. The prospective business owner is almost certainly going to need to put some of their own money in.) A lot of dying ex-resource extraction towns just don't present much of a business opportunity for anyone. I also suspect that a lot of readers here don't appreciate that really long drives to get to a "real" store is not that unusual across fairly large swaths of the US.

Try getting a business loan as e.g. a poor southerner ex-Walmart employee to open a new grocery store in Indianola, MS or Forkland, AL or tons of even smaller places...

With what capital? More likely that these old mining towns and more rural communities wont exist in a few generations. With younger people moving to the cities to find whatever work they can.

Opening a store is not exactly cheap. There are no VCs that will front you the money but you have to risk your own.

I smell a startup opportunity.

A really bad one. Grocery stores are very low margin business.

Well, yeah. Starting up a mom & pop grocery store.

It very well could 10x on you, too.

What does that have to do with my short analysis of Amazon's tactics? It's rude to call someone heartless without basis in fact.

I'm extremely skeptical that this article is propaganda.

What evidence do you have for that?

None whatsoever.