is the amount of sales volume a traditional supermarket lost when a Walmart Supercenter opened nearby, according to a 2006 paper by researchers at Carnegie Mellon and Northwestern universities.
The magnitude of the lost sales is quite alarming considering that supermarkets generally operate on a principle of low margins and high volume, with profit margins of only about 1%.
Six years, a court case and plenty of contentious debate after it was first proposed, construction is set to begin this month on a Walmart Supercenter.
The big-box store, located on Cerrillos Road south of Jaguar Drive, should be complete by September, the Albuquerque Journal reported Jan. 4.
But opponents of the store still worry about its implications—and whether an idea conceived years before the recession hit is still valid today.
“The first thing I think they were intending to address was the fact that there was so little opportunity for grocery shopping in that area, so a Super Walmart was going to address those needs,” Vicki Pozzebon, director of the Santa Fe Alliance, which advocates for local businesses, tells SFR. But in the six years since, Pozzebon says, both a Sunflower Farmers Market and an Albertsons have filled that gap.
“I’m wondering if a Super Walmart, six years later, is really necessary,” Pozzebon says.
Additionally, Walmart doesn’t necessarily reinvest its income back into the state. In 2006, attorneys for the state Taxation and Revenue Department ordered the company to pay $11.6 million to the state for income Walmart shielded through its Delaware-based affiliate. (Unlike New Mexico, Delaware has no corporate income tax.)
State Sen. Peter Wirth, D-Santa Fe,
to fix that loophole: Combined reporting, he says, would require Walmart and other out-of-state corporations to report all of their earnings and then pay taxes on a share corresponding to their in-state operations.
“The argument that’s being made now by the Walmart lobbyist to the Legislature [is]: ‘You pass this bill, and it’s going to hurt your constituents who shop at our store,’” Wirth says.
But Wirth maintains combined reporting would help low-income New Mexicans.
“The money the state is losing because of this unfair tax policy is hurting education; it’s hurting Medicaid. It’s hurting the same people that are shopping at Walmart,” Wirth says.