I recently took a trip to Atlanta, Texas. Atlanta is an East Texas town of about 6500 people. As I drove through “downtown” Atlanta it was clear that that any resemblance to its namesake in Georgia was in name only. It was named after Atlanta, Georgia because many of the early settlers were from that area. It was a typical one street downtown as I have seen in other small Texas towns such as Olney, Boyd and Archer City (where the classic movie The Last Picture Show was filmed. Streets like you would see in any “Route 66” town across America. As is standard in small Texas towns, there is a barber, candy shop, bank, hardware store, bakery, sporting goods store, few antique stores and of course a Dairy Queen. The staples of life that can be cut and pasted to countless small towns across America. There were also numerous boarded up storefronts.

The Atlanta Chamber of Commerce Web Site states:

“Atlanta exemplifies small town America. Warm smiles and warmer greetings reflect a friendly and progressive community.”

What Atlanta and other small towns all over the country never envisioned when they were formed (Atlanta was founded in 1872) that small town America would one day be synonymous with the arrival of Wal-Mart. Some would compare it to the arrival of the Evil Empire and its Death Star. Darth Vader, who was unmasked many years ago, didn’t initially destroy these towns with his death ray. He arrived with the promise of “we come in peace”. The Death Star then set down in the middle of town, touting every possible convenience a person could want at cheaper prices, with greater diversity and quantity. Unfortunately no Jedi Knights ever came to the rescue. They were to busy fueling up their Starfighters at discount prices.

Now, instead of seeing the sign “Victory tonight and free haircut tomorrow” if the high school football team or basketball team wins, you see “Going Out of Business Liquidation Sale.” How can the “It’s A Wonderful Life” dream of small town America possibly compete with the neon lit entrance to the Death Star just a block away? Instead we see “The Last Picture Show” at the local theater just before it closes. The residents of Atlanta, Texas leave the theater and disappear into the Death Star and are never heard from again by the local merchants.

As I drove through downtown Atlanta, the town seemed dead. I do not mean dead in the lack of people. I mean dead in spirit and any vision of a brighter economic future. It was as if a death ray was fired out of space vaporizing a once-thriving small town and replacing it with boarded up stores, liquidation sales and a stagnant economic future. It was an almost ironic predatory invitation for its own residents to pick off the bones of what they had built over decades. I stopped a local resident walking down the street and asked what she thought about the future prospects of Atlanta, Texas. Into my ear came the deafening yell, “Wal-Mart did this to us!” I thought about it and it made perfect sense. What are the economic consequences of the Wal-Mart Death Star landing in virtually every small town in America? For every action there is a reaction.

Wal-Mart is the world’s largest retailer - with 1,489 Mega-stores, 1,397 Super Centers, 532 Sam’s Clubs, and 56 neighborhood markets in the U.S. alone as of 2003, and close to a thousand more abroad from Argentina to Germany. Wal-Mart is now the single largest private employer in the U.S. with 1.1 million “associates” and higher earnings than the gross national product (GNP) of 150 countries! In 2003, Wal-Mart sold 19% of all groceries in the U.S. and recorded $9 billion in profits.

A study of small towns in Iowa revealed a loss of over 7,300 businesses from 1983 to 1993 due to a radical shift in consumer spending to chain stores like Wal-Mart. Five years after a superstore opens, small towns within twenty miles experience a 19% decline in business. For every 100 Wal-Mart jobs created, it is estimated another 150 jobs are lost. Is low-cost competitive pricing destroying the very entrepreneurial spirit that built this great country?

For every action there is a reaction. When Wal-Mart is offering $4 prescriptions as an action, I think the law of physics is pretty clear that “Joe’s Soda Jerk Shop and Pharmacy” that has been there since 1932 is going to suffer. They will hang a sign on the door stating they they lost their home so others could have the cheaper prescriptions they no longer afford.

Are Sam Walton and kin the Darth Vadars of the one-stop shop? I wouldn’t go that far but I did start thinking of the moms and pops who put their blood, sweat and tears into those shops dating back to the Great Depression. They’re now bankrupt, can’t even afford the new $4 prescriptions, and are too proud to enter the Wal-Mart Death Star. People who at one time had a dream are becoming so desperate that meth labs are now outnumbering local retail shops in some of these small towns. There is always welfare. I have yet to see Wal-Mart advertise that they are handing out any discount welfare checks.

Does Wal-Mart bring positives to a community? You can ask ten people and get ten different answers. What’s yours?

©2008 Brian Cuban