Yves here. It seems that my family and friends don’t indulge in large-scale shopping at massive retailers. The few times I accompanied them to places like Walmart or Costco, it was solely to grab a couple of items quickly. One Walmart visit was particularly disheartening; the staff appeared worn down and the atmosphere was almost unbearable.
Nonetheless, this article offers a thought-provoking analysis that convincingly argues that megastore operators have hit upon a successful formula. These oversized outlets not only siphon off sales from smaller competitors but also encourage consumers to overspend their money.
Yet, the belief that “bigger is always better” doesn’t hold water in all instances. We canceled our Costco membership primarily due to the overwhelming size of the store. My mother needed specialized in-ear hearing aids, which were reputed to be the best available, and Costco offered them at a significant discount. After purchasing the membership and securing an appointment, it became a daunting challenge for me, with impending hip replacements, and my mother’s aide to navigate the hectic pick-up and drop-off area and traverse the difficult terrain of concrete inside the store. We were required to complete three separate visits for testing, fitting, and a follow-up, but we couldn’t even manage to finish one.
I often ponder how many other customers, whether with mild impairments or serious disabilities, find themselves in similar situations. While many stores provide motorized carts, they are often cumbersome to use and can feel undignified. Unfortunately, these carts frequently bear the stigma of being associated with obesity.
By Suvrat Dhanorkar, Associate Professor, Georgia Institute of Technology. Originally published at The Conversation
Imagine exiting a Walmart, Target, or Costco. As you push your full shopping cart towards your car, you might find yourself wondering: Did I really need all of this?
Chances are, the answer is no.
A recent study conducted by my colleagues Lina Wang, Sungho Park, and myself found that the rise of supercenters—large retailers combining groceries and general merchandise—significantly increases consumer waste stemming from overbuying.
Supercenters often occupy lots exceeding 150,000 square feet, but understanding how such expanse influences shopping behavior is complex. Numerous factors impact how much consumers purchase on any given trip.
To explore this issue, we examined the expansion of Walmart supercenters across the U.S. over a decade. We employed a technique known as difference-in-differences, comparing consumer waste trends in counties with new supercenters to “matched” counties without them. The matching process ensured that these counties were similar in other socioeconomic aspects, such as housing, income, and education.
Our findings indicated that the introduction of a supercenter leads to an increase in consumer waste of up to 7%. Notably, this rise in waste was more pronounced for newly opened supercenters compared to existing stores being converted to supercenters.
Why It Matters
For years, neighborhood stores in the U.S. have faced elimination by large-format retailers such as department stores, supercenters, and shopping malls. While evidence suggests that some of these retailers are beginning to shift towards smaller stores, the prevalence of supercenters continues to shape the shopping landscape.
These colossal retailers promote mass consumption by gradually altering consumer behaviors. For instance, they often set prices lower than local shops in their quest for higher sales.
Walmart’s “everyday low price” strategy exemplifies this approach, providing customers with consistently low prices throughout the year as opposed to relying on seasonal sales.
The locations of supercenters, typically far from residential areas, further drive overbuying. To avoid the inconvenience of multiple trips, shoppers tend to fill their carts to maximize each visit.
Unfortunately, this leads to significant waste as many items expire or remain unused at home.
While this strategy may benefit retailers financially, it poses serious implications for society and the environment, resulting in billions of dollars in waste. To put things in perspective, the United States generates close to 300 million tons of consumer waste annually, costing billions to manage.
What Still Isn’t Known
Having quantified the “supercenter effect,” our next steps involve investigating potential solutions to this issue. Some present solutions advocate for policies that encourage changes in consumer behavior. For instance, several cities have introduced a pay-as-you-throw policy, which assesses charges based on the volume of waste produced.
Other options are structural, such as revitalizing neighborhood convenience stores and strengthening circular economy channels. Neighborhood stores could help counterbalance the supercenter effect, facilitating smaller, more frequent shopping trips and dramatically reducing waste.
In various cities, initiatives promoting local vendors and shops are gaining traction. Such measures not only promote sustainable consumption but also spur local economic growth by supporting small businesses, which historically account for 62% of net new job creation.
A second avenue is making better use of the “reuse economy,” which facilitates the circulation of surplus and pre-owned goods. This could include offline and online channels like thrift stores, food banks, and platforms like Facebook Marketplace, which are largely underutilized.
Identifying and rigorously implementing these solutions could yield both economic and environmental benefits. However, additional work is necessary to determine which strategies are most effective, and the reasons behind their success.
