Does Wal-Mart have uniformly low prices, or do they rise prices if they manage to kill the competition? If they stay low, then it's understandable they are thriving - there's a lot of folks for whom 10% lower price, even for somewhat inferior product, is huge.

In cities that are real cities (that is, that have mixed residence/shopping/business/civic functions in every neighborhood, all within walking distance) megastores are not killing small shops, but suplanting them. For example, I have within three minute walk a bakery and a small grocery (both open till 10pm seven days a week). Within five minutes are other two groceries (you could call them convenience stores), three bakeries, a butcher, a smallish supermarket, a laundry and dry cleaning service, a hairdresser, a fresh produce shop, and other assorted tiny shops (like two belonging to cooperatives, one selling honey and everything made from it or beewax, another with excellent olive oil, wine, grappa and dried figs from a little Dalmatian island). Seven or eight minutes away is a shopping center with a large, well and consistently stocked and not too bussy supermarket (if lines reach tree people, additional checkout counters are open), ten or so shops (clothing, office supplies, appliances...), several cafes, a self-service restaurant popular at lunchtime with people woking in adjecent office blocks, a beautician, a bank... Only now I need public transportation or a car, to reach unpleasant but cheaper megastores like ones described. You are paying for car culture.