One of the more specific goals to emerge from Decatur’s 2010 Strategic Roundtable sessions was “Encourage a diversity of business types with particular focus on small businesses and businesses that provide daily needs.”

Decatur is well-known around the metro for strong support of small businesses, partly out of desire, but also – let’s be honest – partly out of necessity.  Small businesses, such as restaurants, gift shops and clothing stores can add significant mark-ups on items sold – read: “alcohol” for pubs and restaurants – and  survive on fewer total purchases and square-footage.

For many commodity goods – such as food, toilet paper, etc – mark-ups are so small in the modern economy that these items are generally regulated to the outskirts of town centers, where rents are cheaper and people shop mightily with a car and a “buggie”.  (Sorry, as a native-Northerner, I’m compelled to put that word in quotes.)

But now, some of those big-box players are beginning the move into urban areas.  In what is widely seen as a test-model, Walmart is opening a 3,500 (or 10,000 – reports conflict) square foot store – the SMALLEST IN THE WORLD – on the campus of the University of Arkansas this month.

But how can Walmart, a name synonymous with low-prices – if not necessarily low profit margins, but that’s another story – and big box stores, make that jump into urban areas?  How did they overcome the profit-margin hurdle?

One number, one word: $4 drugs.

According to AdAge, Walmart makes urban stores profitable with its pharmacies and the recent surging popularity of its $4 prescription program.  So from a business standpoint, urban Walmart’s are looking to take market-share from downtown pharmacies, under-cutting them on prescription prices and offering customers a greater and cheaper selection of your “daily needs”.

It looks like the urban store war has just begun.  Walmart’s small store on the UA campus is just the beginning.  AdAge reports that Walmart has big – I mean small – plans to open 30-40 small and medium size stores in the next year, with a particular focus on New York City.

So it’s possible that more “basic needs” will be returning to our downtowns in the coming years, subsidized largely by your prescription drug plans. It’s not the utopian model that many new urban dwellers desire (see Decatur’s partial goal for “more small businesses” above), but it seems to have the greatest promise to bring more commodities back downtown in the current day and age.

If that makes you more than a little conflicted, you’re certainly not the only one.