LOS ANGELES — California might have its quirks — like porn stars running for governor — but the state has never been known as antibusiness.

However, as Wal-Mart Stores Inc. gears up to put 40 Supercenters in the state within the next three to five years, the retailer has met stumbling blocks.Besides the 130 traditional stores it operates in the state, the first Supercenters — units with full-line discount stores and supermarkets under one roof, ranging from 109,000 to 230,000 square feet, or roughly twice the size of its typical stores — are slated to bow in La Quinta in the spring, followed by yet-to-be-scheduled openings in Bakersfield, Hanford, Chico and Redding.

A number of consumer advocacy groups and municipal governments where Supercenters are bound are fighting to keep the Bentonville, Ark., giant out, citing loss of open spaces, traffic congestion, environmental issues and poorwages for suburban workers.

Here are some recent battles:

  • A handful of Palm Desert residents filed a lawsuit in April against the city, intending to stall the construction of a Supercenter scheduled to open there next summer. Plaintiffs claim they would be “irreparably harmed by the approval of the project and its potentially detrimental environmental consequences,” according to court documents.

  • Contra Costa County, a suburb of San Francisco, passed an ordinance to keep a Supercenter out under a law that prevents a full-line grocery store from operating in non-incorporated portions of the county. Wal-Mart officials claim the retailer qualifies for a referendum in the county based on 40,000 signatures it collected, and there are plans to take the matter to voters in an as-yet-unscheduled special election.

  • In Inglewood, near Los Angeles, the city council adopted an ordinance that limits the interior square footage of a superstore that can be devoted to groceries, or, in other words, a Supercenter. The city repealed the ordinance based on 9,000 signatures Wal-Mart collected last year and here, too, voters will decide the outcome at the polls.

  • In San Marcos, near San Diego, the city council approved rezoning for a 139,000-square-foot Supercenter, but opponents are gathering signatures to put the decision before voters.

Wal-Mart officials have denounced the ordinances as “anticompetitive and anti-consumer” and plan a vigorous fight. Supercenters have been extremely successful for the retailer because shoppers generally visit supermarkets more often than discount stores. Moreover, the stores are open 24 hours a day. The company now operates 1,258 Supercenters in 43 states, up from 441 in 28 states five years ago.With more than $8 billion in profits on sales of $245 billion last year, analysts deem Wal-Mart a formidable opponent with deep pockets. In Contra Costa and Inglewood counties, Wal-Mart has spent as much as $200,000 to collect enough signatures to reverse the decisions.

“Time and time again, our customers have told elected officials they don’t approve of restrictions on Wal-Mart or any other retailer for that matter,” said a Wal-Mart spokesman.

It’s not the first time the welcome mat has been left in the closet for the world’s largest company. Since 1988, when the first Supercenter hit the market in Washington, Mo., about 200 communities in the U.S. have fought their construction, citing similar problems.

“Wal-Mart is like the tornado bearing down on a trailer park. It scares the hell out of everybody,” said Jack Kyser, chief economist of the Los Angeles Economic Development Corp. noting the nonunionized retailer is creating headaches for unionized supermarket chains.

Rick Icaza, president of the United Food and Commercial Workers Union, said the issue is not as simple as “union versus nonunion.” He believes Wal-Mart would create wage wars by forcing other businesses to cut labor costs to compete. He’s supporting an ordinance currently being drafted by the City Attorney’s Office in Los Angeles County to prevent Supercenters from opening there. He cited a study done by the San Diego County Taxpayers Association predicting that an influx of big-box stores in the area would result in an annual decline in wages and benefits of between $105 million and $221 million and an increase of $9 million in public health costs.

There is only one Kmart supercenter in California — in Carson, near Los Angeles — and there are no Target super centers. One source suggested that Wal-Mart is in the hot seat because of its size and its grocery store component, as well as the large number of giant combo stores it plans for the state.

Wal-Mart has not announced plans for a Supercenter in Los Angeles, but the spokesman said the company would “continue to look throughout the state for opportunities to best serve our customers.”

Icaza believes Los Angeles would be among the more attractive markets to Wal-Mart. “It looks like we’re going to have a major confrontation,” he said.Kyser pointed out that even if Supercenters are not allowed in Los Angeles County, there are nearby cities like Glendale and Burbank that could welcome the retailer. “Wal-Mart could surround Los Angeles and, with its low prices, could suck sales out of the city,” he said.

Palm Desert City Councilman Jim Ferguson, who voted against a Supercenter in his district, fears increased traffic to the store would affect air quality in the Southern California city.

“I’m all for free enterprise and I have nothing against size per se,” he said, noting the city approved the Supercenter this year. “But I believe smaller communities are chasing sales tax dollars and sacrificing land-use policy decisions.”

Indeed, Wal-Mart’s power with county governments is among the chief concerns of opponents. In many cases, small cities subsidize stores to bump up sales tax revenues and create jobs.

“In some places, it’s the biggest source of revenue,” noted Amaha Kassa, co-director of the East Bay Alliance for a Sustainable Economy in Oakland. “But at what cost? Small businesses get driven out and these are the residents who really put money back into the community. They’re not sending profits back to Arkansas.”

Greg Pettis, mayor pro tem of Cathedral City, said his community is now smarting from a lack of small businesses that a traditional-sized Wal-Mart drove out some 10 years ago. That unit is now slated to close when the nearby Palm Desert Supercenter opens, taking with it 150 jobs. “Wal-Mart has a horrible history of working with the communities and moving on to what they perceive will be a better profit margin,” said Pettis. “They said [the Cathedral City unit] doesn’t fit their corporate model, but it did 10 years ago when we gave them the [approval for the] land.”

Cities investing in retail for the purpose of economic improvement does not make sense, according to Greg LeRoy, executive director of Washington-based labor advocacy group Good Jobs First. “In my opinion, there’s a very small number of cases where a Supercenter would make sense,” he said. “[For example,] in a depressed inner city that’s demonstrably underserved. Except for places that are growing very quickly, retail is already saturating markets. Retail does not pay its employees enough to create new wealth. And that doesn’t create a ripple effect.”Wal-Mart’s spokesman shrugs off these concerns, noting adversaries have agendas that are not always in the best interest of communities. “Quite simply, it’s organized labor that’s trying to limit competition and restrict consumer choice,” he said.

load comments
blog comments powered by Disqus