Wal-Mart Supercenters Face Resistance
By MICHAEL LIEDTKE
MARTINEZ, Calif. (AP) - Wal-Mart is poised to introduce California to its
version of paradise - ``Supercenters'' stuffed with discount groceries
alongside the usual potpourri of bargains.
But the nation's largest company is meeting resistance in a state where
rising concerns about reducing traffic and preserving open space clash
with Wal-Mart's desire to build gargantuan shopping centers nearly twice
the size of its typical store.
Contra Costa County, a fast-growing San Francisco suburb of nearly 1
million people, already has banned the Supercenter concept - a precedent
Wal-Mart is seeking to overturn at the ballot box.
In Los Angeles, California's largest city, officials are discussing an
ordinance that would block or discourage Wal-Mart from opening
Supercenters there.
The opposition hasn't blanketed the entire state. Wal-Mart's first
Supercenter in California is expected to open next year in the booming
southern desert city of La Quinta, followed by others in the Central Valley -
Bakersfield, Hanford, Chico and Redding.
Still, the pockets of resistance underscore the challenges facing Wal-Mart
as it pursues plans to open 40 California Supercenters during the next
four years. Bentonville, Ark.-based Wal-Mart Stores Inc. already operates
134 of its traditional stores in California, including three in Contra Costa.
California represents the last frontier for Wal-Mart's Supercenters - stores
that contain full-service grocery departments. To accommodate all the
food, the Supercenters span an average of 187,000 square feet compared
to an average of 97,000 square feet for the typical Wal-Mart discount store.
Since Wal-Mart first introduced Supercenters in 1998, the concept has
turned into its crown jewel. The company runs 1,258 Supercenters in 43
states, up from 441 Supercenters in 28 states five years ago.
Supercenters ``have been extremely successful for them,'' said Kurt
Barnard, an Upper Montclair, N.J. retail analyst who has been following
Wal-Mart for 40 years. ``I would expect Wal-Mart to make sure (the
Supercenters) get built in California and then make them indispensable
for millions of consumers. They are a very determined company.''
While Wal-Mart hails the Supercenters as the ultimate in shopping
convenience, opponents attack them as monstrosities that attract too
much traffic, create too many low-wage jobs and destroy neighboring
businesses.
The criticism has dogged Wal-Mart for years, and stirred community
opposition in several other states, including Oregon, Arizona and Nevada.
But the critics may find an even more receptive audience in California,
where congested roads and sprawling developments have emerged as a
major irritant.
``We don't want our communities to become one giant freeway tied
together by strip malls,'' said Amaha Kassa, co-executive director of the
East Bay Alliance for a Sustainable Economy, an Oakland community
group opposed to Wal-Mart's expansion.
The Supercenters also face fierce opposition from a longtime Wal-Mart
foe - the United Food and Commercial Workers, which has more than
200,000 members in California. The UFCW and other labor leaders fear
nonunion Supercenters will pressure traditional supermarkets to lower
wages or fire well-paid workers to remain competitive.
Wal-Mart regards much of the criticism about its Supercenters as
``ludicrous,'' said spokeswoman Amy Hill.
But Wal-Mart is taking Contra Costa's snub seriously, even though the
company has no plans to open a Supercenter in the unincorporated areas
affected by the ban.
``This is a direct threat to our business. It's a matter of principle for us,''
Hill said.
The company spent about $100,000 collecting 40,735 voter signatures to
qualify for a referendum seeking to overturn the Contra Costa ban. Just
under 26,500 of those signatures need to be validated by the county clerk
to force a special election on the issue.
Wal-Mart is prepared to spend even more in the campaign leading up to
Contra Costa's still-unscheduled election, Hill said. The company's
pockets are deep, having generated an $8 billion profit last year on sales
of $245 billion.
Supercenters are important to Wal-Mart because shoppers typically visit
supermarkets more frequently than general merchandise stores.
By luring customers to its store more often to buy groceries, Wal-Mart gets
more opportunities to sell other products that generate higher profit
margins.
But more frequent trips to the stores mean more traffic problems for the
Supercenter's neighbors, said Contra Costa Supervisor John Gioia.
Because most groceries aren't taxed, Gioia believes the Supercenter
won't generate enough revenue to pay for the additional burdens on the
county roads.
With that in mind, Gioia wrote the Contra Costa ban against stores that
cover more than 90,000 square feet and devote more than 5 percent of the
space to nontaxable items, such as groceries. All of Wal-Mart's cover at
least 90,000 square feet, with the largest spanning 261,000 square-feet.
The Contra Costa ban exempts big membership warehouses, such as
Costco and Wal-Mart's own Sam's Club, that sell groceries. Gioia believes
that exemption makes sense because shoppers at the membership
warehouse buy in bulk so they don't have to make as many trips.
Wal-Mart views the Contra Costa ban as government interference in
consumers' freedom of choice. It's an argument that resonates with
Marlise Evans, a regular shopper at a traditional Wal-Mart store in
Martinez, Contra Costa's county seat.
``It would be nice to have it all right here in one place,'' Evans said while
buying her son an ice cream bar from a vending machine outside the
Wal-Mart. ``It would be cheaper, and it would be more convenient.''
Consumers in general seem to like the idea of getting their groceries from
Wal-Mart.
The sale of grocery, candy and tobacco items accounted for about $37.7
billion, or 24 percent, of the sales made in Wal-Mart's Supercenters and
discount stores last year, up from $11.7 billion, or 14 percent, of the same
segment's sales in fiscal 1998.
Wal-Mart's ballot-box defense of its Supercenters has proven effective in
other communities.
The company spent $140,000 last year to defeat a measure that would
have banned a Supercenter in Calexico, a California border town of
27,000 people. The Southern California city of Inglewood and Nevada's
Clark County repealed Supercenter bans after Wal-Mart qualified voter
referendums to take the issue to the ballot.
But Contra Costa has no plans to back off, Gioia said.
``It's a quality of life issue,'' Gioia said. ``All we are doing is putting
legitimate and reasonable limitations on the kinds of stores that we want
in our community.''
By MICHAEL LIEDTKE
MARTINEZ, Calif. (AP) - Wal-Mart is poised to introduce California to its
version of paradise - ``Supercenters'' stuffed with discount groceries
alongside the usual potpourri of bargains.
But the nation's largest company is meeting resistance in a state where
rising concerns about reducing traffic and preserving open space clash
with Wal-Mart's desire to build gargantuan shopping centers nearly twice
the size of its typical store.
Contra Costa County, a fast-growing San Francisco suburb of nearly 1
million people, already has banned the Supercenter concept - a precedent
Wal-Mart is seeking to overturn at the ballot box.
In Los Angeles, California's largest city, officials are discussing an
ordinance that would block or discourage Wal-Mart from opening
Supercenters there.
The opposition hasn't blanketed the entire state. Wal-Mart's first
Supercenter in California is expected to open next year in the booming
southern desert city of La Quinta, followed by others in the Central Valley -
Bakersfield, Hanford, Chico and Redding.
Still, the pockets of resistance underscore the challenges facing Wal-Mart
as it pursues plans to open 40 California Supercenters during the next
four years. Bentonville, Ark.-based Wal-Mart Stores Inc. already operates
134 of its traditional stores in California, including three in Contra Costa.
California represents the last frontier for Wal-Mart's Supercenters - stores
that contain full-service grocery departments. To accommodate all the
food, the Supercenters span an average of 187,000 square feet compared
to an average of 97,000 square feet for the typical Wal-Mart discount store.
Since Wal-Mart first introduced Supercenters in 1998, the concept has
turned into its crown jewel. The company runs 1,258 Supercenters in 43
states, up from 441 Supercenters in 28 states five years ago.
Supercenters ``have been extremely successful for them,'' said Kurt
Barnard, an Upper Montclair, N.J. retail analyst who has been following
Wal-Mart for 40 years. ``I would expect Wal-Mart to make sure (the
Supercenters) get built in California and then make them indispensable
for millions of consumers. They are a very determined company.''
While Wal-Mart hails the Supercenters as the ultimate in shopping
convenience, opponents attack them as monstrosities that attract too
much traffic, create too many low-wage jobs and destroy neighboring
businesses.
The criticism has dogged Wal-Mart for years, and stirred community
opposition in several other states, including Oregon, Arizona and Nevada.
But the critics may find an even more receptive audience in California,
where congested roads and sprawling developments have emerged as a
major irritant.
``We don't want our communities to become one giant freeway tied
together by strip malls,'' said Amaha Kassa, co-executive director of the
East Bay Alliance for a Sustainable Economy, an Oakland community
group opposed to Wal-Mart's expansion.
The Supercenters also face fierce opposition from a longtime Wal-Mart
foe - the United Food and Commercial Workers, which has more than
200,000 members in California. The UFCW and other labor leaders fear
nonunion Supercenters will pressure traditional supermarkets to lower
wages or fire well-paid workers to remain competitive.
Wal-Mart regards much of the criticism about its Supercenters as
``ludicrous,'' said spokeswoman Amy Hill.
But Wal-Mart is taking Contra Costa's snub seriously, even though the
company has no plans to open a Supercenter in the unincorporated areas
affected by the ban.
``This is a direct threat to our business. It's a matter of principle for us,''
Hill said.
The company spent about $100,000 collecting 40,735 voter signatures to
qualify for a referendum seeking to overturn the Contra Costa ban. Just
under 26,500 of those signatures need to be validated by the county clerk
to force a special election on the issue.
Wal-Mart is prepared to spend even more in the campaign leading up to
Contra Costa's still-unscheduled election, Hill said. The company's
pockets are deep, having generated an $8 billion profit last year on sales
of $245 billion.
Supercenters are important to Wal-Mart because shoppers typically visit
supermarkets more frequently than general merchandise stores.
By luring customers to its store more often to buy groceries, Wal-Mart gets
more opportunities to sell other products that generate higher profit
margins.
But more frequent trips to the stores mean more traffic problems for the
Supercenter's neighbors, said Contra Costa Supervisor John Gioia.
Because most groceries aren't taxed, Gioia believes the Supercenter
won't generate enough revenue to pay for the additional burdens on the
county roads.
With that in mind, Gioia wrote the Contra Costa ban against stores that
cover more than 90,000 square feet and devote more than 5 percent of the
space to nontaxable items, such as groceries. All of Wal-Mart's cover at
least 90,000 square feet, with the largest spanning 261,000 square-feet.
The Contra Costa ban exempts big membership warehouses, such as
Costco and Wal-Mart's own Sam's Club, that sell groceries. Gioia believes
that exemption makes sense because shoppers at the membership
warehouse buy in bulk so they don't have to make as many trips.
Wal-Mart views the Contra Costa ban as government interference in
consumers' freedom of choice. It's an argument that resonates with
Marlise Evans, a regular shopper at a traditional Wal-Mart store in
Martinez, Contra Costa's county seat.
``It would be nice to have it all right here in one place,'' Evans said while
buying her son an ice cream bar from a vending machine outside the
Wal-Mart. ``It would be cheaper, and it would be more convenient.''
Consumers in general seem to like the idea of getting their groceries from
Wal-Mart.
The sale of grocery, candy and tobacco items accounted for about $37.7
billion, or 24 percent, of the sales made in Wal-Mart's Supercenters and
discount stores last year, up from $11.7 billion, or 14 percent, of the same
segment's sales in fiscal 1998.
Wal-Mart's ballot-box defense of its Supercenters has proven effective in
other communities.
The company spent $140,000 last year to defeat a measure that would
have banned a Supercenter in Calexico, a California border town of
27,000 people. The Southern California city of Inglewood and Nevada's
Clark County repealed Supercenter bans after Wal-Mart qualified voter
referendums to take the issue to the ballot.
But Contra Costa has no plans to back off, Gioia said.
``It's a quality of life issue,'' Gioia said. ``All we are doing is putting
legitimate and reasonable limitations on the kinds of stores that we want
in our community.''
