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Archive for Friday, July 25, 2003

Wal-Mart Supercenters draw consternation in California

July 25, 2003

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— Wal-Mart is poised to introduce California to its new "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.

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, 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, 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.

California represents the last frontier for Wal-Mart's Supercenters, which span nearly twice the square footage of a typical Wal-Mart 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.

Wal-Mart operates a traditional store in Lawrence, Kan., but the retailer has run into opposition for its plans to open a Supercenter near Sixth Street and Wakarusa Drive.

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."

Opponents attack the stores 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 major irritants.

"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.

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 the collected 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.

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.

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