LOS ANGELES -- California might have its quirks -- like porn stars running for governor -- but the state has never been known as anti-business.
However, as Wal-Mart Stores 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.
Quite a few 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 poor wages 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, near San Francisco, passed an ordinance to keep a Supercenter out under a law that prevents a full-line grocery store from operating in unincorporated 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 The city repealed the ordinance based on 9,000 signatures Wal-Mart collected last year and here, too, voters will decide the outcome at the polls.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 collecting signatures to put the decision before voters.
Wal-Mart officials have denounced the ordinances as "anti-competitive and anti-consumer," and said they 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 the counties of Contra Costa and Inglewood, 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 rolled up for the world's largest retailer. Since 1988, when the first Supercenter hit the market in Washington, Mo., about 200 communities in the United States 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 non-unionized 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 vs. 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.
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."
