Wal-Mart Blocked by Union Lobbying

Organized labor won a key battle this week in an all-out effort to limit Wal-Mart’s expansion in California, successfully lobbying the Inglewood City Council to block the nonunion retail giant from building a super center in that city.

The union representing local supermarket clerks, which recently hiked dues to create a $3-million war chest to fight Wal-Mart’s expansion in Southern California, is now pushing a similar effort in the city of Los Angeles.

“The battle is on,” said Rick Icaza, president of Local 770 of the Union of Food and Commercial Workers, which represents 20,000 local supermarket workers. “We’re not going to give up what it’s taken us 40 years to achieve.”

Wal-Mart Stores Inc. recently announced plans to build at least 40 super centers in California over the next four to six years, bringing the company’s giant discount-plus-grocery stores to the state for the first time. The food workers union says those stores directly compete with union supermarkets and could erode the high wages and benefits paid to its members.

Wal-Mart officials said they have not yet determined how they will respond to the ordinance passed on a 4-1 vote by the Inglewood council Tuesday. The measure does not specifically name Wal-Mart but bars construction of retail stores that exceed 155,000 square feet and that sell more than 20,000 nontaxable items, such as food and pharmacy products -- criteria that apply to few if any retailers other than Wal-Mart.

“We’re not accepting that this ordinance is permanent yet,” said Robert S. McAdam, Wal-Mart’s vice president for state and local government relations. “It may mean that we’ll launch a referendum or that we will seek its repeal.”

Council members who voted for the ordinance could not be reached for comment. Inglewood Councilwoman Judy Dunlap said she opposed the measure on procedural grounds.

The Inglewood ordinance is the first of its kind in Los Angeles County, Icaza said, but Wal-Mart has fought similar battles elsewhere. The Martinez, Calif., City Council passed a like measure last month.

In Inglewood, Wal-Mart opened discussions for a store in a new development near the Forum.

“We tried to tailor it [the ordinance],” Icaza said, “so that it wouldn’t impact someone like Costco,” which operates a union store in Inglewood. “We’re really aiming at the super centers. A Wal-Mart comes in and uses the grocery items as loss leaders to get the people to come in.”

Costco Wholesale Corp. President and Chief Executive James Sinegal, however, said his company opposes the measure on principle, saying government should not restrict the retailing options open to consumers.

Unions have long argued that Wal-Mart stores depress local economies because many workers are part-time and are paid slightly above minimum wage. About two-thirds of Wal-Mart employees do not receive health benefits, taxing local health services, Icaza said.

In its ordinance, Inglewood cites the larger stores’ greater burdens on city services and negative effect on the “community’s character and aesthetics” as the reasons for the measure.

But McAdam said those claims are a cover for a pro-union agenda.

“We’ve heard all of these various arguments a million times,” McAdam said. “There is no evidence that crime or any other issue is somehow more attendant to a large-scale business than a series of small-scale businesses.”

Wal-Mart has fought referendum campaigns across the country to beat back what it sees as union-sponsored laws restricting consumers’ options.

In March, Wal-Mart sponsored and won a referendum in Calexico, Calif., overturning a measure aimed at preventing retailers from opening a Wal-Mart-size discount and grocery store. And in Las Vegas, after Wal-Mart battled the city’s 1999 anti-super-center law, the city repealed the measure and passed a far less restrictive one.

“As a general principle, we don’t like to be told what kind of merchandise we can offer our customers,” McAdam said. “We would probably look at serving those same customers in a different location outside of that community.”

Three years ago, the supermarket clerks union pushed aggressively for a state law that would have prohibited stores 150,000 square feet or larger from devoting 10% or more of their space to groceries. Although the measure eventually passed the state Legislature, it was vetoed by Gov. Gray Davis.