Wal-Mart Still Raises Concern in Inglewood
Wal-Mart once again could get the brushoff -- this time without anyone ever mentioning the company’s name.
The City Council of Inglewood, where voters two years ago shot down a Wal-Mart-funded ballot measure to allow one of the retailer’s Supercenters, is expected to vote tonight on a proposal that could make it harder for Wal-Mart to resurrect the issue.
The initiative, sponsored by Councilman Ralph Franklin, directs the city’s planning division to study and offer guidelines for “super-retail centers.” Such giant combination mass-merchandise and grocery stores are key to Wal-Mart’s hopes for expansion in California and other coastal, mostly urban states beyond its core markets in the South and the Midwest.
Wal-Mart originally pledged to build 40 Supercenters across California by the end of 2006. But the company has faced numerous battles -- like the one in Inglewood -- with city councils, community groups and labor activists who are determined to thwart the company’s expansion.
“They’re running out of space everywhere else, and the urban areas are where the people are,” said analyst Mark Husson of HSBC Securities in New York. “If they can finally get to open up in Inglewood, after the black eye they got there, it will be a significant victory for them, one that they can use potentially as a key to try to unlock other neighborhoods.”
First, the company will have to get past Franklin, who said he would ask that planners take 60 days and consider sending to the full council a proposal similar to Los Angeles’ so-called big-box ordinance. That measure requires would-be builders to pay for studies showing how their businesses would affect the surrounding community.
Although the Inglewood measure doesn’t identify Wal-Mart, the Bentonville, Ark., retailer would nonetheless be among the first to feel its effects. Few other companies plan -- or are already in a position to build -- the kind of store regulated by the L.A. ordinance.
Wal-Mart, a few months after being trounced by voters in its bid to build a store without normal city oversight, quietly bought the 60-acre parcel of land between the Forum and Hollywood Park that was at issue in the 2004 vote. The plot had been owned by a developer.
Franklin said the measure was not directed at any one retailer. But he added that he worried about the effect that one of the company’s Supercenters or Sam Club’s warehouse stores might have on Inglewood after watching small businesses close when a Wal-Mart Supercenter opened in his small Kansas hometown.
“I don’t want that same impact to happen to our city while it’s on the rise,” Franklin said. “A Wal-Mart, or Sam’s Club, is a major concern for me.”
The Los Angeles measure that Franklin hopes to emulate governs proposed stores larger than 100,000 square feet that devote more than 10% of their space to groceries.
Los Angeles City Council members who backed the measure said it would effectively block Wal-Mart, since they believed the retailer would have trouble showing that its largest stores would have a positive effect on jobs, wages and other businesses.
“If they go the direction of Los Angeles, I think we would certainly be more opposed to the efforts,” Wal-Mart spokeswoman Amy Hill said. “We feel that that would severely limit consumers’ ability to choose where they want to spend their money.”
Wal-Mart has no plans for the parcel but is evaluating its options, Hill said.
Regulations such as the one in Los Angeles also limit Wal-Mart’s ability to show Wall Street that it can expand and grow outside of familiar rural areas -- an increasingly important demonstration for a company that already has more than 3,800 stores in the U.S., Husson said.
The company operates 10 Supercenters across California, with 10 more set to open by the middle of the year. Hill said the company still expected to have “pretty close” to 40 stores in California by the end of the year. Wal-Mart also has 150 regular discount stores in California, along with 34 Sam’s Clubs and nine distribution centers, employing nearly 74,000 people.
Before the 2004 vote, the company said its Inglewood development plans were for a regular Wal-Mart store but didn’t rule out eventually expanding it to include a full-size grocery. That set the company up for a battle with community and labor activists who contended that a Supercenters would drive out union grocers that offer workers higher pay and better benefits.
