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Wal-Mart Faces Higher Hurdles in Long Beach

A City Council law would effectively bar the retailer from selling food and groceries at its stores, thereby blocking Supercenters.

September 21, 2006|Hector Becerra and Nancy Wride | Times Staff Writers

Raising the stakes in the campaign to keep Wal-Mart Supercenters out of the Los Angeles area, the Long Beach City Council this week approved a sweeping ordinance that would effectively ban the retail giant and other big-box retailers from selling food and groceries at their stores.

With the vote, the state's fifth-largest city joined Los Angeles as a large urban area that had made it harder if not impossible to open the kind of mega-stores that made Wal-Mart the country's largest seller of groceries.

Wal-Mart Stores Inc. is also facing a challenge in San Diego, where officials are considering an ordinance that would ban Supercenter-type stores, which combine a regular Wal-Mart with a discount grocery store.

"These ordinances seem to be proliferating," said Nelson Lichtenstein, a labor historian at UC Santa Barbara who wrote a book about Wal-Mart. "Wal-Mart's efforts in [California] ... are definitely being slowed down."

Wal-Mart had said in 2004 that it wanted to build 40 Supercenters in California, but it has faced stiff opposition from labor unions and some Democratic lawmakers. Critics argue that the giant stores would kill surrounding businesses and depress wages, especially for unionized workers at grocery stores that would be the Supercenters' main competition.

Many of the 20 Supercenters that have opened in the state are in outlying areas like the Inland Empire and north L.A. County, where the political sway of big labor is less than in big cities.

The retailer scored a coup over the weekend when a Supercenter opened in Rosemead, about 12 miles east of Los Angeles. On Tuesday, voters in the suburb rejected the recall of two Rosemead council members who had supported the plan. Wal-Mart spent an estimated $300,000 on the campaign.

Kevin McCall, a Wal-Mart spokesman, said the company questioned the legality of ordinances that amounted to bans. In San Diego, McCall said, the main proponents of the "big box" ordinance were the United Food and Commercial Workers union, and supermarkets like Vons and Ralphs.

"So you have our opponents and our competitors practicing the worst kind of protectionism," he said.

The Long Beach City Council voted 7 to 2 on Tuesday to ban sales of food and non-taxable merchandise by big-box retailers. Exempted were membership discount stores such as Sam's Club and Costco. Before becoming law, the ordinance must be read at the next council meeting Oct. 3. It then takes effect 31 days later. The city has two Wal-Marts, but neither are Supercenters.

Councilman Patrick O'Donnell, a schoolteacher in Paramount who made the motion to vote on the measure, said the ban was designed to articulate the city's wish for land use and planning of future development.

"This is about identifying what's best for your community, what fits best for your community.... And are big-box stores the best use of our land?" said O'Donnell, who garnered teacher union and Democratic Party support in his last two elections. "In my opinion they negatively impact mom-and-pop stores, the smaller retail establishments that are the back[bone] of your city."

Fellow council members Bonnie Lowenthal and Tonia Reyes Uranga, along with a then- council member, launched the city toward the ban in October 2005, with a memo that sought a city staff review of such a move.

Their memo said that grocery chains like Vons and Albertsons were among the 25 largest employers in Long Beach.

Long Beach Business Journal publisher George Economides called the vote a badly disguised political payback to labor and the Democratic Party for support in the June elections.

"If Wal-Mart was unionized," he said, "I don't think this issue would even have come up, and certainly not with so little warning."

The Long Beach action came two years after the L.A. City Council voted to require the company to study whether communities would be harmed by the centers. Though not a ban, the L.A. law requires retailers that seek to build stores larger than 100,000 square feet and with more than 10% of their sales floor devoted to food to pay for an economic analysis before obtaining building permits. Inglewood enacted a similar law in July.

McCall said the Rosemead recall vote, which occurred on the same day as the Long Beach council vote, showed that the retailer was making progress in the L.A. area.

hector.becerra@latimes.com

nancy.wride@latimes.com

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