Wednesday, October 22, 2003

Oakland City Council Approves Ban on "Big-Box" Grocery Stores
TERENCE CHEA, Associated Press Writer

SAN FRANCISCO, Calif. (AP) -- Oakland has become the latest California community to ban Wal-Mart "Supercenters" that sell discount groceries alongside other bargain goods.

The Oakland City Council voted 7 to 1 Tuesday night to approve a measure to limit the size of "big-box" grocery stores allowed in the city. The ordinance bars discount retail stores with full-service supermarkets that exceed 100,000 square feet, or about 2.5 acres.

The measure targets Wal-Mart Supercenters -- gigantic shopping centers that average 187,000 square feet, about twice the size of the typical Wal-Mart store. Since introducing the concept in 1998, Wal-Mart Stores Inc. has opened 1,258 Supercenters in 43 states, but none in California.
Starting next year, Wal-Mart plans to open 40 Supercenters in California over the next four years, but the Bentonville, Ark.-based retailer is running into resistance from communities worried about their impact on traffic, open space, jobs and local business.

"Supercenters are going into communities and doing damage to local economies," said Council President Ignacio De La Fuente, who sponsored the Oakland measure with Councilmember Jane Brunner.

"They say they bring jobs and sales tax, but they put local stores out of business," De La Fuente said Tuesday night. "The reality is they drain the life out of our neighborhood commercial areas."
Opponents say Wal-Mart doesn't provides adequate health insurance coverage for its employees, straining local health care services. Labor leaders worry that nonunion Supercenters will pressure traditional supermarkets to lower wages or fire well-paid workers to stay competitive.

Wal-Mart spokeswoman Amy Hill insisted that Wal-Mart helps communities by offering lower grocery prices. She also said that the company offers all employees competitive wages and benefits.
While Wal-Mart found the ban disappointing, Hill said the decision "is not curbing our plans for the state."

"In some respects I think it's unfortunate that the city council or board of supervisors is trying to protect some special interest groups, to the detriment of consumers," Hill said.

Contra Costa County, with nearly one million people east of San Francisco, has passed a similar ban on Supercenters, but Wal-Mart hopes to overturn the measure with a referendum in March. Officials in California's largest city, Los Angeles, are discussing a measure that would block or discourage big-box grocery stores.

The Oakland ordinance does not affect smaller big-box grocery stores, such as Costco and Sam's Club, or large retail stores that don't sell groceries.

Council members said the measure is narrowly focused, and that the city isn't trying to turn away other big-box retailers. The council will vote again on Nov. 4 to confirm passage of the Oakland ordinance.

"It's the largest California city where an ordinance like this has passed," said Daniel Beagle, spokesman for the United Food and Commercial Workers Local 870, which represents grocery store employees in Alameda County. "It's sending a message to Wal-Mart that Oakland doesn't want that kind of predatory competition."