San Diego Says No To Wal-Mart

City Council Approves Ban On Giant Retail Stores Selling Groceries; Mayor Vows Veto

(AP)  The City Council here voted late Tuesday to ban certain giant retail stores, dealing a blow to Wal-Mart Stores Inc.'s potential to expand in the nation's eighth-largest city.

The measure, approved on a 5-3 vote, prohibits stores of more than 90,000 square feet that use 10 percent of space to sell groceries and other merchandise that is not subject to sales tax. It takes aim at Wal-Mart Supercenter stores, which average 185,000 square feet and sell groceries.

Mayor Jerry Sanders will veto the ban if the Council reaffirms it on a second vote, which will likely happen in January, said mayoral spokesman Fred Sainz. The Council can override his veto with five votes.

"What the Council did tonight was social engineering, not good public policy," Sainz said.

Supporters of the ban argued that Wal-Mart puts smaller competitors out of business, pays workers poorly, and contributes to traffic congestion and pollution. Opponents said the mega-retailer provides jobs and low prices and that a ban would limit consumer choice.

"Quite simply, I do not think it is the role of the San Diego City Council to dictate where families should buy their groceries," said Councilman Kevin Faulconer, who opposed the ban.

Councilman Tony Young, who joined the 5-3 majority, countered, "I have a vision for San Diego and that vision is about walkable, livable communities, not big, mega-structures that inhibit people's lives."

Wal-Mart spokesman Kevin McCall said the Bentonville, Ark.-based company may consider a legal challenge or voter referendum if the measure becomes law.

"Certainly we're disappointed but there's still a number of steps left in this process," he said. "We need to look at what our options are."

The ban is modeled on a law in Turlock, a city of 70,000 people 85 miles southeast of San Francisco. Turlock prohibited big-box stores over 100,000 square feet that devote at least 5 percent of their space to groceries.

Wal-Mart recently dropped its challenge to the Turlock ordinance, which prevented it from building a planned 225,000-square-foot Supercenter store. In July, a federal judge in Fresno said Turlock's zoning law did not infringe on the company's constitutional rights. The state Supreme Court refused to hear the case.

Wal-Mart has about 2,000 Supercenter stores, including 21 in California, but none in the San Diego area. The retailer has 18 regular Wal-Mart stores in the San Diego area, including four within limits of the city of 1.3 million people.

Wal-Mart has not disclosed plans for a Supercenter store in San Diego area. Sainz, the mayoral spokesman, said the retailer probably wants to expand.

"It's complete and total guesswork but I'm inclined to think they would," Sainz said. "Everything I've seen and heard from them makes me think they would."

San Diego's move comes two months after the Chicago City Council failed to override Mayor Richard Daley's veto of a so-called "living-wage" ordinance that would have required giant retailers to pay their workers higher wages.

[grumpas]

Wal Mart has been destroying business in this country for years! It's just people aren't smart enough to realize they are paying through the nose to have a Wal Mart in the area! These people are in the business to make money anyway they can! It's usually on the backs of their employee's! In the area I live in we have two Wal Mart stores! The tax breaks the city gave these robber baron's was obscene! Guess who is paying Wal Mart's taxes, I am being forced to which I resent! In most places, the wages are not competive! If you have benefit's most of your paycheck goes to buy them! Most of the merchandise in the store is junk I wouldn't bother dragging home! Their business practices leave a lot to be desired! I refuse to shop there under any circumstances! I will drive across town to a Target store first!

[bhussbhuss]

Wal-Mart is a leech on society. At a time when America's middle class is clearly shrinking, they keep most of their workers on part time, and do everything they can to discourage longtime employment in order to minimize paying health benefits. Yes they have health insurance for their employees, but can their employees afford it? No. Most get medical/medicade etc. from their state. Who pays for that? We do, John Q Taxpayer. This information was publicized last year when Wal-Mart was taken to task by consumer groups.
Why can't Wal-Mart show social responsibility and respect toward their employees by paying decent wages and providing an affordable health plan? It's just greed. They are making money hand over fist from the poorest members of America's society who must need shop where goods are the cheapest to survive.
Shame on you Wal-Mart. Maybe if you shape up your employee policy America's finest city will welcome your superstores.

[glidescube]

And where is the voter's voice? I say such thing should be left up to the voters and in particular those residents that would be affected by large store moving into thier community.

Let the People chosse!!!

While I am not siding with Wal-Mart, suppose I start a business in my county and it takes off, I then go statewide, later on I decide to take it nation wide, is that wrong? It is all about who we are, what this nation is about, the bottom line in is, people are hearing so much about WalMart and it products from other nations, not because they offer lower prices. I personally like the smaller stores that will offer me deals and research a product I am looking for

[wny14127]

In my neck of the world, WM's wages are competitive with other retailers. The problem seems to be twofold; the small, often poorly run shops that have subsisted for years with little or no competition and the unions who are fearing a loss of union members(read dues paid to the union leaders).

It's not the job of any government to tell us where we can and can't shop. It's not the job of gov't to protect the small shop who can't run itself. The history of retailing is replete with stories of various sized companies who reinvented themselves to compete with Wal-Mart, none of them did it on price. Look at Target. It can be done.

As to the unions, they fear that the local union-shop retailer might have to compete with WM, or that the union members will decide to work at WM and save the outrageous union due expense per month.
I have seen the union benefits, minimal at best and very expensive.

[optimas2]

FallngEmpire,

Federal antitrust lawsuit? If you mean a WINNING lawsuit, you're probably going to be waiting quite a long time, given the Government's stance on Section 2 violations that was set out in its amici brief in Verizon Communications v. Trinko. (available online: http://www.usdoj.gov/atr/cases/f200500/200558.htm)

The Supreme Court's decision in the same case does not bode well for the chances of a successful Section 2 lawsuit, either.

Tell me, compare Aspen Skiing to Trinko and tell me: do you think the scope of Section 2 is expanding or shrinking? For that matter, after Dagher last term, is the scope of the entire Sherman Act expanding or shrinking?

[optimas2]

Imaok1,

Sadly, I believe you're not being sarcastic with your post. If a corporation can "dominate the market," why is that a bad thing? Doesn't that mean that consumers WANT to buy that corporation's product? If San Diego shoppers flock to Wal-Mart SuperCenters in droves, why should the government tell them they can't shop there?

Moreover, communities--without government intervention--DO have the right choose whether they want their marketplaces reduced to one major store: it's called the free market! If they want stores other than Wal-Mart to exist, they'll shop there--otherwise, they won't. It's really an efficient way to decide which stores the community wants and doesn't want.

Sometimes, I'm really blown away at the antiWal-Mart people who act as if people are forced at gunpoint to shop at Wal-Mart when it comes into a neighborhood. You even say as much: "it's actually telling people where to shop."

Yep. It's at this point I'm reminded of an observation by H.L. Mencken: "No one ever went broke underestimating the intelligence of the American people."

[imaok1]

You are right on, Fallingempire. In cases like these, the government needs to step in to protect the competitive marketplace from a major corporation who can and will easily dominate and destroy the market. Allowing the mega-stores to be built is actually telling people where they can and cannot shop- soon there will be no other options. Communities should have the right to choose whether they want their marketplaces reduced to one major store- if they say NO, so be it - you're out Wal-Mart!

[olgreyghost]

When the government steps in is when you have "constriction of competition." Now the smaller retailers in San Diego are protected from having to compete with Wal-Mart and other similar companies who can sell for less so they, the small businesses, can continue to sell at higher prices and employ people at slave wages with no fringe benefits (check with the employees of your favorite "Mom n' Pop" and see how well they are paid).

[fallngempire]

When you have a runaway monopoly like Walmart the government must step in to prevent constriction of competition. Who do you think is seriously going to compete with Walmart? NOBODY CAN. Walmart can afford to price any competitor out of business, and they will, even if it means taking losses temporarily.

Walmart is fast approaching a federal anti-trust lawsuit, mark my words.

[perception5]

It should be vetoed.......... and any legislation anywhere in the country that restricts competition should be vetoed........
signed, The American Consumer..........