Closing Those Golden Gates

Residents of Inglewood, Calif., voted to reject an initiative by Wal-Mart Stores Inc. (Bentonville, Ark.) that would have exempted the company from zoning and environmental restrictions in the Los Angeles suburb.

More than 60 percent of the 11,649 ballots cast rejected Wal-Mart’s proposal to build a store the size of 17 football fields without the traffic reviews, environmental studies or public hearings commonly required.

The vote came several months after the Inglewood City Council rejected Wal-Mart’s proposal.

About two years ago, Wal-Mart announced plans to open at least 40 of its supercenter formats in California. But the process has been stymied by pockets of opponents in cities and counties around the state arguing that the huge centers will cause traffic congestion, hurt smaller independent businesses and drive out better-paying jobs. The retailer introduced the supercenter concept in 1988 and since then has built close to 1500 of these stores (averaging 190,000 square feet) around the country, but only one in California.

“Wal-Mart is not unionized so there is already a constituency against them in California,” said Ulysses Yannas, a retail analyst with Buckman, Buckman & Reid (Red Bank, N.J.). “But from another standpoint, a lot of businesses do sprout around a Wal-Mart, such as restaurants and dollar stores that want to take advantage of the traffic a Wal-Mart generates. I think Wal-Mart does have another weapon in its quiver. It can always penetrate cities not with its supercenter stores but with its smaller neighborhood store formats.

“What the Inglewood decision could have some effect on, though, is Wal-Mart’s attempts to get closer to metropolitan cities,” Yannas said, “especially if we see other cities around the country putting up similar opposition to having Wal-Mart in their neighborhood.”