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The San Francisco Business Times reports that legislation has been proposed by two members of the Board of Supervisors that, if enacted, would restrict or ban supercenter development.

The bill bans all retail development larger than 120,000 sq. ft. and requires a special conditional use permit for all retail developments larger than 90,000 sq. ft. that stock more than 20,000 SKUs and devoted five percent or more of their space to non-taxable items such as grocery.

One of the supervisors said that the legislation was inspired by a concern that Wal-Mart doesn't provide adequate pay and benefits, doesn't employ unionized workers, and hurts smaller, independent neighborhood retail.

While Wal-Mart hasn't announced plans to open supercenters in San Francisco, it has said that it will open 40 of the large format stores in California during the next five years. It is an announcement that has not been greeted with unanimous enthusiasm - just across the bay, Oakland has banned supercenter development.

In other, similar moves:

  • Also in California, the Alameda County supervisors are considering legislation that would ban retail stores larger than 100,000 sq. ft. from devoting more than 10 percent of their sales floor to the sale of nontaxable merchandise such as groceries.

  • Across the country, in Rhode Island, the state legislature is expected to consider a bill next month that would ban stores larger than 100,000 sq. ft. from selling perishables.

These initiatives occur as the Los Angeles City Council's Housing, Community and Economic Development Committee considers a draft ordinance that would establish strict limitations on big box store development, requiring Wal-Mart to pay a prevailing wage to its employees, one that is comparable to the wages paid by unionized grocery stores that it competes with.

Wal-Mart has pledged to fight any legislation designed to inhibit its ability to operate, and has commissioned study designed to counteract the negative report.
KC's View:
Wal-Mart will declare that these moves are all union-driven, and do not represent the true feelings of these communities.

We think there probably is some truth in that. (Though it should be noted that union members also are members of these communities. Just because they hold a UFCW card doesn’t mean they don't have a vote.)

But we also think that at some point, Wal-Mart is going to have to deal with the fact that it is viewed as the commercial equivalent of the Death Star in certain quarters. It will have to deal with the raft of lousy publicity it is getting, and the relentless scrutiny that its moves and people receive.

It will have to choose how to respond to these circumstances. And how it does will speak volumes about the kind of company it is.