California: What’s in Store
CALIFORNIANS are shopping again — and still fighting over Wal-Mart. Supermarket workers ended their 20-week strike in early March, ratifying a three-year contract with Safeway Stores, Kroger Co. and Albertsons. At the same time, one California community voted down a ban on supercenters, and another quashed re-zoning that would have let Wal-Mart Stores build.
Wal-Mart plans to build 40 supercenters in California by 2009, but a number of communities have fought back with bans on big-box stores selling groceries (January 2004). San Marcos, CA, voters nixed a re-zoning plan that would have opened a 20-acre lot for a Wal-Mart store, the city’s second. A Contra Costa County referendum banning stores over 100,000 feet failed by a slim 53.8% to 46.2% margin.
Meanwhile, San Diego is still mulling its ban on big-box retail: Committee hearings are scheduled for April, and the city council could get a final ordinance proposal by early summer. Los Angeles may also bar big-box stores, and at least three lawsuits over Wal-Mart are pending in other communities.
Wal-Mart expansion means more competition for grocers, who bear higher healthcare costs. That was one cause of the October-through-February grocery strike. In late February, however, members of the United Food and Commercial Workers Union approved, by an 86% margin, a three-year contract with Safeway Stores, Albertsons and Kroger Co.’s Ralphs stores. Employees continue to get healthcare coverage, but will have to shoulder more of the cost. The contract covers 70,000 UFCW members.
The strike affected 900 stores and cost grocers an estimated $1 billion-plus in lost sales. An antitrust suit filed against the retailers by California’s Attorney General will move forward (no court date had been set by press time). The suit, filed in early February, charges that the grocers’ mutual aid pact violates antitrust laws because it included Food 4 Less, a Kroger division not affected by the strike, and the pact extended for two weeks after the end of the strike, enabling grocers to keep prices artificially high to make up for profits lost during the strike.
