California Laws Targeting Supercenters Raise Concerns

Date: 1 Feb 2004 | posted in: Retail | 0 Facebooktwitterredditmail

Rather than capping the size of all retail stores, a growing number of cities and counties in California are banning supercenters in particular. These are generally defined as stores over 90,000 or 100,000 square feet that devote more than 5 or 10 percent of their floor area to non-taxable grocery items.

Under these ordinances, developers can still build massive box stores, so long as they do not combine department store merchandise and a full supermarket under one roof. The measures primarily affect Wal-Mart, which already has 1,400 supercenters nationally and is currently building the first of 40 supercenters slated for California. Kmart and Target are the only other national retailers operating supercenters. Together they have about 200.

The cities of Turlock, Oakland, and Martinez, along with several smaller towns and the counties of Contra Costa and Alameda, have already prohibited supercenters. Bans are under consideration in San Diego, San Francisco, and Los Angeles.

Supporters of these laws—including many community organizations, local policymakers, and the United Food and Commercial Workers (UFCW) union, which represent supermarket workers—contend that supercenters have far greater impacts than other kinds big box stores and therefore warrant special consideration.

In particular, they cite extremely high traffic counts at supercenters, which are caused by a unique combination of nearby residents making frequent grocery shopping trips and the regional pull of the general merchandise side of the store. They also argue that low-wage supercenters have a greater economic impact than other kinds of big boxes, because they compete directly with unionized supermarkets, which pay substantially higher wages and benefits.

But some long-time advocates of limiting the growth of large-scale chain stores believe that a better and more effective strategy is to establish size limits and other stand ards that apply across the board to all types of retail stores. They contend that, while supercenters may be worse in some regards, massive retail stores of all kinds entail such significant economic, social, environmental, and traffic costs that cities should prohibit them altogether.

“A cleaner, more straightforward way to defeat superstores,” according to Al Norman of Sprawl-Busters, “is to place a size cap on all retail buildings—regardless of what’s sold inside.” He suggests capping retail buildings at 50,000 square feet—still large enough to accommodate a department store or a full-service grocery store—and limiting each floor of a retail building to no more than 25,000 square feet, thereby encouraging multi-story development.

The New Rules Project also favors a straight size cap of 30,000 to 50,000 square feet, and advocates requiring proposals for stores over 20,000 square feet to meet strict economic and community impact standards.

These kinds of laws curb sprawl and related air and water pollution, create a more level playing field for small businesses, and reward retailers that meet high community standards.

Such approaches are much easier to justify in terms of mainstream planning principles and generally attract a stronger and much broader base of support that includes unions as well as small business owners and those concerned about sprawl and the environment. Narrowly crafted supercenter-only laws, meanwhile, are easily characterized by opponents as driven by nothing more than union self-interest.

Supercenter ordinances are also more likely to face legal challenges. Wal-Mart has already filed suit against Alameda County, contending that the county’s ordinance unfairly targets the operations of one company. While many city and county attorneys in California believe the supercenter laws are sound and will be upheld, should there be an unfavorable court ruling, it could chill efforts elsewhere to set any kind of limit on big box development.

Across-the-board size caps are well within accepted zoning practice. They are rarely challenged and have always been upheld as a valid use of local planning authority.

Finally, narrowly targeted laws are often relatively simple to get around. In Tampa, Florida, Wal-Mart just unveiled a prototype 99,000-square-foot supercenter—the smallest Wal-Mart that combines both general merchandise and a full supermarket. If successful, the store will become a model for skirting more restrictive zoning in California and, although its smaller size will mean reduced impact, it will still lower wages and exacerbate traffic.

— Examples of size caps
— Examples of community impact laws

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Stacy Mitchell

Stacy Mitchell is co-director of the Institute for Local Self-Reliance, and directs its Independent Business Initiative, which partners with a wide range of allies to implement policies that counter concentrated power and strengthen local economies.