In 2004, the Turlock City Council voted to adopt an ordinance that prohibits stores over 100,000 square feet that devote at least 5 percent of floor space to non-taxable items (groceries). The ordinance bars Wal-Mart and Target supercenters, which feature full grocery departments. It does not affect stores that do not carry groceries, such as Home Depot. It also excludes warehouse stores that sell items in bulk, such as Costco.
Wal-Mart filed a lawsuit in 2004, claiming that the policy was unconstitutional because it interfered with the company’s right to conduct interstate commerce and discriminated against a specific type of business, in violation of the equal protection clause. In 2006, the ordinance was upheld by both state and federal courts.
Several cities in California and Arizona have adopted similar ordinances in recent years, including:
Elk Grove, CA
In July 2007, the Elk Grove City Council voted to enact an ordinance that bans retail stores over 150,000 square feet that devote at least 10 percent of floor space to groceries. The ordinance also mandates smaller versions, stores between 100,000 and 150,000, conduct detailed analyses of the stores’ effects on the community, including jobs creation, the city’s net retail sales, crime and urban decay, before the city grants a use permit.
In October 2007, the Galt City Council voted 4-1 to adopt an ordinance that bans retail stores over 140,000 square feet that devote at least 10 percent of floor area to groceries. The measure also requires stores between 100,000 -140,000 square feet with 10 percent or more floor space dedicated to groceries be analyzed for their effects on the community’s economy, crime, and urban decay.
San Diego, CA
In June 2007, the San Diego City Council voted 5-3 to adopt an ordinance that prohibits stores over 90,000 square feet that devote more than 10 percent of their floor area to groceries. Supporters of the law said it would foster smaller scale grocery stores dispersed throughout San Diego’s neighborhoods, rather than a few massive outlets that would draw car traffic from a wide radius, undermine local businesses, and disrupt the urban fabric. “I have a vision for San Diego and that vision is about walkable, livable communities, not big, mega-structures that inhibit people’s lives,” said Councilman Tony Young. However, the mayor vetoed the law and the city council did not have the votes to override the veto.
Santa Clara, CA
In April 2009, the City Council voted 5-2 to prohibit construction of stores over 80,000 square feet that devote at least 5 percent of their sales floor to grocery items.
In August 2007, Stockton City Council voted 6-2, and against the Planning Commission’s recommendations, to approve development code changes that will prohibit discount superstores in excess of 100,000 square feet, where at least ten percent of the floor area is dedicated to the sale groceries.
In 1999, the Tucson City Council voted 5-2 to adopt an ordinance that bans stores over 100,000 square feet that devote at least 10 percent of floor space to groceries. In addition, the measure allows the city to restrict hours of operation, along with noise, traffic, lighting, and imposes other design requirements.
Although supercenters do have some unique impacts that distinguish them from other large-format retail stores, ILSR favors setting an across-the-board store size cap that applies to all retail stores. From a policy standpoint, all large-scale retailers have significant impacts on the local economy, the vitality of neighborhood and downtown business districts, the environment, and community life. From a political standpoint, land use regulations that set consistent limits on the scale of retail development are likely to garner much broader support and are not vulnerable to arguments that they unfairly target particular companies.