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Wal-Mart Asked to Develop Plan for Community

In a 26-page paper released today, UEPI and its Center for Food and Justice analyze Wal-Mart’s labor and land use impacts on urban communities, as well as food access implications of the Supercenter model of food retailing. Supercenters combine groceries and department store goods in stores roughly the size of four football fields. The report examines such issues as food selection, pricing and store accessibility based on a case study of the La Quinta, Calif., Supercenter, which in spring 2004 was the first to open in the state.

“With Wal-Mart poised to expand its Supercenter approach to food retailing in the Los Angeles region and throughout California, residents and elected officials have the opportunity to decide what business model they want to support and what kind of policy tools are needed to facilitate that choice,” said report co-author Robert Gottlieb, Occidental professor of urban and environmental policy and UEPI director.

Because of Wal-Mart’s marketplace clout (it is the world’s biggest company and the largest employer in the nation), the company is able to price its groceries at or near cost and make a profit from non-food items, Gottlieb said. This pricing strategy – in which groceries are the lure to get consumers into the store – makes it nearly impossible for supermarkets to compete, he added.

The situation is made all the more challenging by a persistent grocery store gap in Los Angeles, particularly in low-income and minority communities. A separate UEPI study shows that the number of supermarkets in areas affected by the 1992 Los Angeles riots was the same in 2002, making it difficult for transit-dependent residents to buy fresh produce outside of their immediate neighborhoods. Middle- and upper-income areas, meanwhile, have about three times as many grocery stories per capita.

“With obesity and diet-related illnesses rapidly becoming the nation’s No. 1 preventable cause of death, L.A.’s grocery store gap is not just another statistic of social disparity,” said UEPI Communications Director Amanda Shaffer, a 2001 Occidental graduate who was the author of the grocery gap study. Shaffer adds that “The lack of access to fresh, healthy, affordable food in many neighborhoods is a public health crisis.”

A survey of Wal-Mart’s La Quinta Supercenter and nearby chain grocery stores find that “the selection of fresh produce and other healthy food items at Wal-Mart is adequate, and prices are low,” the report says. However, the footprint of such mega-stores makes them ill-suited for denser urban neighborhoods, and their low prices would likely have a significant negative impact on existing grocery stores in already underserved urban communities.

In composing its proposed community benefits plan, the UEPI paper considered food access, labor and land use/environmental protections. Its recommendations to Wal-Mart include:

• Developing a transportation plan to ensure that people without cars have reasonably easy access to the store. Transportation strategies could include locating the new store near existing transit stops, requiring the store to provide shuttle service to shoppers, and improving public transportation options to the store location.
   

• Providing on-site farmers markets to attract customers and offer fresh produce from local farms, a strategy that has been successfully used by grocery stores to attract customers on slow business days to also buy non-fresh food items.
   

• Using compact designs to minimize the amount of land needed to build new box stores. Limits on the amount of aboveground parking spaces and innovative use of multi-level buildings can reduce the amount of land consumed by large retail stores.
   

•  Paying living wages for employees, possible tied to the prevailing wage paid by large retail stores other than Wal-Mart.

The paper also considered the use of big box ordinances to restrict the size of retail stores and the types of goods sold within the store. In California, the cities of Oakland, Martinez, Turlock and Agoura Hills, as well as Alameda and Contra Costa counties, have passed ordinances banning stores larger than 100,000 square feet that devote more than 5 to 10 percent of shelf space to grocery items or other non-taxable items. 

“Given Wal-Mart’s likely status as a major player in food retail, it is imperative that further research be conducted and policies considered that promote access to healthy food for everyone,” Gottlieb said. “The policy decisions to be taken in Los Angeles and other California communities will ultimately influence what model will prevail.”