Battling Big Box Bashers

By Bob Howard
Globe St. Retail
Feb. 10, 2005

LONG BEACH, CA-What's striking about California's big box battle is not so much what is being talked about as what isn't being discussed, according to an International Council of Shopping Centers panel here Wednesday that outlined the opposition to big box retailers in California, one of the bastions of such opposition, and disputed the arguments raised by those who are fighting Wal-Mart and other large-format retailers. The panel, titled "Big Box Mania," was one of the featured discussions at the ICSC's Southern California Idea Exchange and Alliance Program at the Long Beach Convention Center.

The ICSC's program noted that an increasing number of municipalities, and in some cases county and state governments, are enacting zoning laws designed to curtail the expansion of large format retailers. Panelist Bob McAdam, VP of corporate affairs for Bentonville, AR-based Wal-Mart, framed much of the discussion by declaring that the issues that are most often raised by Wal-Mart foes are not actually what the big box battle is all about. The debate, he said is "not about wages and benefits" paid by Wal-Mart and is not about small businesses hurt by big retailers, not about mom-and-pop grocery stores, and not about the environment, traffic congestion, the economic impact of Wal-Mart or other issues raised by citizen groups or public officials who oppose large retail formats. Rather, McAdam said, the battle is more a contest between big box retailers and those who have something to lose if Wal-Mart and others continue to expand. "I think we're a direct threat to vested interests" that have personal and financial stakes in thwarting the big box stores, McAdam said. The Wal-Mart VP said the retailer's growth plans call for 40 new superstores in California over the next few years, a target that it has every intention of hitting. The California superstores will include one in Palmdale later this year, the first of Wal-Mart's superstores in Los Angeles County.

McAdam's comments were buttressed by panelist Rex Hime, CEO of the Sacramento-based California Business Properties Assn., and by other panelists including Jack Kyser, chief economist for the L.A. County Economic Development Corp. and Gregory Melich, a managing director from New York-based Morgan Stanley. According to Hime, one of the chief issues in the big box debate is unionization. Unions oppose big box retailers who are staffed by nonunion labor, he said, and Wal-Mart is the chief target because of its size. According to Wal-Mart's McAdam, the retailer is a target because it is the second largest private employer in California with 68,000 workers.

Wednesday’s ICSC panel underscored the ongoing debate in California about big box retailers, which have been welcomed in some parts of the state and spurned in others. Some communities have courted Wal-Mart and other large-format retailers because retailers bring sales tax revenues to cities, but other cities have cited many of the same arguments mentioned by McAdam. The “Big Box Mania” panel was part of a day of ICSC meetings that included sessions on retail trends in Southern California and how to develop quality retail centers economically as well as deal-making and exhibits.