Grocery store chains, rural traditionalists, and mom-and-pop shops weren't able to stunt Wal-Mart's (NYSE:WMT) growth the way a simple piece of paper has. By prohibiting establishments with more than 100,000 square feet of selling space to derive more than 10% of sales from non-taxable merchandise, Alameda County's Large Scale Retail Ordinance effectively prevents Wal-Mart from opening a Supercenter in the California county.
The Supercenter concept relies on cheap groceries and prescription refills to keep shoppers coming back. That won't fly in Alameda County. The county's Board of Supervisors approved the ordinance -- which might as well be labeled "Keep Wal-Mart Supercenter Out" -- earlier this month. Last night, Wal-Mart filed a petition to have the ordinance overturned.
If grocers with operations in California, including Kroger (NYSE:KR), Safeway (NYSE:SWY), and Albertson's (NYSE:ABS) are applauding the move, they are doing so quietly. All three chains are trying to mop up their own reputations in the aftermath of their recent union disputes.
It's easy to hate Wal-Mart. We have a built-in instinct to root for the underdog. Wal-Mart is no underdog. Yet, the world's leading retailer makes a convincing case when it points out that the typical Supercenter will collect $4.5 million a year in sales-tax revenue, to say nothing of its own property tax tab.
Wal-Mart argues that it is ultimately the community that should decide whether it patronizes a store. Providing lower prices on groceries allows customers to have more disposable income to spend locally.
That sounds reasonable, so long as you are not predisposed to vilifying Wal-Mart. After all, if you're in the mood to launch a verbal Molotov Cocktail, just belt out a "Hey, that Wal-Mart sure is something, isn't it?" at a union function. Non-unionized Wal-Mart made enemies on the way up, and where you stand when it comes to Wal-Mart may very well come down to where you stand on organized labor.
Either way, if Wal-Mart's petition fails, it doesn't mean that Alameda is in the clear. I can almost picture the press conference now: "Ladies and gentlemen of Alameda, I now present you the prototype 99,000 square-foot Supercenter. Shop on!"
Is Wal-Mart burying competitors unfairly, or is survival of the fittest in the best interest of the consumer? Will others follow Alameda's lead? Did Safeway and area unions really play a part in pushing the controversial ordinance? All this and more -- in the Wal-Mart discussion board. Only on Fool.com.
