City Council Passes Big-Box Law
The Los Angeles City Council approved on Aug. 11, by a vote of 12–1, the “Supercenter Ordinance,” a law demanding that some big-box retailers conduct an economic impact report forecasting their effect on a neighborhood’s small businesses and jobs before moving in.
The retailers in question are those building supercenters, the more than 10,000- square-foot stores that reserve more than 10 percent of their sales space to groceries and nontaxable items.
Supporters and detractors of the bill were divided on whether it hurt the free market or would save a space in the market for those who would otherwise be overwhelmed by big-box retailers.
“This is a moderate, rational law,” said Josh Kamensky, spokesman for Los Angeles City Councilman Eric Garcetti, a co-author of the bill. “It sets a standard of how of you can bring good jobs to a community.”
But Richard Giss, retail analyst for the Los Angeles office of Deloitte & Touche, said community standards were not the issue. “It’s an external attempt to change the way a corporation runs its business model,” he said.
That corporation is Bentonville, Ark.–based retailer Wal-Mart Stores Inc., which clashed with a number of city councils throughout California after announcing it intended to build 40 supercenters throughout the state. The company has already built one in La Quinta, outside of Palm Springs.
Critics say the supercenters crush small businesses and force remaining businesses to cut wages and benefits to compete.
Wal-Mart spokesman Peter Kamelos denied the validity of these criticisms. “If this law is applied fairly and equitably, it should have no impact on Wal-Mart opening supercenters in California,” Kamelos said. “If Wal-Mart is held to a higher standard than other companies, we will look at our options to remedy this situation.”
The law should take effect in mid-September, after a final reading of the law by the City Council on Aug. 18.
—Andrew Asch
