San Diego Council Bans Retail Choice; Mayor Mulls Veto

Published February 1, 2007

Wal-Mart Stores Inc. may be banned from building Supercenter stores in San Diego, the result of a 5-3 vote of the city council on November 28 to prohibit stores of more than 90,000 square feet that use 10 percent of space to sell groceries and other merchandise that is not subject to sales tax.

The prohibition targets Wal-Mart Supercenter stores, which average 185,000 square feet and sell groceries.

Mayor Jerry Sanders has threatened to veto the ban. The city council would need five votes to override a veto.

‘Social Engineering’

“What the council did tonight was social engineering, not good public policy,” mayoral spokesman Fred Sainz told reporters after the vote.

Councilman Tony Young, who joined the 5-3 majority, told Associated Press reporter Elliot Spagat, “I have a vision for San Diego and that vision is about walkable, livable communities, not big mega-structures that inhibit people’s lives.”

“We are very disappointed that the San Diego City Council would rather curry favor with special interest groups than support consumers and their right to choose where to shop,” said Kelly Hobbs, a Wal-Mart spokesperson at the company’s headquarters in Bentonville, Arkansas.

“And at a time when San Diego is facing financial troubles, we think it is irresponsible for the council to consider an ordinance that would restrict businesses in the city,” Hobbs continued.

Economic Harm

Hobbs said the decision could be especially harmful to lower-income consumers, citing a recent study by the Los Angeles Area Economic Development Corporation that found the addition of Wal-Mart Supercenters into a seven-county area of Southern California would save consumers $3.76 billion a year and create more than 36,000 jobs.

“This type of ordinance limits consumer choice by preventing customers from benefiting from one-stop shopping,” Hobbs said. “Supercenters [including those established by Wal-Mart competitors such as Target] have been shown to save the average family over $2,300 annually.

“These restrictions aren’t about reducing negative impacts on communities. They’re about competition and consumer choice,” Hobbs said.

Hobbs said they’re also about jobs.

Wal-Mart “offers great benefits packages for both part- and full-time associates that include health care coverage for as little as $23, 401k, and profit sharing,” Hobbs said. “Our average hourly wage in San Diego is almost $11 an hour. In fact, a recent San Diego Magazine survey rated Wal-Mart as one of the top 10 employers in San Diego.”

Steve Stanek ([email protected]) is managing editor of Budget & Tax News.