Monday, September 19, 2005

 

Walmart's March to Domination

How can any blog that attempts to cover development in California not mention Walmart? There is no need to describe this company, as I am sure most readers would know about it. Walmart is the largest company in the world. Moreover, Walmart intends to get bigger.

Walmart has often been in the news of towns large and small throughout California. Often criticized for providing low paying jobs and monopolizing prices that drive smaller companies out of business, Walmart fights back with statements about the high numbers of jobs it creates and its strong consumer support. As a function of the free market system, Walmart buys in such high bulk that it can afford to sell products for prices some stores might acquire them for wholesale. Also as a function of capitalism, Walmart's low, low incomes don't necessarily attract the best and the brightest from among the retail industry. Through attrition, though, Walmart will eventually cause other area businesses to close, forcing some retail workers to accept lower paying jobs to compete with or work for Walmart. This is why Unions are against the company.

As for development issues, Walmart has often been prevented from building its huge stores in many communities. These cities have rejected the store not only for the sake of existing businesses, but also because of Walmart's insistence on placing its aesthetically boring "big box" in a specific spot. Walmart has often refused to consider other locations. As this has occurred in California as well as other states, Walmart has recently started making exceptions in the design of its new stores, in order to take on the "look" of the adopted town. Englewood voted against an initiative Walmart started to have a store built in that town. Sacramento is currently considering ways to fight a Walmart proposal to establish a store in the city's downtown mall.

Now Walmart has taken it's business presence to a new level. Last year, Walmart shut down a store in Stockton only to build one of the state's first "Super" Walmart across the street. Super Walmarts contain grocery aisles, as well as the products normally seen in Walmarts. This has created a lot of fear and fights from unions, who have created high paying, professional jobs in the grocery industry. Super Walmarts are likely to cause many current grocery stores to go out of business. Walmart currently has seven super stores in California, but plans more stores soon. They are currently building in Citrus Heights, and are planning an Elk Grove store.

There are pluses and minuses to Walmart's continuing expansion of operations. The Central Valley's income levels are already below levels paid in other areas of the state. It does not seem advantageous for Valley towns to create more low paying jobs at the expense of higher existing grocery incomes. However, it is highly likely Walmart will look to the Valley first. The Valley has lower land prices, larger undeveloped flat land spots, and a less organized work force (than along the coast). Another thought: the Valley still relies heavily on agriculture. Walmart's buying clout, especially as it gains a higher share of the nation's grocery industry, may result in the fall of comodity prices. (Maybe we should encourage Walmart to get into the gas station business!) Think about these issues the next time you pick up a case of "Sam's Choice" soda.

Comments: Post a Comment

<< Home

This page is powered by Blogger. Isn't yours?