By Hillel Aron
By Joseph Tsidulko
By Patrick Range McDonald
By David Futch
By Hillel Aron
By Dennis Romero
By Jill Stewart
By Dennis Romero
Photo by Jack Gould
I’ve been standing next to my shopping cart for at least 20 minutes, and now the woman behind me wants me to keep an eye on her stuff while she takes her little girl to the restroom. No problem. This line isn’t going anywhere. Half of the 16 checkout stands are closed, so another 10 minutes probably stands between me and the packed Panorama City parking lot outside.
I don’t even want the jeans I threw in my cart, and I’ll probably end up giving them away. What are they? Rustler? “Made in Honduras of imported fabric.” $9.99. I’m in line at what used to be the Broadway not to buy stuff but to survey the front lines of a battle for the city’s future. This store in a once-decaying part of the San Fernando Valley is the first beachhead in the final urban assault of the world’s largest corporation. This is Wal-Mart.
Environmental and social concerns abound over Target, Kmart, Home Depot and other so-called big-box stores of 100,000 square feet or more, but elected officials generally have kept quiet about them. After all, the giant retailers provide sales tax revenues and bring back desperately needed commerce and foot traffic to economically devastated districts like Panorama City and Crenshaw. But the silence over big-box stores, especially Wal-Mart, is ending as the forces of progressive social policy gain more following in City Hall — and as Wal-Mart expands into the grocery business. No longer just the Earth’s largest seller of laundry detergent, furniture, clothes, DVDs and pretty much everything else, Wal-Mart now is the world’s biggest supermarket, selling low-priced groceries while paying low wages and extending paltry benefits to its more than one million nonunion workers.
Unionized employees at major grocery chains in Southern California start at the minimum wage of $6.75 an hour for beginning baggers. Cashiers can earn up to $17.90. Wal-Mart does not publicly discuss wages. Court records in a discrimination lawsuit put average Wal-Mart pay for hourly workers at $8.23 in 2001.
Pressure from Wal-Mart’s lower costs and grocery prices moved Ralphs, Vons and Albertsons to demand Southern California contract concessions from the United Food and Commercial Workers (UFCW), which responded this week with a strike vote. As grocery workers prepare to picket, their union, Councilman Eric Garcetti and the Los Angeles Alliance for a New Economy (LAANE) are readying an ordinance that would bar Wal-Mart from ever selling groceries in Los Angeles — unless the virulently anti-union corporation takes the unlikely step of agreeing to pay its grocery workers a prevailing wage.
Here in the Panorama City Wal-Mart, the refrigerator and freezer cases are being replaced, so for now they’re selling cereal but no milk. No bacon, cold cuts, packed meats, ice cream, frozen dinners, or any of the stuff you can get at the city’s newest Wal-Mart, which took the space of the old Broadway at the Baldwin Hills–Crenshaw Mall. You can feed a family of four on what you get from the Baldwin-Crenshaw store, though the corporate giant from Bentonville, Arkansas, has yet to open any full-service grocery centers in California.
But the company has announced plans for 40 in-state Supercenters — a sort of Wal-Mart on steroids that includes a huge supermarket. The first is to open in La Quinta, the next in Palm Springs. And Wal-Mart is keeping its options open for the rest of the state, meeting UFCW-sponsored restrictions with that most California of responses, the ballot referendum. Voters in Contra Costa County, for example, will soon decide whether to overturn a law approved by their Board of Supervisors that bars retail establishments of a particular size from devoting a certain percentage of their floor area to the sale of nontaxable goods — legal jargon that, in effect, prevents big-box stores like Wal-Mart from selling groceries and undercutting unionized supermarkets.
But the big battle, the one that Los Angeles lawyers, developers and elected officials will be watching, is in Inglewood. There, a year ago, the City Council passed its own version of the big-box grocery ban, only to rescind it under legal pressure from Wal-Mart. Now, the corporation is gathering signatures for a March ballot measure that would effectively bar Inglewood from ever again trying to legislate over big-box development. If taking its case directly to the people proves successful in Inglewood, Wal-Mart could completely reinvent the way developers deal with local governments. Los Angeles is on notice.
“Wal-Mart,” company spokesman Peter Kanelos says, “will oppose any ordinance that singles out our ability to provide a better and more convenient shopping experience.”
Labor leaders and their political allies like Garcetti aren’t flinching. “We’ve always been able to stand up for what we believe in in L.A. and I don’t see any reason to retreat from those principles or not to act on them simply because we’re facing the largest company in America,” Garcetti says.
The councilman, virtually all of his colleagues, the mayor, the UFCW, the Los Angeles County Federation of Labor and LAANE — the organization that brought the “living wage” law to city contracting — are working hard to send the message that Los Angeles is a progressive town. But as bargain-hungry shoppers line up at L.A. big-box stores and beleaguered neighborhoods welcome in discount giants to mall anchor spots left vacant by dying department store chains, the world’s biggest retailer is responding with a message of its own: Los Angeles is a Wal-Mart town. Get used to it.
UFCW has been in the forefront of the Stop Wal-Mart movement for more than a decade, attempting to organize workers, or “associates,” as they are called, at Wal-Marts across the country. There was a brief moment of success, when meat-cutters at a Texas Supercenter voted to organize. But the moment was short-lived. Wal-Mart almost immediately decided customers preferred only prepackaged meats, and reassigned the meat-cutting associates.
The union pushed through a California law in 1999 that would have forbid grocery sales at big-box stores statewide, but Gray Davis vetoed it. The next year, Jackie Goldberg, still on the Los Angeles City Council, introduced a city version of the restriction. Similar to municipal measures being tried around the state, Goldberg’s proposal did not mention Wal-Mart by name but instead barred any retail seller of more than 150,000 square feet that devotes more than 10 percent of its space to the sale of nontaxable items — in other words, prescription drugs and groceries.
The longtime chairman of the City Council’s Planning and Land Use Committee was Hal Bernson, the council’s most conservative member and the leading backer of his district’s massive Porter Ranch development — where, at that moment, Wal-Mart was constructing its second Los Angeles store. Bernson didn’t like the proposal, nor did the city’s Planning Commission, and when Goldberg left to take a seat on the state Assembly, the ordinance was pared down into a set of parking and design guidelines for big-box developments.
The new Land Use committee chair, Ed Reyes, used to be a planning deputy for Councilman Mike Hernandez — Goldberg’s co-sponsor on the original L.A. proposal. The council also has picked up a handful of younger members who got where they are with the support of organized labor.
“You have a different kind of leadership now,” says Hernandez, who now works as a council staffer, “and the city is looking at a whole different set of issues.”
With Reyes enthusiastically supporting a big-box restriction, Eric Garcetti reintroduced the proposal. City Attorney Rocky Delgadillo’s office hasn’t finalized the language, and Wal-Mart and city officials are officially awaiting studies from the Community Development Department and two contractors: Rodino and Associates, hired by the city, and the Los Angeles County Economic Development Corporation (LAEDC), hired by Wal-Mart.
But everyone knows there will be a traditional attempt to ban grocery sales in big-box stores, with two new twists. The law will apply only to four types of city economic development zones, plus a one-mile buffer, and it will permit big-box grocers if they agree to pay a prevailing wage — meaning something close to what union grocery workers get. City lawyers contend that both innovations make the law more likely to hold up in court, since there is no outright ban. As it turns out, though, the four zones plus the one-mile buffer cover pretty much the entire city, except for a few areas on the Westside and in the West Valley where large developable lots are scarce and the cost of land for a new Wal-Mart is prohibitive. And Wal-Mart has never agreed to any kind of wage mandate anywhere, other than federal and state minimum-wage laws.
Attorney Madeline Janis-Aparicio, who led the successful LAANE campaign to require all city contractors to pay their workers a “living wage,” has embraced the movement to restrict Wal-Mart grocery sales as part of her organization’s fight for “Growth With Justice.” Janis-Aparicio notes that the current campaign is not about sprawl or protecting mom-and-pop stores — although there may be merit to such battles at another time or perhaps in another place.
Garcetti agrees. “I would even want the Super Wal-Marts here,” Garcetti says. “But we want a Superstore to come to L.A. on our terms, not on theirs. Why would we spend all this money investing in redevelopment areas and empowerment zones with community development dollars to try to revitalize a certain area, and then invite folks in on their own terms in ways that affect the public money that we’re spending here?”
At a July hearing, Garcetti told a raucous auditorium filled with chanting UFCW members on one side and blue-vested Wal-Mart workers on the other that the ordinance was part of his “bond and commitment” to his father’s parents, who both were UFCW workers.
“This is an attempt to stand up here and draw the line in Los Angeles,” Garcetti announced.
Greg Freeman was at the same hearing and is conducting the L.A. County Economic Development Corporation study for Wal-Mart. Freeman insisted that his study would be even-handed and that he had reached no conclusions. But he proceeded to warn against the “traditional anti-Wal-Mart spin.”
“Nobody is talking about the fact that a Supercenter is lowering the cost of food for a lot of people,” Freeman said. He also noted that Wal-Mart has tremendous buying power in a city that still manufactures apparel and other goods. “We should look at whether it makes sense to be alienating one of the city’s best customers,” he said.
Freeman also noted that if Wal-Mart Supercenters are kept out of Los Angeles they will just draw away customers and sales tax revenues by locating in nearby communities — like Inglewood.
Janis-Aparicio says she is outraged that the LAEDC, which includes city and county officials on its board and is known for unbiased economic forecasting, would hire itself out to a corporation like Wal-Mart.
“They were already advocating for Wal-Mart at the hearing,” the LAANE leader said, “even though they claimed not to have finished their research.”
UFCW Local 770 is currently absorbed with its labor dispute with the major supermarket chains, so LAANE is taking on the fight against the Inglewood Wal-Mart proposed at a spot near Hollywood Park and the Forum. Janis-Aparicio and her colleagues are lining up ministers and store clerks to go door-to-door to fight the ballot measure that the company almost certainly will get placed on the March ballot.
The fight involves every element of Inglewood politics. A hotly disputed City Council election that went to the ballot several times over the last year ultimately ended with the ouster of Councilwoman Lorraine Johnson, a Wal-Mart backer, and election of Ralph Franklin, a UFCW business agent.
Even opponents of the Inglewood measure credit it for sheer chutzpah. It would invalidate any city law on development standards or wage laws passed since August 14. It would bar public hearings on Wal-Mart’s plan for the project site. It would virtually mandate approval by the community development and housing director. It would invalidate any competing ballot measure, if it gets more votes. And, although it would pass with a mere majority vote, it could never be rescinded unless two-thirds of Inglewood residents later vote to scrap it.
Janis-Aparicio insists that no initiative like this one has ever before been tried in the U.S. Local 770 President Rick Icaza brands the move “Orwellian.” Community activist and author Earl Ofari Hutchinson says it threatens the entire city — and that it will probably pass.
“The City of Inglewood has no chance of competing against the propaganda mill of a Wal-Mart,” Hutchinson says. “Their power is awesome. They can win the propaganda war.”
Janis-Aparicio doesn’t agree. “There’s only so much slick stuff that counters your pastor knocking on the door with a kid whose job is going to be lost,” she says. “If this passes, every developer with deep pockets is going to feel free to completely undercut all of the protections that we have developed. We won’t let that happen.”
Wal-Mart’s response to the movement against it in Inglewood has been typical. “All these attempts by the grocery industry to limit competition,” Wal-Mart’s Peter Kanelos says, “are borne out of organized labor’s frustration that our associates have chosen not to join their union.”
Wal-Mart is a fixture of small-town Middle America where — according to countless TV documentaries and scholarly studies — its low prices push out mom-and-pop stores on Main Street and drive the town into an economic death spiral. Its reinvention as a Los Angeles shopping mall anchor is the result of several historic developments.
The company, founded in 1962 by former discount store worker Sam Walton, appeared willing to stay close to its South and Southwest base through Walton’s death in 1992. But as Wall Street’s need for a consistent winner took the place of Walton’s vision, Wal-Mart made a play for the big city. It breached the California market in Lancaster in the 1990s — and soon found economically desperate suburbs rolling out the welcome mat on the other side of the mountains.
Two factors led Los Angeles and smaller cities to plead for Wal-Mart to come to town. The first — a phenomenon called the fiscalization of land use — had been in effect since Proposition 13 passed in 1978 and forced cities and counties with little new property tax revenues to lust for big-box sales tax generators.
“There is a real contest here,” Abel explains. “The losers so far are housing interests and smart-growthers, and people like Eric Garcetti who see his mandate to protect neighborhoods threatened by big-boxes sucking the economic life out of corridor streets and neighborhoods. It’s not good and evil, but there are choices to be made and right now it’s not a fair fight.”
The other factor that stripped Target and Kmart, but especially Wal-Mart, of their former pariah status was the self-destruction in the 1990s of Los Angeles’ long and historic department store culture.
West Coast retail empires were born in downtown L.A. more than 100 years ago when Hamburger & Sons (later known as the May Co.), then the first Robinson’s, the first Broadway and the first Bullock’s opened within blocks of each other. As they expanded and moved west they morphed into stand-alone high-fashion palaces like Bullock’s Wilshire, which showcased avant-garde art and culture when stodgy museums would have none of it.
Then, when the Broadway opened a store on Crenshaw in 1947 with a wild art-deco fin to beckon drivers, and May Co. responded with a competing store across the street, other stores quickly moved in to become part of the new shopping Oz. The shopping center, with department store anchors and attached boutiques, was born. Soon came the enclosed suburban mall, food courts, mall rats, Valley Girls, and a whole new style of shopping — and living.
But the L.A.-based Broadway chain foundered in the mid-1980s when its corporate owner, Carter-Hawley-Hale, made a clumsy restructuring attempt to head off a hostile takeover. Forced into bankruptcy, Broadway was bought by Federated Stores, which already owned Bullock’s. Federated proceeded to turn half its stores into outlets of the locally unfamiliar Macy’s chain. Bullock’s Wilshire, I. Magnin, Buffums — they all were gone.
And then it was the 1990s, and the entire economy was in a tailspin. In Van Nuys and Panorama City, where aerospace support industries were failing and General Motors closed its Firebird and Camaro plant, no one had any money to come to the failing mall with its vacant Broadway store. Over in Crenshaw, pressure from the African-American community to save the cornerstone of black L.A.’s commercial hub, repeatedly passed over by supermarkets and major retailers in what critics insisted was a type of bigoted redlining, compelled Federated to convert the dying Broadway into a Macy’s. But then Macy’s closed, and the historic building at the world’s first shopping center lay empty for four years. Until Wal-Mart called.
As in Panorama City in 1998, Wal-Mart was welcomed this year with open arms. Now the letters on the huge iconic fin that once read “Broadway” instead spell out “Wal-Mart.”
“There was a kind of a stigma about that particular part of the city,” Wal-Mart’s Peter Kanelos says. “That store sat vacant for years. We started hiring weeks before the store opened and we had no trouble attracting new associates from the community. They told us we were the first ones to come into that area with a positive outlook, and they were so appreciative of that. We are now the nation’s largest private employer of African-Americans and Hispanics, and we have over a million associates nationwide. You don’t get that way if you’re not doing something right.”
The department stores are not coming back. Michael Beyard of the Urban Land Institute predicts more shopping centers like the Grove at Farmers Market, where shoppers enjoy a sense of a town center, however fake. He predicts that increasingly those centers will include stores that once seemed too downscale to affluent shoppers.
“We are going to see big-boxes teamed, in the highest volume locations,” Beyard says. “You will see a trend toward mixing. You will see Beverly Hills matrons going to Wal-Mart. Though they probably won’t admit it.”
Rick Icaza of UFCW Local 770 found himself in a bit of a pickle this summer between Ralphs, Albertsons and Vons on the one hand and Wal-Mart on the other. Store clerks agreed to higher dues to create a fund to fight Wal-Mart’s incursion, and executives joined Icaza at two public hearings in July to support the proposed big-box ordinance.
Now, Icaza claims, management is citing Wal-Mart as its reason to cut benefits. He acknowledges that a long supermarket strike might make shoppers more enthusiastic about having a Wal-Mart Supercenter within driving distance. “But once they learn the issues,” he insists, “they will support us.”
But even if the three big chains keep their stores open during the strike, shoppers have plenty of places to buy groceries without crossing picket lines. They can shop at Ralphs’ sister store, Food 4 Less, which operates under a separate contract, or local union stores Gelsons or Stater Bros., which have committed to sign off on a UFCW contract once the big chains do, or nonunion stores like Bristol Farms. Or the limited grocery section at the Baldwin Hills–Crenshaw Wal-Mart.
Ralphs was once a small local chain like Stater Bros. It got its start just a few blocks from the first Broadway, on Spring Street in downtown Los Angeles. Today, it’s owned by the Kroger Co. of Cincinnati, and the chain’s 3,229 supermarkets did $51.4 billion in business in the U.S. in 2002, according to the Food Marketing Institute. It was enough to make Kroger the number two American grocer last year. Albertsons of Boise, Idaho, came in a distant third with $36.7 billion in sales, while California-based Safeway, which owns Vons and Pavilions, was fourth with $32.4 million. Who’s number one? Wal-Mart. Having eclipsed all department store sales combined, Wal-Mart entered the fresh food business in 1988 and last year became the world’s largest grocer, with $71.9 billion in food sales at its Supercenters and warehouse-like Sam’s Clubs. The company’s limited offerings of groceries, so far, in Los Angeles are just a morsel of what a Supercenter would stock.
The major grocery chains have only recently penetrated southern and eastern sections of Los Angeles, and some studies still raise concern over the quality of food available there. Amanda Shaffer, author of a 2002 Center for Food and Justice report on “The Persistence of L.A.’s Grocery Gap,” found the fewest supermarkets in poor and ethnic minority parts of town. The convenience stores that served many of those areas often stocked less healthful foods and fewer choices.
Wal-Mart’s Peter Kanelos says full-service Superstores would bring more choices to central city residents. Besides, he adds, the major supermarket chains have dropped the ball on serving South Los Angeles residents.
“The loser when we are kept from operating is the consumer,” Kanelos says. “When we opened stores in Las Vegas, grocery prices dropped an average of 20 percent. Is that what the city wants to keep from its grocery consumers?”
Across the city, at Porter Ranch in the northwestern corner of the San Fernando Valley, no groceries are sold at the Wal-Mart, which shares space in the “town center”–type shopping mall with a huge Ralphs. Porter Ranch was exempted from the 1986 slow-growth law and Wal-Mart needed no special permits or variances to open here. This Wal-Mart stocks business wear and other items geared toward the upscale shoppers who drive over from gated communities with mock Mediterranean names like “Sorrento Pointe.” But it’s not just the Wal-Mart that has adapted. So has the Ralphs. It competes with its next-door neighbor by stocking lawn furniture and electronics. So far, the two stores appear to be coexisting peacefully.
It’s yet to be seen what will happen when the newest L.A. Wal-Mart opens in West Hills. There, at the mall that once was called Fallbrook Square, Wal-Mart is joining a Target, a Kohl’s, a Mervyn’s, and a host of other big-box retailers. This is a “power center,” a style of shopping center that analysts say is past its peak. But it was Wal-Mart’s chance to move into a lucrative new market.
In Harbor Gateway, another Wal-Mart is going in on the site of an old Auto Nation. The area is represented by Councilwoman Janice Hahn, who once co-managed the Baldwin Hills–Crenshaw Mall, and Hahn says she got a commitment in writing that there would be no guns — or groceries — sold at the store.
“I couldn’t stop them from coming in,” Hahn says. “Wal-Mart is extremely popular. As it stands now I think it’s a good balance. Grocery stores have good union jobs and pay a living wage, but people like Wal-Mart. They shop there because it’s cheaper.”
Alma — the woman who left her cart in my care as she took her daughter to the restroom — tells me on her return that she seldom gets food at the Wal-Mart at the Panorama Mall. She drives here a couple times a week from nearby Arleta just to pick up a few things. In her cart today are several spiral-bound notebooks and a Kim Possible lunchbox for her second-grader, Angela.
“But for food we go to El Super,” she says, referring to a Latino-oriented supermarket several blocks away that carries fruits and vegetables you can’t find in most chain stores.
At the other end of the Panorama mall sits La Curacao, an appliance and furniture store created by two brothers, who hail not from the Caribbean or Venezuela, but Israel, to cater to Los Angeles’ enormous Latino market. The store is decorated with ersatz Mayan sculpture and features mariachi performers and flags of all the Latin American nations. La Curacao’s decision to locate here when business was dying and gang shootings were common on nearby Blythe Street marked the beginning of a turnaround for this area. Van Nuys Boulevard still has empty storefronts, plasma donation centers and plenty of seedy bars left over from the era of despair in the 1990s. But it is also sprouting family restaurants and markets like El Super. Wal-Mart’s arrival in 1998 was not greeted with dread, unlike in countless small towns where Main Street merchants and civic leaders mobilize to keep the big-boxes out. Van Nuys Boulevard had already been picked clean, and Wal-Mart helped to bring it back.
Alma and little Angela abruptly cut the pleasantries short when they spot what they think is a faster line a few aisles down. They dart off, so I pass the time looking over the contents of everyone else’s cart. One man, maybe 50, slinging a business blazer over his shoulder, has nothing but two bottles of soda. A young couple and three beaming kids guard a huge box — probably a TV set — and a smaller one, which contains a hair dryer. A rather hefty girl, maybe 17, wearing a ponytail, low-rise jeans, a cropped T-shirt and a glittering navel ring on an imposing belly, has in her cart nothing but one lonely pair of socks. Behind me, for what seems like hours, TV monitors blast away about how I can change my eye color with help from the optometry department.
I am curious as to how many of them will have carts full of milk and packaged meats once the cold case is fixed, and whether the strike against Ralphs, Vons and Albertsons still will be on. LAANE and Garcetti may succeed in their efforts to bar Supercenters in L.A., but if they wanted to block Wal-Mart’s influence on wages and benefits for grocery workers, the strike suggests they already have lost.
And now, an eternity later, I am at the checkout stand, where the employee wears a red vest with the words “How may I help you?” on the back. She rings up my goods, takes my cash, hands me the change along with my stuff in a blue plastic bag bearing a yellow smiley face, and offers words we can expect to be hearing a lot more in Los Angeles.
“Thank you!” she says. “Thank you for shopping at Wal-Mart!”