Wal-Mart, the muscle-bound superstore that likes to bully its
way into places it's not wanted, took a big hit last week. Its
high-profile attempt to bribe its way into Inglewood, a working
class, minority city in suburban Los Angeles, failed badly.
As
democratic politics go, Wal-Mart's Inglewood bid was about as
sleazy as it gets. Rejected by the City Council, Wal-Mart spent
$1 million for a referendum that would have allowed it to build
a "supercenter" - a combination retail and grocery outlet
covering 17 football fields - by skirting normal hearing, planning
and environmental procedures.
The
company spent $100 per Inglewood voter in a blitz to persuade
citizens to defy city government. As in other cities where it
has won admission through litigation or referendum, Wal-Mart expected
an easy win in Inglewood.
Instead,
for a campaign in which it outspent the opposition 10-1, Wal-Mart
won less than 40 percent of the vote.
People
are catching on to this company, to its tactics, business philosophy
and impact on communities. As in Inglewood, most community reaction
is directed at Wal-Mart's giant combination retail and grocery
supercenters, with their potential to raze neighborhood businesses
as thoroughly as a fire-bombing raid.
Since
the recent grocery strike, many are paying more attention to Wal-Mart.
That strike, which since has resulted in the closing of 15 Ralphs
stores across Southern California, was the result of Wal-Mart's
plans to open 40 supercenters in California (if communities let
them in). Only one has been opened so far, in La Quinta. Nationwide,
Wal-Mart plans 1,000 supercenters over the next five years.
But
what works for Wal-Mart in rural or desert communities, where
more space for big-box stores is available and fewer local businesses
are affected, has found resistance in urban and suburban areas.
With
its deep pockets, Wal-Mart often defeats local government, but
its methods and philosophy are making enemies. That was the case
when San Marcos, Calif., turned down a Wal-Mart store in a referendum
last month, and that's the case in Inglewood, where citizens clearly
objected to having local government bamboozled.
In
Los Angeles, which surrounds Inglewood, the City Council is drafting
an ordinance effectively prohibiting supercenters in the city.
San Diego, where Wal-Mart as yet plans no supercenters, is considering
a similar ordinance. Oakland already has banned them. In numerous
other cities, litigation is under way.
The
feeling of distaste grows as Wal-Mart's arrogance and strong-arm
tactics build community opposition. Inglewood is Wal-Mart's biggest
defeat because it was a naked attempt to show that a low-wage,
high unemployment community could be bought at the right price;
that, for enough coin, citizens would turn their backs on government
and planners. Wal-Mart's win was supposed to be a slam-dunk.
If
low prices were all that mattered, communities would be rolling
out red carpets for this company. But many communities don't like
the trade-off of community-centered and home-grown businesses
for low prices. Some communities like their downtowns, Main Streets
within walking distance, merchants whom they know and who pay
employees enough not just to live on, but to live in communities
where they work.
Wal-Mart,
whose five Walton owners are among the world's richest people,
pays low wages and offers minimum health coverage to employees.
Its business philosophy is based on enriching its founding family
rather than achieving an equitable sharing of profits among founders,
shareholders and workers, the goal of most publicly held companies.
The store's bullying ways are seen in its numerous lawsuits, with
communities, employees, with the federal government over the use
of illegal immigrant labor.
Last
month, The Wall Street Journal compared Wal-Mart with Costco,
another large retailer and grocer. It pointed out that Costco,
in contrast to Wal-Mart, "is held up as a retailer that does
it right, paying well and offering generous benefits" to
employees.
Costco
draws criticism from Wall Street for sharing its success with
its employees, reported the Journal. "Public companies need
to care for shareholders first," said a Wall Street analyst
critical of Costco, noting that Costco stock traded at only 20
times earnings compared with Wal-Mart's 24 times. "Costco
runs its business like it is a private company," sniffed
this critic.
To
that, Costco President and Chief Executive Officer Jim Sinegal
replied, "I happen to believe that in order to reward the
shareholder in the long term, you have to please your customers
and workers."
Two
different philosophies: One leads to the Waltons, the sheiks of
Arkansas, by holding workers' salaries and benefits to bare minimums.
The other allows workers to share in the profits of their company.
Costco pays its workers about $5 an hour more compared to Wal-Mart
and has about twice as many workers covered by company health
care.
Oh,
yes, and Costco has a store in Inglewood.
