Projections for Walmart’s LA Expansion
Posted on June 28, 2012 by jway
On Tuesday, the Los Angeles Alliance for a New Economy (LAANE) released analysis detailing what the future of LA County may look like if Walmart expands according to its current patterns.
Using Walmart’s national grocery market share of 21% as a baseline, LAANE projected that the company would have to open 212 stores in LA County to match that level of saturation. As the company pushes a more aggressive roll-out of its small format stores (like the Neighborhood Market it seeks to build in LA’s Chinatown) and continues to seek by-right sites that are not subject to rigorous local government review, the prospect of several hundred store openings in the LA area is turning heads among residents and community leaders.
The LAANE analysis also estimates the local economic damage associated with that kind of expansion: a loss of 8,744 retail jobs, $621 million in annual lost wages and an increase of 9,400 employees using Medi-Cal. This analysis doesn’t even speak to the impact that the new Walmart stores would have on small businesses, an effect that has been widely documented.
Of course, Walmart was quick to dismiss LAANE’s findings as the company works to repair damage created by this month’s public relations fiasco involving the infiltration of a Warehouse Workers United Event by a PR representative posing as a journalist.
Walmart Director of Community Affairs Steve Restivo said the following of the LAANE study:
“The fact that any national market share we currently enjoy took five decades to achieve is somehow lost on [the report's authors] and shows the depths to which they will sink to try and manipulate reality.”
But the reality is that it did not take Walmart 50 years to capture 21% of the national grocery market share. Walmart introduced grocery to its stores in 1988, when the first Supercenter opened, and did not open its first stand-alone grocery store until 1998. With the company’s added focus on small format stores – Walmart recently told Supermarket News that it plans to roll-out an additional 500 to 1,000 Neighborhood Markets – the timeline for market saturation could be greatly compressed.
This post was written by Kurt Scott.