Walmart’s future in Los Angeles County?
Posted on August 16, 2012 by jway
Last week, Walmart announced two new Neighborhood Market sites in the Los Angeles County cities of Downey and Bell Garden. It’s a worrying but not unexpected sign for organizations who’ve argued that Walmart’s expansion into the LA area isn’t about a handful of stores, but a broader strategy to dominate the market.
Several months ago, researchers at the Los Angeles Alliance for a New Economy (LAANE) released a study describing what the “Walmartization of Los Angeles” may look like if the company reaches its national grocery market share of 21% in LA County. Their projections include 212 Walmart stores, a loss of 8,744 retail jobs, $621 million in annual lost wages, and an increase of 9,400 employees using Medi-Cal, the state of California’s Medicaid program that serves seniors and low-income families. That last figure comes as no surprise to those who’ve followed Walmart’s healthcare practices. As recently as 2010, Walmart led all employers in the number of employees on public rolls in 21 out of the 23 states where data is available.
The company’s response to LAANE’s study has been typical of what we saw in New York, where a similar analysis was conducted by the Alliance for a Greater New York (ALIGN). Walmart didn’t explicitly deny the findings of either study or claims that they’re planning a large-scale expansion into New York or Los Angeles. Instead, they suggested that it would take a while before a scenario like this plays out.
“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,” claimed Walmart spokesperson Steve Restivo.
But it’s Restivo who has attempted to manipulate reality. Walmart’s national grocery market share – the focus of the LAANE and ALIGN studies – was achieved in a much shorter period of time than fifty years. Walmart didn’t open a Supercenter, its first format to include a full-stocked grocery section, until 1988. It would be another 10 years before Walmart introduced the Neighborhood Market, a grocery-only format. And in May of this year, the company announced it would aggressively roll-out 80-100 small format stores in the coming year.
In truth, Walmart has built its grocery market share over the last 24 years (not five long decades) with Supercenter and Neighborhood Market openings skewed heavily toward the back half of that time period. As groups like LAANE and ALIGN consider the long-term implications of new Walmart stores in their area, Walmart should be more forthright about its past and its future.
This post was written by Kurt Scott.