Big-Box Food Fights

There's a looming battle over groceries, but the battleground itself is the local government land-use approval process.
February 2001
William Fulton
By William Fulton  |  Columnist
Director of the Kinder Institute for Urban Research at Rice University and former mayor of Ventura, Calif.

This Christmas was the toughest holiday season for retailers in almost a decade. Business was off during the whole season. Even big retailing chains such as Home Depot offered discounts before Christmas Day.

Yet, despite talk of a recession, many big retailers are still pursuing aggressive expansion plans. Wal-Mart announced last fall it would add 275 stores during the coming year. And because of its financial strength, the chain will, as will others, "self-finance" their new stores, meaning they don't have to rely on skittish real estate capital markets to expand. In other words, recession or not, these companies plan to continue their decade-long building binge--a binge that has already altered not only the American business landscape but the physical landscape of America's communities as well. Unless, that is, the construction of new big-box stores is successfully halted in communities around the nation. The pressure on those communities and their land-use permit regulations will come-- believe it or not--from labor unions, which are growing in numbers for the first time in decades. The growth is being fed by organizing low- end immigrant workers in big cities. As part of their organizational efforts, unions have been targeting some of the big retailers, especially Wal-Mart and Costco, which are not unionized.

The coming battle will be over the sale of groceries in big-box stores. Grocery workers are unionized and their unions--such as the United Food and Commercial Workers--have targeted Wal-Mart in particular. That's because Wal-Mart is moving into the grocery business. This year, the company will build 80 "superstores" that sell groceries and 15 to 20 smaller "Neighborhood Market" grocery stores. But if the battle is over groceries, the battleground itself is the local government land-use approval process. And that sets up a curious and difficult dynamic for many local elected officials.

Increasingly, the unions are fighting big boxes not by attempting to organize their workers but by quite literally opposing construction. They are teaming up with community and neighborhood activists to oppose land-use permits for large retail stores--and to restrict their ability to sell groceries.

In California, for example, the unions came within a hair's breadth of getting pro-union Governor Gray Davis to sign off on a state law prohibiting local governments from approving big boxes that sell groceries. Davis vetoed the bill, but the unions are now promoting local ordinances prohibiting grocery big-box construction in Los Angeles, the college town of San Luis Obispo and other liberal jurisdictions. They've also sued and promoted ballot measures to stop big boxes that sell groceries.

The union anti-big-box strategy puts local elected officials in a tough spot. The union movement has considerable political leverage over liberal politicians, in large part because public employee unions are among the biggest backers of local political campaigns. At the same time, however, many of these same liberal politicians have supported big-box development on the theory that it will increase tax revenue, which will make it easier to provide raises to unionized public employees. This is especially true in smaller suburban jurisdictions where there is less pressure to pass living-wage ordinances and pursue other "social action" items through municipal ordinances, even when the jurisdictions' voters are liberal.

The union strategy puts the locals in a tough spot by asking them to use their land-use regulatory powers to promote an agenda that isn't really about land use. The union ordinances generally prohibit land- use approvals of large retail stores (more than 100,000 or 150,000 square feet) if more than a certain percentage of the floor area (usually 7.5 to 10 percent) is devoted to a particular type of retailing (typically, "non-taxable merchandise"). It's an article of faith in land-use planning that you can control the building--that is, you can regulate its size and shape and its relationship to other buildings--but you can't really dictate which businesses the building houses. A typical impulse of local officials is to try to use these restrictions on physical form to protect some social or economic value the community holds. But when these restrictions are crafted to pursue a narrow agenda, the community at large usually suffers.

Many zoning ordinances promoted by rich residents of affluent suburbs have sought to exclude poor people by requiring large lots or even large houses; the result has been a sad economic segregation of the American landscape. Similarly, the current union anti-big-box effort suffers from the same shortsightedness: It doesn't seek to stop construction of big boxes, but, rather, to prohibit those stores from engaging in one activity that union members have an interest in. It might make sense to try to unionize Wal-Mart employees or encourage communities to boycott big boxes that sell groceries. But seeking to block them at the planning counter is an activity that's probably doomed to failure.