Ever sensitive about its image, Wal-Mart has released a study that says its megasized Supercenters have positive economic impacts on their California communities.
The study, conducted by Davis economic consultant Lon Hatamiya, said California cities with Supercenters generate higher taxable sales and new retail business permits than those without them.
Hatamiya’s study drew a sharp response from the United Food and Commercial Workers, which has been unable to organize Wal-Mart employees.
“It’s no surprise a study commissioned by Wal-Mart would reach conclusions favorable to Wal-Mart,” said Jacques Loveall, president of UFCW Local 8 in Roseville, in a prepared statement. “Independent studies have done a thorough and convincing job of establishing Wal-Mart’s disastrous effects on local economies.”
Hatamiya said in an interview Monday that the study refutes the notion promoted by Wal-Mart’s critics that its stores essentially destroy downtowns and run competitors out of business.
“There may be businesses that are affected,” he said. But a Supercenter will have a positive economic impact, he said.
“It acts as a magnet and attracts other businesses,” said Hatamiya, who served as secretary of the California Technology, Trade and Commerce Agency under former Gov. Gray Davis.
In a little more than a decade, the giant Arkansas retailer has opened 105 California Supercenters, which combine traditional Wal-Mart merchandise with full-sized grocery stores.
The big stores have intensified the political controversy over Wal-Mart’s expansion. Along with its grocery-only stores, Wal-Mart has reshaped the grocery business, grabbing significant market share from unionized companies in California such as Raley’s, Safeway and Save Mart. The UFCW, which represents workers at those three chains, has tried without much success to slow Wal-Mart’s growth. The union has also been unable to organize any of the company’s stores.
Some analysts have also said Wal-Mart is responsible for harming downtowns because of the Supercenters’ considerable drawing power.
“The sales are transferred out to the big box on the edge of town,” said Bob Reynolds, a supermarket industry consultant in Moraga. Reynolds hadn’t yet seen Hatamiya’s study.
Hatamiya said Wal-Mart hired him to analyze those claims.
“They wanted to know what actually happened in the community,” he said. “They had these naysayers out there saying you had all these businesses going out of business.”
Hatamiya examined growth in taxable sales and retail permits in six California cities with Supercenters: Dixon, Yuba City, Modesto, Lancaster, Rosemead and La Quinta. He also looked at the same figures for six cities without Supercenters: Vallejo, Alameda, Hollister, El Monte, Whittier and Lawndale. His conclusion: Supercenters create “more robust sales tax revenues for cash-strapped California communities with the added benefit of more jobs and small businesses.”
The study, completed in late January, is the third Hatamiya has conducted for Wal-Mart.
Kim Sentovich, senior vice president in Wal-Mart’s Pacific regional division, said in a prepared statement that the study shows “California communities win with Wal-Mart, particularly in regions of the state that have fewer economic opportunities.”
Call The Bee’s Dale Kasler, (916) 321-1066. Follow him on Twitter @dakasler.