Wal-Mart Files Challenge to
Alameda County's Ban on Supercenters

Wal-Mart Press Release 26jan04

Controversial Ordinance Is Anti-Competitive and Anti-Consumer; Petition Requests That Ordinance Be Deemed Invalid

BENTONVILLE, Ark., Jan. 26 /PRNewswire/ -- Wal-Mart Stores, Inc. (NYSE: WMT - News) filed a petition today with the Superior Court of California, challenging Alameda County and the County Board of Supervisor's adoption of the "Large Scale Retail Ordinance" (Ordinance #2004-41). The ordinance prohibits retailers with total sales floor area in excess of 100,000 square feet from devoting more than 10% of the sales floor area to non-taxable merchandise, such as groceries and prescription drugs. Membership stores are exempt from the ordinance. The Alameda County Board of Supervisors passed the controversial ordinance earlier this month in an effort to prohibit Wal-Mart from selling low priced general merchandise and groceries conveniently under one roof.

"This ordinance is anti-competitive and anti-consumer, and the consumers of Alameda -- our customers -- deserve the right to choose where they are allowed to shop," stated Amy Hill, Wal-Mart Stores, Inc. spokesperson. "Wal- Mart believes in choice. It is a value that we believe most consumers embrace. Some may not choose to shop at our stores, but neither do most want a Board of Supervisors, union representatives or competitors to tell them they cannot."

Hill is referring to statements made by Supervisor Alice Lai-Bitker, who stated at the first reading of the ordinance that she "has been working with Richard Benson from UFCW (United Food and Commercial Workers) Local 870 and David Bowlby from Safeway Store for a little over five months."

The petition contains three causes of action: The first cause of action is failure by the county to comply with CEQA (California Environmental Quality Act) in passing this ordinance. The purpose of CEQA is to ensure that all environmental consequences of a proposed action are disclosed and assessed. Without information as to the possible environmental consequences of their action, the Board of Supervisors could not, and did not, make an informed decision, nor was the public adequately informed. The second cause of action asserts that the County has exceeded its authority by enacting a law that imposes unusual and unnecessary restrictions on lawful business enterprises. Finally, the third cause of action asserts that the County failed to follow proper state law mandated procedures in enacting this ordinance. The petition requests the ordinance not be enacted and be deemed invalid.

"We regret that we must take this legal action, but we believe it is wrong for the Board of Supervisors to limit consumer choice by denying county residents the opportunity to pay lower prices fostered by competition," Hill said. "A recent study by UBS Warburg found that grocery prices are 17-39 percent lower than competitors. This is money that customers could save and use on other purchases in the area."

The average Wal-Mart Supercenter collects approximately $4.5 million in sales tax revenue each year and brings 400-500 jobs to the community, three- fourths of which are full-time positions. Further, Wal-Mart Stores, Inc. contributes more than $140 million annually to local community organizations. Customers and associates raise an additional $70 million at stores and clubs that benefit local communities. Wal-Mart operates more than 1,500 Supercenters across the country. The first Supercenter in California will open in March in La Quinta.