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The Honolulu Advertiser
Posted on: Tuesday, April 11, 2006

Wal-Mart's plans for Kapolei concern supermarket union

By Andrew Gomes
Advertiser Staff Writer

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WHAT MAKES A SUPER WAL-MART

Wal-Mart 'Supercenter'

Merchandise: includes full line of grocery items, including meat, produce, deli, bakery, dairy, frozen foods and dry groceries.

Average size: 187,000 square feet

Average item count: 116,000

Number open: 1,980*

Number planned to open this year: 270 to 280

Traditional Wal-Mart

Merchandise: typically includes limited dry groceries, though Hawai'i stores feature more perishables such as milk, eggs, butter and juice plus big assortments of frozen and canned foods, beer and wine, and popular ethnic specialties from kim chee to lau lau to miso paste.

Average size: 102,000 square feet

Average item count: 62,500

Number open: 1,209*

Number planned to open this year: 20 to 30

*as of Jan. 31

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Wal-Mart is trying to finalize plans for a Kapolei store that is likely to raise traffic concerns and has led the union representing many local grocery store workers to rally opposition against what it suspects will be Hawai'i's first Wal-Mart store with a full-line supermarket.

The world's largest retailer yesterday confirmed that it's looking at developing a store in Kapolei, but said options need to be settled before it can disclose a site or say if the store is envisioned to be a traditional format or a "Supercenter" that features a full grocery selection. Supercenters are the company's preferred new store type.

"At this point, we don't have any concrete options that we can talk about," said Wal-Mart spokesman Kevin McCall. "We don't have everything nailed down."

Previously, Wal-Mart through a developer had explored a 25-acre site in Kapolei owned by the Campbell Estate across from Kapolei Shopping Center next to the H-1 Freeway, according to several people familiar with the effort at the time in late 2004.

The Campbell Estate recently reached an agreement to sell the parcel to a developer, according to estate spokeswoman Theresia McMurdo, who said she was not at liberty to identify the buyer.

McMurdo referred comment to a representative for the developer, Jon-Eric Greene, a broker with local real-estate firm Colliers Monroe Friedlander.

Greene, who has helped represent Wal-Mart in land acquisitions for its Ke'eaumoku and Pearl City stores, said he could not say who is buying the Kapolei property or what the buyer plans to develop.

EXPANSION STRATEGY

Local real-estate industry leaders said they expect Wal-Mart will open a store on the site in the burgeoning community, which is designed to be O'ahu's second urban center and already has a Home Depot, a Big Kmart and could soon welcome Costco Wholesale and a regional shopping mall to serve a rapidly growing residential population.

But whether Wal-Mart intends to build a Supercenter there is less clear.

Supercenters have been the focus of Wal-Mart's aggressive expansion strategy in recent years, and since 2004 have been the predominant type of store the company operates.

Wal-Mart opened its first Supercenter in 1988. From 2001 to 2005, the number of Supercenters nearly doubled to 1,980, while the number of traditional Wal-Mart stores dropped by about 400 to 1,209, according to the company's most recent annual report.

Wal-Mart has grown its Supercenter business by opening new stores and converting older traditional stores. This year, the company projects opening 270 to 280 more Supercenters, including new and converted stores, compared with 20 to 30 traditional stores.

Hawai'i is only one of three states without the larger-format stores that average about 85,000 more square feet of space and about 53,500 more items than the smaller variety stores familiar to local shoppers. (Alaska and Virginia also do not have Supercenters.)

The United Food & Commercial Workers Union, Local 480, fears Kapolei will be the location of the first of several Supercenters in Hawai'i, and recently began a campaign to organize opposition targeting the store format.

The union, which represents about 2,300 workers at Safeway, Foodland and Star Markets, earlier this month began sending elected officials letters and DVD copies of the anti-Wal-Mart movie, "The High Cost of Low Price," warning about potential impacts Supercenters would have in Hawai'i.

Patrick Loo, Local 480 president, said the material sent to all county mayors and council members is part of an educational outreach to inform government leaders.

"We here in Hawai'i do not yet have a Supercenter," the letter reads. "However, before they take over is the time to take a look at what impacts these types of stores might have on our Islands."

UNION BATTLES

On the Mainland, the UFCW has waged vigorous battles against Wal-Mart over the contention that Wal-Mart's retail domination is detrimental to other businesses, especially supermarkets that in some markets have cut worker benefits or closed in the face of competition from Wal-Mart.

Wal-Mart has said its jobs in Hawai'i are good-paying jobs that last year averaged $10.58 an hour for full-time hourly employees, and that small businesses around its most urban store on Ke'eaumoku Street have benefited by increased consumer traffic and free parking.

"As a company, we believe that competition is a positive thing," McCall said. "Competition brings better service and better prices to the community."

The retailer also has criticized the movie that criticizes the company, calling the film released last November "an error-ridden propaganda video."

Hawai'i hosted a few screenings of the film last year at small venues such as Chinatown night spot NextDoor but has not drawn a large-scale effort to block new Wal-Mart stores from development.

After Wal-Mart disclosed plans for its Ke'eaumoku store to be topped by a Sam's Club, some area residents were joined by union consultants who at neighborhood meetings said that Wal-Mart's plan violated zoning laws, underestimated traffic impacts and would drive out competition.

The Ke'eaumoku store opened in October 2004 with little negative fanfare, becoming Wal-Mart's sixth store in the state. A seventh store opened in January in Pearl City.

'REALLY BAD LOCATION'

If Wal-Mart does open a Kapolei store, it would greatly add to the retail shopping selection in the burgeoning "second city," but also would likely raise concerns about traffic congestion and competition for small retailers.

Before Big Kmart opened its Kapolei store in 2000, Kapolei Shopping Center merchants and community leaders criticized the Campbell Estate for the deal, arguing that the discounter would hurt small businesses as far away as Wai'anae. Big Kmart is a larger version of Kmart but doesn't include a full selection of groceries.

Wal-Mart is expected to draw similar if not more concern because of its greater dominance and likely location fronting one of the community's most congested intersections at Fort Barrett Road and Farrington Highway.

"I think we have concerns because it's a really bad location," said Maeda Timson, chairwoman of the Makakilo/Kapolei/Honokai Hale Neighborhood Board. "If it's a Supercenter, we're concerned what's going to happen to our longtime business owners. We don't want to find out that one store blows all the competition out of the water and leaves us with one store.

"We're not closing the door on (Wal-Mart)," Timson said. "These are the things that concern us."

Wal-Mart also would bring Kapolei a step closer to being recognized as a full-fledged city able to satisfy most needs of area residents, and help reduce the need to leave Kapolei to work and shop.

"We believe the area has a lot of growth a lot of opportunities for us," McCall said. "We can serve our customers well by being in that market."

Reach Andrew Gomes at agomes@honoluluadvertiser.com.