Explaining Southern California's economy

Walmart store in LA's Chinatown opening (poll)

Walmart Neighborhood Market

Seth Anderson|Flickr|Creative Commons

Wal-Mart announced it plans to open a new Walmart Neighborhood Market mid-August in downtown L.A.'s Chinatown neighborhood. (File photo: Walmart Neighborhood Market).

Wal-Mart will open a grocery store on the edge of downtown L.A.’s Chinatown this month, after defeating several challenges by activists who opposed the project.

The 33,000-square-foot store will sell groceries and household supplies. It is one of Wal-Mart's Neighborhood Market stores, which do not sell items like electronics or clothing.

Wal-Mart is among several national chains that have opened up stores in downtown L.A. recently. The Walmart store is located on W. Cesar E. Chavez, about two miles away from a City Target. Whole Foods plans to open a store on Grand Avenue in 2015.

“The population has increased, the demographics have gotten better, so this is now a neighborhood of interest to the national retailers,” said Jenny Schuetz, an assistant professor at USC’s Price School of Public Policy.

Schuetz said the national chains could put pricing pressure on the Ralph’s, the longtime downtown grocery store located near the Staples Center. At the very least, consumers will have a much wider range of groceries to choose from, Schuetz said. Downtown L.A.’s population has grown to 50,266 people, according to estimates from the U.S. Census Bureau.

“For consumers, if there are more stores vying for their attention, the consumers do better,” Schuetz said.

Wal-Mart said there is a need for a grocery store on the edge of Chinatown.

“Local residents in Echo Park, Downtown, Bunker Hill and Chinatown have been waiting for more than two decades to bring a full-service grocery to this part of Los Angeles,” said Wal-Mart in a statement.

But some community activists like King Cheung are concerned the store will take away sales from nearby small businesses. Cheung is a volunteer for Chinatown Community for Equitable Development, a group opposed to the new Walmart store.

“Wal-Mart is such a huge company and all the Chinatown stores … are mom and pop kind of stores. So, it’s very hard to compete with Wal-Mart,” Cheung said.

Other groups have made legal challenges against the project, but those efforts weren't successful.

Wal-Mart said the Downtown L.A. store has attracted other businesses to open in the area.

The retailer also said small businesses that are near its Neighborhood Markets in Southern California tend to offer services that it doesn’t sell like dry cleaning or pets.

But Cheung said he believes the Chinatown grocery stores will be hurt by the Walmart store's presence, even if they don’t sell the exact same items. For example, a customer may substitute won ton noodles for spaghetti noodles if they are shopping in Chinatown, but when the Walmart opens, they may just go to the Walmart to buy spaghetti noodles, resulting in a lost sale for the Chinatown mom and pop grocery store, he said.

Wal-Mart hasn’t said when the downtown L.A. store’s grand opening will take place, other than sometime this month. Cheung said his group plans to voice their concerns at the opening, which may include picketing the event.

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