Explaining Southern California's economy

How Chinatown could keep Wal-Mart from expanding in California

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Wal-Mart is the largest private employer in the U.S. It has its critics. It's expanding in California. And it want to bring a smaller store to L.A.'s Chinatown. But opposition is mounting.

One of the most famous movies ever made about Los Angeles is Roman Polanski's "Chinatown." In that 1974 film, starring Jack Nicholson and Faye Dunaway, "Chinatown" is 1930s police shorthand for cynicism: a place where everything is so complex that it's better to do nothing.

Discount retailing giant Wal-Mart is currently going through it's own Chinatown moment. Today, a protest by labor leaders and U.S. Congresswoman Judy Chu will take place in the neighborhood. The reason? Wal-Mart wants to bring in a Neighborhood Market — a smaller-box concept that the big-box retailer introduced in the late 1990s and has established as a middle tier, between its well-known Super Centers and it's recently developed Express Stores.

You might think of Wal-Mart as a place where you can buy everything from snow tires to computers to very large quantities of frozen everything, but that's not what the pretty unimaginatively named Neighborhood Market is all about. A good analogy in the SoCal grocery space would be British retailer Tesco's Fresh & Easy stores, which offer a broad variety of everyday goods in a no-nonsense, relatively discounted shopping environment where customers handle their own checkout and bagging.

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Amazon is spending how much to fight a California sales tax?!?!

Over the weekend, the New York Times ran a story about Amazon's brisk spending on a 2012 referendum that would ask voters whether the state should be able to require the online retailer to collect sales tax. We're talking $5.25 million -- and as the NYT reports, we're more than nine months away from the actual vote.

The argument on the pro-tax side is that enforcing collection will bring in $200 million in revenue California "has already counted toward balancing the state budget." Obviously, down the road there's quite a bit more moolah at stake than that.

On the Amazon side, the argument has been framed in terms of jobs, but it's really about cash: Amazon figures it will do pretty well in California if it can sell people all manner of stuff for less than they can buy it from outfits that force them to pay the tax. Just for the record, the taxing part would occur at online checkout. Heretofore, it's been the responsibility of Amazon's California customers to pay the sales tax themselves -- and as you can imagine, that's a difficult responsibility for the state to enforce.

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