Wal-Mart lost in California Supreme Court - communities can stop big box stores

In an important decision, the California Supreme Court ruled on Wednesday that cities and counties can forbid the construction of big box stores (hypermarkets). In April, an appeals court in Fresno, California had already declared that a 2004 ordinance by Turlock (Stanislaus County) in San Joaquin Valley was legal.

In its April 5th ruling, the Fresno court said that the local authority has the right to set restrictions in public interest. This is a major blow against Wal-Mart's arrogant attitude to communities and their democratic decision making:

- While zoning ordinances may not legitimately be used to control economic competition, they may be used to address the urban/suburban decay, the court said according to Thursday's San Francisco Chronicle.

The ordinance stops retailers from having stores larger than 100,000 square feet, where more than 5 per cent of the floor space is used for groceries.

Wal-Mart has now lost its third appeal against the ordinance, which was supported by civic groups and trade unions. Already in December last year, a court in Modesto ruled against the Bentonville multinational.

Important precedent in US and abroad

The California Supreme Court ruling could have important effects on the retail giant's future expansion. In California itself, as well as across the United States, an important precedent has clearly been created. This may already have affected Wal-Mart's share prices, which fell almost one dollar on Wednesday, to USD 45.15.

One can also expect that the United States government takes a careful look at the California Supreme Court decision in the context of its approach to the World Trade Organisation negotiations on services. It should be clear that also abroad, countries and communities have the right to protect the public interest against the destructive influence of the Bentonville giant and its social dumping.

Indiscriminate de-regulation with the aim to open the door for Wal-Mart and walmartization does not promote the emergence of a stable global economy, if someone now thought so. Instead it could spark strong resistance also against those aspects of globalisation that really make sense.