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Wal-Mart will not challenge for D.C. grocer supremacy with living wage bill in place

Monday - 7/8/2013, 1:03pm  ET

Wal-Mart Stores Inc. has repeatedly warned of devastating broad economic effects from the District’s living wage bill for large retailers, but it has not said what the legislation will mean, specifically, for Wal-Mart’s plans.

And it won’t, Wal-Mart spokesman Steven Restivo told me Thursday, “until we know for sure” if the Large Retailer Accountability Act is adopted. The bill would require retailers with at least 75,000 square feet, whose parent companies gross at least $1 billion annually, to pay their employees $12.50 an hour.

Restivo hints that Wal-Mart’s D.C. strategy is in flux if the legislation, which earned initial approval Wednesday from the D.C. Council, becomes law.

Maybe it scales back. Maybe it opens its six planned stores and stops there. Maybe it builds 74,999-square-foot stores to avoid the law.

That would certainly please Wal-Mart’s vocal critics, but plenty of people in the District are eagerly awaiting the arrival of the world’s largest retailer.

“We don’t set arbitrary ceilings on store growth in a given market,” Restivo wrote in an email. “With Walmart store formats ranging in size from 15,000 to 150,000 sq. ft., we’re always evaluating potential sites.”

To Wal-Mart's dismay, the bill exempts stores subject to collective bargaining agreements, including Giant Food LLC and Safeway Inc. — D.C.'s top two supermarket chains. The pair will hold their positions, Restivo wrote, “as long as the DC Council keeps those two large retailers inexplicably exempt from the discriminatory Large Retailer Accountability Act.”

Could Wal-Mart (NYSE: WMT) overtake Giant Food and Safeway? It’s Wal-Mart — of course it could. But with the living wage bill in place, it may not even try.

“That’s unfortunate news for residents who want to decide for themselves where to shop for groceries, especially those who live in underserved areas of the city,” Restivo wrote.

Councilman Tommy Wells, D-Ward 6, said as much in a statement issued late Wednesday.

“The Large Retailer Act has negative impacts and direct consequences for some of the poorest areas of our city,” said Wells, one of three declared candidates for mayor. “The act creates a barrier to getting large grocery stores, other retailers and job creators to locate east of the river, in the communities of our city with the greatest need.”

© 2013 American City Business Journals, Inc.