Posted by: Lisa Pampuch | October 16, 2007

Stifling a big retail yawn

With their decision to open a “mini” Supercenter in Morgan Hill, Wal-Mart officials have managed to irk people at both ends of South County.

Wal-Mart officials announced recently that they’ll open a fully stocked grocery store in the 80,000-square-foot space in Cochrane Plaza that Target vacated earlier this year. It will also offer non-grocery discount goods. The Wal-Mart Supercenter in Gilroy measures 220,000 square feet.

Gilroy officials are upset that Morgan Hill residents won’t need to drive to Gilroy to visit a Wal-Mart – and thus, likely won’t be in the area as often to spend more money at the many retailers lining Pacheco Pass and Leavesley Road.

Here’s what Gilroy Mayor Al Pinheiro had to say: “It doesn’t make me happy. When we approved the Wal-Mart, we didn’t expect them to open a Wal-Mart up there.”

Many Morgan Hill residents – who were pining for an upscale grocery store like Whole Foods or, as one Morgan Hill resident described them, “other Italian name stores” like Andronico’s, Lunardi’s or Cosentino’s – are disappointed to learn that giant discounter Wal-Mart is opening instead.

As another Morgan Hill resident said to me, “Wal-Mart’s ‘organic’ isn’t like Whole Foods’ ‘organic.’”

A Business Week article from March 29, 2006, reported that many in the organic farming community share those worries.

Business Week reporter Pallavi Gogoi wrote of fears “that companies like Wal-Mart could try to lower the standards for what is classified as organic food and begin to import more supplies from China and other overseas markets. ‘Wal-Mart already sources a majority of its products from China, because it’s so cheap to produce anything there. Why not foods?’ asks Ronnie Cummins, director of the Organic Consumers Assn., a nonprofit organization that promotes natural and organic food.”

Reading that reminded me of a Gilroy Dispatch article few years ago in which Bill Christopher of Christopher Ranch described Chinese garlic as being grown in “night soil.”

“California garlic is consistent and grown with the highest safety standards,” Christopher said. “Chinese garlic is grown in what they call ‘night soil,’ mixed with human waste water. And who knows what else they’re spraying on it.”

Quality isn’t the only concern, according to Gogoi, who reported that Richard DeWilde, a South Dakota-based organic farmer, “fears that the company will use its market strength to drive down prices and hurt U.S. farmers. ‘Wal-Mart has the reputation of beating up on its suppliers,’ says DeWilde. ‘I certainly don’t see ‘selling at a lower price’ as an opportunity.’”

I’m disappointed by the Wal-Mart news mostly because the store is another South County repeat, like the Home Depot that took the former K-Mart spot. Denny’s and In-N-Out Burger are recent Morgan Hill additions that duplicate Gilroy offerings. Morgan Hill will soon have a Chili’s and a Staples in the new Target center. Both are already available in Gilroy.

Of course, not everyone in Morgan Hill is unhappy. Mayor Steve Tate is glad that the Target store won’t remain empty for long.

“We had a long spell in Morgan Hill where one of our shopping centers had a lot of empty stores after some of the bigger stores moved out,” he told reporter Cody McDevitt. “And that’s not good.”

I’m guessing that tenants of Cochrane Plaza are very glad to hear that Wal-Mart will be their new neighbor.

And my colleagues on the Morgan Hill Times editorial board seemed to be thrilled, using words like “fantastic” and “couldn’t be better” in a recent editorial welcoming Wal-Mart to Morgan Hill. I wonder if the store really “will be a tremendous sales tax generator” as they predict, because most groceries aren’t subject to sales tax. My colleagues’ predictions of sufficient parking and no traffic gridlock also strike me as premature.

I understand that the city can’t force any retailers to come to town, even businesses that Morgan Hill residents frequently mention as highly desirable, like Fry’s Electronics or Whole Foods. I suspect that these retailers don’t believe that Morgan Hill or South County meet their demographic/rooftop requirements.

The city also can’t keep away businesses, like Wal-Mart or Home Depot, that fit the zoning regulations for a particular location.

Clearly, the issue is figuring out how to convince higher-end retailers to take a chance on South County in general and Morgan Hill in particular. I’m not sure how to do that. But I certainly hope that folks at the Chamber of Commerce and City Hall are trying.



  1. […] please, powers that be, heed my usual plea: Don’t duplicate a retailer that’s already in South County. Please. Possibly related […]

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