Wednesday, September 10, 2008

Walmart & Walgreen's Breaking Through Walls

From my email today, Walmart is applying for a liquor license and Walgreens wants to sell smokes in San Fransisco:

Walgreen Fights Tobacco Ban

San Francisco Law
On Pharmacy Sales
Is Contested in Court

By ANN ZIMMERMAN
September 10, 2008; Page B8

Walgreen Co. has asked a San Francisco state court to block implementation of a recently passed city ordinance banning sales of tobacco products at pharmacies, set to take effect Oct. 1.

Associated Press

San Francisco's ordinance banning tobacco-product sales at pharmacies would affect 52 Walgreen pharmacies in the city.

In the legal challenge, filed in California Superior court, the Deerfield, Ill., drug-store chain alleges the new law is anticompetitive and unconstitutional, because it doesn't ban tobacco sales at grocery stores and wholesale clubs that also have pharmacies.

The court set a Sept. 30 hearing date for preliminary injunction. The ordinance would affect 52 Walgreen pharmacies in San Francisco.

In August, San Francisco became the first city in the country to ban cigarette sales at pharmacies. The law, introduced by San Francisco Mayor Gavin Newsom and modeled on similar bans in eight Canadian provinces, was approved by the city's board of supervisors in two consecutive 8-3 votes.

Mitch Katz, director of San Francisco's Public Health Department, told the board that pharmacies market themselves as places where people go to get healthy and it sends a conflicting message when they also sell cigarettes, a known health hazard. But dissenting board members questioned why certain retailers that sell prescription drugs were exempted from the ban.

San Francisco's tobacco sales ban is part of a broader effort among private and public health professionals to bar tobacco sales at both pharmacies and retailers with on-site health clinics. The Boston Public Health Commission last week gave its initial approval to ban tobacco products at pharmacies, including supermarkets that dispense prescription drugs. The law, which has the blessing of Boston Mayor Thomas Menino, would also ban cigarette sales on college campuses. After a 60-day period of public input, including a public hearing Oct. 8, the Boston Public Health Commission, which regulates tobacco sales in the city, will revisit the proposed ban.

Legislators in New York, Illinois, Rhode Island and Tennessee also have proposed tobacco-sale bans this year, though the efforts so far have stalled under opposition from retailers and the tobacco industry.

Antismoking activists had hoped the San Francisco ban would provide impetus for other cities and states to follow suit. Its supporters say the purpose is to help reduce smoking-related illnesses and premature death by making cigarettes and other tobacco products less accessible. By ratcheting up the social unacceptability of smoking, they hope to prevent young people from starting the smoking habit.

"This is about basic fairness, singling out drug stores and not other retailers with pharmacies," said Walgreen spokesman Michael Polzin of the company's suit.

Write to Ann Zimmerman at ann.zimmerman@wsj.com

Wal-Mart aims small in San Diego

By Jonathan Birchall in New York

Published: September 9 2008 23:11 | Last updated: September 9 2008 23:11

Wal-Mart is planning to open its new small-format Marketside grocery stores around San Diego in southern California as well as in Arizona, expanding its efforts to catch up with the rapid expansion of Tesco’s US Fresh & Easy chain.

The largest US retailer has applied for a liquor licence for a small Marketside store that is planned as part of a retail development in Oceanside, a coastal city north of San Diego. The location, still awaiting planning approval, will be just two miles from a recently opened Tesco Fresh & Easy store in the neighbouring city of Vista.

Planning documents, first reported in the local North County Times newspaper, show drawings of the proposed store with the logo prominently displayed.

Wal-Mart has also leased a 12,000 sq ft space in a new condominium development in downtown San Diego, in a rapidly gentrifying area adjacent to the city’s baseball stadium.

The retailer will open the first four of the new small stores in the suburbs around Phoenix, Arizona, in the coming weeks, again in communities targeted by Tesco’s 10,000 sq ft hard-discount Fresh & Easy format.

Tesco, meanwhile, is continuing the rapid roll-out of its network of US stores, opening its 75th store in southern California last week. It is pushing ahead with plans for stores in northern California, with several hundred planned in the state, as well as in Arizona and Nevada, supported by two distribution centres.

Wal-Mart continues to describe its Marketside format as a pilot, although it has indicated in job advertisements that if successful it could open more than 1,000 of the stores and create more than $10bn in sales.

Wal-Mart is starting to explore alternative growth strategies in the US as the growth of its network of highly profitable Supercenters starts to approach saturation point. But the small store format also presents new challenges to its union-led opponents, who have regularly used public planning processes required by large stores to slow the retailer’s plans in California, as well as in New York, Los Angeles and Chicago.

San Diego became a focus of this struggle two years ago, when the city council passed a bill that would have stopped the development of new Supercenter stores within the city limits. The mayor subsequently vetoed the bill.

Wal-Mart Watch, the anti-Wal-Mart campaign funded by the SEIU service workers union, warned supporters this month to be on the lookout for what it called new “stealth” Wal-Mart stores.

Sphere: Related Content