WSJ: Giant Supermarkets Funded Group Trying to Stop PA. Walmart

[JPZenger]

http://www.pennlive.com/midstate/index.ssf/2010/06/north_cornwall_twp_officials_s.html

Article in Harrisburg Patriot-News describing how the Wall St. Journal uncovered a story that Giant Supermarkets secretly funded the opposition of a citizens group against a proposed Walmart outside of Lebanon PA.

This is by no means the first time that Giant has secretly used a citizens group to stop a competitor - they did it against a proposed Weis supermarket outside of Easton PA. In that project, the new Weis was held up for 3 years after the Township approved it, because of weak court challenges that were all eventually dismissed.

The Walmart was held up for years by multiple legal challenges, some of which were frivolous.

[JPZenger]

1. Here's the Wall St Journal Article

This front group was actually hired to oppose 53 Walmarts in PA.

http://online.wsj.com/article/SB10001424052748704875604575280414218878150.html?KEYWORDS=%22north+cornwall%22

Excerpts:

"In Pennsylvania, Saint's work roster in August 2007 listed 53 projects, almost all directed at stopping Wal-Mart on behalf of client Giant Food Stores, owned by Amsterdam-based supermarket company Ahold. Saint documents from 2007 say it had lost one battle in Pennsylvania, defeated 13 projects and delayed the remaining ones from four months to four years. In 2005, Giant Foods hired Saint to stop a proposed Wal-Mart in North Cornwall Twp., Pa. Saint planned to charge Giant $7,500 to $10,000 a month for legal services, mailings, phone banks and 60 hours a month of Saint staff time, according to a preliminary budget.

...Before construction began, with support from Saint, the opponents filed suit, claiming that when the land was rezoned for commercial use three years earlier, neighbors had not been properly notified. One member of the citizens group, Kip Kelly, says a woman he assumed was from a labor group or anti-Wal-Mart coalition had offered to fund the effort. Former Saint employees say the woman was a Saint operative and that Giant was paying the group's legal bills through Saint...

As the suit dragged on, Giant abruptly changed its game plan... Giant had decided it wanted to erect a supermarket directly across from the Wal-Mart location, according to former Saint workers and Saint documents. Giant needed Saint to switch sides in the political battle over commercial zoning, the former employees say.

Saint workers were directed to withdraw support for the anti-Wal-Mart group, called Citizens for Responsible Growth, according to the former Saint workers. "We had to kill a community group we started, and I was told to stop paying the attorney," says a former Saint employee."

[MH1]

2. Good for them, except that it is anti-competition

rather than all the other reasons to oppose WalMart.

Hmmm, a new Giant is about to open near me. And now we hear WalMart is trying to build in another nearby location. I am very much against the Walmart so I hope Giant takes up the cause and is successful. Even if they are just protecting their turf, I don't care ... Giant is a helluva better store.

[creeksneakers2]

3. Walmart beats Giant prices most of the time.

[PRETZEL]

4. Giant isn't by any means the only one,

Weiss was also mentioned.

Genuardi's made sure that when the Walmart's in their market area were being built that they couldn't open any grocery related stores for a 5 year period.

No sooned than that non-compete clause was over, one of the affected Walmart's did a complete makeover, doubled their size and added the grocery part. They've pretty much sealed the fate of Genuardi's (and to a good extent the Giant in that area also) to the point where these 2-3 stores will probably close soon.

[JPZenger]

5. Walmart and supermarkets let buildings sit empty to avoid competition

When they build a bigger store, down the street, Walmart in the past has let the old building sit empty rather than lease them to a competitor. They often end up with Tractor Supply stores, which Walmart does not consider to be competition.

Many supermarkets also refuse to let their old stores be leased to a competitor. That is why some old Giants, for example, sit empty when Giant opens a new store down the road.