Chinatown Small Businesses Face Uncertain Future Over Wal-Mart
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Tourists visit Chinatown during 2012 Lunar Chinese New Year. (Photo by Gracie Zheng)
Michael Lo, 50, owner of the 400-square-foot convenience store says good fortune is less likely if Wal-Mart opens a grocery store two blocks away.
“I don’t know what to do. I just want to keep my customers,” he said.
The 33,000-square-foot grocery store, also known as a Neighborhood Market, is about one-fifth the size of a Wal-Mart supercenter. It will be located on the ground floor of a senior citizen center at Grand Avenue and Cesar Chavez Avenue in Chinatown.
Construction is set to begin in the summer and will be open to the public in early 2013. The store will create up to 65 jobs, most of which are full-time, according to Rachel Wall, senior manager of community affairs from Wal-Mart
This is going to be the company's first Neighborhood Market in Los Angeles County. It doesn’t need council approval because it's going into an existing retail space.
The proposed store has received mixed reactions from different community groups and labor unions in Los Angeles.
“The time has long passed when somebody from outside our community can come to Chinatown and tell us what’s good for Chinatown,” said George Yu, executive director of Chinatown Business Improvement District.
Los Angeles Alliance for a New Economy (LAANE), an advocacy group that has been at odds with Wal-Mart for years, accused the company of having a track record of providing poverty wages and a lack of health benefits for its employees.
“We’ve seen them destroy small businesses, lower job standards in their grocery stores, in their warehouses and even in their manufacturing,” said James Elmendorf, deputy director of the advocacy group.
All the businesses in Chinatown are family-run. There are no chain stores. Wal-Mart’s Neighborhood Market is going to be the first mainstream store in this community.
“We see those stores threatened," Elmendorf said. "They can close very easily."
He said Wal-Mart planned to open a small-format grocery store to get around an existing LA City superstore ordinance.
Wall retorted, “I don’t see that correlation.”
She said the Neighborhood Market format has been around for almost 15 years, well before the big box ordinance in LA existed.
LA’s superstore ordinance was enacted after Wal-Mart failed to open a superstore in the city of Inglewood in 2004, which requires superstores - also known as big boxes of over 100,000 square feet - to complete a cost and benefit analysis before seeking approval, giving community members and elected officials more control over such development projects.
LA City Council attempted to ban Wal-Mart’s Chinatown store but failed. Councilmembers voted unanimously on March 23 to approve Councilman Ed Reyes’ motion to block chain retail stores in Chinatown, but the vote came after Wal-Mart had obtained permits needed to start construction at the vacant space a day earlier, reported the Los Angeles Times.
Following the failed attempt of City Council, LAANE along with some Chinatown small businesses and residents filed an appeal with LA's Department of Building and Safety to review Wal-Mart's permits. This process could take a few months and could end up with another City Council vote, acccording to Frying Pan News.
Smaller Family-Run Stores In Chinatown Are Worried
Lo’s small store is filled with more than 1,000 items, all 99 cents and up, ranging from hats, cleaners and hairpins to typical Chinese arts and crafts like bamboo curtains, paper lanterns and colored ceramic Buddha.
The narrow rectangular room is divided by a rack at the center, leaving one aisle on each side, which allows only one person to pass each time.
“We’re struggling to make a profit,” Lo said. “We can survive, pay the rent. We don’t have much extra money after we pay all the expenses.”
Lo, a Chinese immigrant, started this family business with his wife in July 2011 after quitting his job at an accounting firm. He travels from Baldwin Park to Chinatown every day to look after his store.
Lo said business in Chinatown is already slow and he is worried his business will fall off even more if Wal-Mart opens.
“Many people [will] go to Wal-Mart because of the good price,” Lo said.
December and January were the best time for Lo’s business. When Christmas and Chinese New Year were over, his business began to drop. He said his business usually depends on people living in Chinatown Monday through Friday and more on tourists from outside on weekends.
Nobody knows the exact number of family-run stores in Chinatown. Based on estimates of Chester Chong, president of the Chinese Chamber of Commerce of Los Angeles, Chinatown has about 400 small businesses, of which restaurants make the largest portion.
Wing Hop Fung, a 27-year-old two-story store next to Lo’s, is one of the largest stores in Chinatown. It sells daily necessities as well as Ginseng, Chinese herbs, fine wines and tea.
Hoa Ong, manager of Wing Hop Fung is confident that Wal-Mart will not hurt their business.
“Right now we need more traffic, more people to come to Chinatown,” Ong said. “When they come to Wal-Mart, they can come to our store and shop at the same time. It’s good for us.”
Limited parking in Chinatown keeps many except the most hard-core tourists from visiting Chinatown, Ong said. He sees Wal-Mart attracting more people to Chinatown.
Customers frequent this store not only for household items but also for more expensive delicacies such as Japanese tea at $118 per pound and dried shark fin at $238 per pound.
Experts say it’s hard to know at this point how Wal-Mart would affect small businesses in Chinatown. The obvious concern is that a big business would have lower prices.
Michael Chasalow, director of USC Small Business Clinic, said that Wal-Mart might bring in many more customers into the area who then would go to the small stores in Chinatown.
“It’s possible that even though they might have some decrease in business from their regular customers, they would have an increase in business because there will be more people there,” he said.
Chasalow also mentioned a similar example that when The Grove moved next to Farmers Market, the business owners in Farmers Market were concerned that all the customers would go to The Grove. It turned out The Grove helped the small businesses at Farmers Market.
Whether the small businesses in Chinatown would lose their businesses depends on why the customers are going shopping, said Chasalow.
“If I’m going to buy a typical item, they might lose their business because those customers might go straight to Wal-Mart if the price is cheaper. If I’m spending a lot of money, I might be willing to go to the specialty store and then to Wal-Mart.”
As for the concerns of small business owners that Wal-Mart would hurt their businesses, Chasalow said, “It only hurts businesses if the number of customers stays the same.”
Wal-Mart’s Chinatown Project Decried By Pro-Labor Groups
Workers from OURWalmart, an organization made up of current and former Wal-Mart employees advocating for better wages and working conditions, joined the campaign against Wal-Mart’s store in Chinatown.
Angie Rodriguez, 63, a full-time associate at Wal-Mart in Baldwin Park, makes $11.21 per hour as an overnight stocker.
“I am lucky enough to get paid full-time hours which is 40 hours,” she said. “A lot of my co-employees are part-time. They get paid less than me. I wonder how they pay their rent. I wonder how they feed their children. I wonder how they pay their cars.”
Rodriguez has been working at Wal-Mart for eight years, and makes $1,358 per month. She is struggling to make ends meet.
“You buy the cheapest food. You buy something that’s on sale,” she said.
Rodriguez said she wouldn’t quit working at Wal-Mart because she has a mission - to tell the world, “Wal-Mart is not treating its employees right.”
According to IBISWorld, an independent market research group, the average hourly wage of a Wal-Mart sales associate is $8.81.
“I can only respond with the facts, the average wage in the state of California is $12.74 an hour for our hourly associates, and that does not include management,” Wall said.
Victor Chavez, 43, an organizer from UFCW and member of OURWalmart, quit his job at Wal-Mart after working five years in the electronics department. His last position was an overnight support manager following a department manager.
“It wasn’t worth the headache,” he said. “The pay wasn’t worth the work I was put on.”
He said at the end of his career he earned $9.40 per hour.
Chavez doesn’t support Wal-Mart’s new store in Chinatown saying it would devastate other jobs in the community.
“Wal-Mart has a lot of problems in their stores now. They need to address those problems before they open up new stores and create more problems for the community and workers,” he said.
Chavez pointed to the south side of the Wal-Mart supercenter in Baldwin Park, and said, “There were once thriving businesses, but now they’re empty buildings.”
Chinatown Business Groups Support Wal-Mart’s Proposed Store
While advocacy organizations outside Chinatown are fighting against this big corporation, two major business groups in Chinatown show support for Wal-Mart’s grocery store.
“We’re echoing the sentiments of our residents. Chinatown community deserves a mainstream supermarket,” Yu said.
The site where Wal-Mart will be located has been vacant since it was built in 1991, according to Yu.
He also said that since 99 Ranch, a Chinese chain grocery store, was closed in Bamboo Plaza around 2005, there hasn’t been a large grocery in Chinatown. He remembered the excitement of the local residents when Rio Ranch Market, a Hispanic grocery retailer, made a presentation in a community meeting at the end of 2010 proposing to come to the same existing space in Chinatown.
When Rio Ranch Market pulled out in August 2011, they found out Wal-Mart was contemplating a market in that space, Yu said.
Chester Chong, president of non-profit Chinese Chamber of Commerce, also supports Wal-Mart’s Chinatown store, calling it a “win-win situation”. Chong said Wal-Mart is not going to hurt the small business because they sell different products.
“People may go to Wal-Mart to buy something family grocery stores don’t have,” Chong said. “But the local family stores sell very traditional or local stuff.”
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Reach staff reporter Gracie Zheng here.
