California Supreme Court says cities can ban Wal-Mart stores


In a not-so-surprising move by the California State Supreme Court, the court has said that cities and towns have every right to set up ordinances to block big-box stores from being built in California communities that want to keep the megastores out of their collective backyards. This court decision stems from the recent Turlock situation -- those folks were successful in not allowing Wal-Mart to set up shop in their neighborhood.

So, with the Appeals Court in Fresno setting a statewide precedent, that court recently said local governments can enact such big-box restrictions to prevent the collapse of local businesses and resulting urban blight. Hence, communities can enact ordinances that effectively band large megastores for this very reason.

Wal-Mart just can't seem to find a pinch of luck in entering the California market in a large way at all. The communities, citizens and courts there seem to be sending a very strong message to Wal-Mart and other megastores like SuperTarget -- they do not want large, big-box retailers there at all -- regardless of "lower prices" or enhanced competition. With WMT shares needing growth -- fueled in part by more store openings -- what is a WMT investor to do?

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