scenic picture from Washington state
SubjectsPlanning › Regulation of Large Retail Establishments (Big Box Retail)
Updated 07/2014

Regulation of Large Retail Establishments (Big Box Retail)

Contents

Introduction

Large retail establishments, often termed "big box retail" or "superstores," have become a familiar fixture on the American landscape. Wal-Mart, Costco, and Toys "R" Us have become household names. Initially, these large-scale stores gravitated toward suburban sites that offered large tracts of low-cost, readily-available land, with access to a larger urban market area. Over the last decade, these large-scale stores have made impressive in-roads into rural and small town communities. A new breed of "big box" stores is rediscovering the market potential of central locations in much larger cities. In short, no community is immune from the potential effects of these large-scale retail businesses.

In many cases, these large-scale retail establishments have been welcomed with open arms, and viewed as an antidote to a declining economy, promising new sales tax revenue and jobs. They have met stiff opposition in other communities, which fear negative economic impacts on existing downtown business, traffic or other impacts of sprawl development, or a lack of connection with established community character. Cities that lack these establishments within city limits may still experience significant impacts from stores in neighboring communities. In fact, such large-scale retail will bring a complex mixture of benefits and impacts.

These impacts typically were not anticipated in zoning and development regulations developed prior to the meteoric rise of such large-scale retail. As a result, many communities are re-working policies and development regulations to provide better guidance in making decisions.

This webpage is intended to provide a variety of examples, regulatory approaches, articles and studies to help with decisions about whether such large-scale retail establishments are appropriate in the community, and if so, where and under what circumstances they are appropriate. Materials include suggestions or examples of design guidelines, development standards, size limits and other requirements.

Definitions

Various publications have identified a number of sub-categories of large-scale retail development including discount department stores, "category killers," outlet stores, and warehouse clubs. The following definitions are not offered as suitable legal definitions, but are provided to convey a general understanding of various types of large-scale retail establishments offering discount pricing. Some of the codes and guidelines referenced on these pages include definitions tailored to local regulatory needs. These may be helpful in considering definitions for inclusion in codes and guidelines.

The following definitions are excerpted and adapted from Maryland, "'Big-Box' Retail Development" (), Managing Maryland's Growth: Models and Guidelines, Maryland Department of Planning, October 2001.

What is a Big-Box Retail Development?

Big-box retail facilities are large, industrial-style buildings or stores with footprints that generally range from 20,000 square feet to 200,000 square feet. While most big-boxes operate as a single-story structure, they typically have a three-story mass that stands more than 30 feet tall. The definition, or perhaps the description of a big-box store can be better understood through its product category. For example, book retailers like Barnes & Noble generally range from 25,000 square feet to 50,000 square feet, whereas in the general merchandise category, big-boxes like Wal-Mart range from 80,000 square feet to 130,000 square feet. (These typically no-frill stores seek to attract customers with the low prices and/or large selection possible with large floor space and high volume sales).

Discount Department Stores

Discount department stores, ranging from 80,000 square feet to 130,000 square feet, offer a wide variety of merchandise including automotive parts and services, housewares, home furnishings, apparel and beauty aids. This group includes retailers such as Target, Wal-Mart and Kmart.

Category Killers

Category killers, ranging from 20,000 square feet to 120,000 square feet, offer a large selection of merchandise and low prices in a particular type of product category. This group includes retailers such as Circuit City, Office Depot, Sports Authority, Lowe's, Home Depot and Toys "R" Us. (As the name implies, they tend to overwhelm or "kill" smaller, or less focused competitors)

Outlet Stores

Outlet stores, ranging from 20,000 square feet to 80,000 square feet, are typically the discount arms of major department stores such as Nordstrom Rack and J.C. Penny Outlet. In addition, manufacturers such as Nike, Bass Shoes and Burlington Coat Factory have retail outlet stores.

Warehouse Clubs

Warehouse clubs, ranging from 104,000 square feet to 170,000 square feet, offer a variety of goods, in bulk, at wholesale prices. However, warehouse clubs provide a limited number of product items (5,000 or less). This group includes retailers such as Costco Wholesale, Pace, Sam's Club and BJ's Wholesale Club. (These clubs often charge their customers an annual membership fee).

Other Userful Retail Development Terms

The term "power center" is often used to describe groupings of the various forms of big-box retailers. Power centers generally contain 250,000 square feet to 1 million square feet of retail space. Retailers that locate in power centers may be freestanding, structurally attached to another retailer, or a combination of both types. The trade area from which most power centers draw consumers ranges from five miles to ten miles.

The term "regional center" is often used to describe a small grouping of big-box retailers, typically developments of two or more anchor stores. Regional centers range from 400,000 square feet to 800,000 square feet. They are generally enclosed with an inward arrangement of stores connected by a walkway. The trade area from which most regional centers draw consumers ranges from five miles to fifteen miles.

Articles

  • California Responses to Supercenter Development: A Survey of Ordinances, Cases and Elections, Public Law, Research Institute at Hastings College of the Law, University of California, Spring 2004 - Still useful report provides a balanced examination of legal and political issues arising from big box development in the state of California. Discusses law suits against local jurisdictions, big box lobbying, and alternative strategies to make big box a positive contribution.
  • Controlling Big Box Retail Development in Georgia - Land Use Clinic, University of Georgia School of Law and College of Environment & Design, 12/2004, updated 02/2007 - Useful discussion of local regulations efforts, and results of challenges to codes, especially in Georgia, California and Colorado. Legal issues include retail caps, local bans, and tempoorary moratoria.
  • How Do You Deal with the Entry of a New Wal-Mart Supercenter into Your Town?, by Kenneth Stone, Public Management, Volume 87, Number 2, 03/2005 - Outlines some of the strategies that have made Wal-Mart a winner and comments on likely economic and social outcomes of the addition of a Wal-Mart to the economic mix - Provides a few key strategies for dealing with Wal-Mart that are still useful
  • The Incredible Shrinking Box, Michigan Land Institute, 09/11/2005 - Some big box retailers are reshaping themselves into downtown-ready formats having discovered the benefits of locating in close-in urban neighborhoods.
  • Olympia Memorandum: Municipal Authority to Regulate Business Based on "Corporate Citizenship" and Local Economic Impacts, 04/2006 - Addresses legal considerations in regulating "Big Box" and/or "Formula" retail in Washington
  • Model Low Impact Development Strategies for Big Box Retail Stores (), The Greening of Surface Water Management Methods for Large Format Retailers, prepared by King County Department of Natural Resources and Parks for the U.S. Environmental Protection Agency, 2007 - Investigates methods to reduce environmental impacts of big box retail through use of LID principles of stormwater management
  • Wal-Mart, Target seek big returns in small stores, by Nicole Maestri, Reuters, 02/03/2010 - Brief article about big box adapted for urban settings, changing demographics, and slowing economy

Design Guidelines

Codes

Washington

  • Bellingham Municipal Code Sec. 20.25.060 - Large Retail Facility Design
  • Maple Valley Municipal Code Sec. 18.40.150 – Large Commercial Use Requirements
  • Olympia Ordinance No. 6417 - Relating to large-scale retail development; Olympia Unified Development Code, Sec. 18.06.100(C) - Large scale retail uses; and Ch. 18.130 - Commercial design criteria 
  • Port Townsend Municipal Code Ch. 17.54 - Formula Retail and Restaurant Establishments. (Although directed at "formula" or chain stores which may vary in size, these regulations may also apply to many large retail establishments)

Other States

Size Limits

  • Ashland, OR Municipal Code Sec. 18.72.050
  • Gig Harbor Municipal Code Sec. 17.36.055 - Maximum Grosss Floor Area (General Commercial) and Sec. 17.40.055 - Maximum Grosss Floor Area (Commercial District (C-1))
  • Port Townsend Municipal Code Sec. 17.08.060 (definition - regional retail establishment) and Ch. 17.20 (see especially Table 17.20.030) - Commercial Zoning Districts - Maximum size limits do not accommodate big box retail
  • Taos, NM Town Code Sec. 16.20.020 - Commercial, Industrial and Multi-Family Permitting Procedures and Building Size Limitations -A discretionary provisional permit process is required for these types of large scale structures

Addressing Vacant Big Box Buildings

Articles

Washington Codes - Vacant Stores

  • Ferndale Municipal Code Sec. 18.58.060(L) - Vacant or abandoned properties
  • Lynden Municipal Code Sec. 19.23.080 - Special development conditions for all stores greater than twenty-five thousand square feet GFA, and Sec. 9.23.090 - Special development conditions for all stores greater than fifty thousand square feet GFA - Both sections addresse reuse of vacant large retail stores and required restrictive covenants
  • Olympia Municipal Code Sec. 18.06.100(C)(5) - Very Large Scale Retail Facilities - Addresses adaptability for reuse/compartmentalization. See also: Sec. I(E) of the Olympia Memorandum: Municipal Authority to Regulate Business Based on "Corporate Citizenship" and Local Economic Impacts, which discusses legal concerns with requirements for performance bonds or other approaches to encourage the re-occupancy of vacant big box buildings under Washington law
  • Sequim Municipal Code Sec. 18.24.240 - Other requirements from Design Standards and Guidelines for Large Retail Establishments - Addresses maintenance of vacant or abandoned properties

Out-of-State Codes - Vacant Stores

  • Forsyth County, GA - Appendix A, Unified Development Code Ch. 12, Article I - Additional Requirements for Large-Scale Retail Establishments 75,000 Square Feet or Greater - See especially Sec. 12-12.1. Re-use of properties, and Sec. 12-12.2. Vacancy maintenance requirements
  •  Hood River, OR Ordinance No. 1966 - Addresses vacant and abandoned commercial property (not necessarily big-box), 2009
  •  Peachtree Code of Ordinances, Appendix A, Art. X, Sec. 1006.3(a) - Requires rental agreement between the tenant and its landlord which contains a contract provision prohibiting the tenant from voluntarily vacating such premises while simultaneously preventing the landlord from leasing the premises to another person or company
  • Reno, NV Municipal Code Sec. 18.12.306(e) - Design Standards for Large Retail Establishments - See (e) Adaptability for Reuse and Prohibition of Restrictive Lease Agreements
  • Wauwatosa, WI Code of Ordinances Sec. 24.09.090(I) - Maintenance and Reuse of Properties - Requires contribution to a fund that may be used for maintenance or to facilitate reuse of property, if the owner fails to comply

Economic Impacts of Large Retail Establishments 

  • A Downward Push: The Impact of Wal-Mart Stores on Retail Wages and Benefits - Executive Summary, Arindrajit Dube, T. William Lester, and Barry Eidlin, U. Cal. Berkeley Labor Center, 2007 - Employees at Wal-Mart earn lower average wages and benefits than workers employed by many other large retailers. This study finds that Wal-Mart store openings lead to the replacement of better paying jobs with jobs that pay less and drive wages down for workers in competing industry segments
  • The Effects of Wal-Mart on Local Labor Markets, David Neumark (University of California-Irvine), Junfu Zhang (Clark University), and Stephen Ciccarella (Cornell University), IZA Discussion Paper No. 2545, 01/2007 - Analyzing national data, the study found that the opening of a Wal-Mart store reduces county-level retail employment by 150 jobs. Because Wal-Mart stores employ an average of 360 workers, this suggests that for every new retail job created by Wal-Mart, 1.4 jobs are lost as existing businesses downsize or close. The study also found that the arrival of a Wal-Mart store reduces total county-wide retail payroll by an average of about $1.2 million
  • The Impact of big-box retailers on communities, jobs, crime, and more: Research Round-up, Leighton Walter Kille, Journalist Resource, Harvard School of Business - Shorenstein Center on Media, Politics, and Public Policy 04/09/2014 - Abstracts and links to a number of recent studies of various impacts of big box stores on local communities and economies
  • Living Wage Policies and Big-box Retail: How a Higher Wage Standard Would Impact Wal-Mart Workers and Shoppers, UC Berkeley Center for Labor Research and Education, 04/2011 - This study finds that raising employees’ pay to a minimum of $12 an hour would lift many out of poverty, reduce their reliance on public assistance, and cost the average consumer, at most, $12.49 a year 
  • Measuring the Economic and Sociological Impact of the Mega-Retail Discount Chains on Small Enterprise in Urban, Suburban and Rural Communities, Edward B. Shils, Wharton Entrepreneurial Center of The Wharton School, University of Pennsylvania, 2007/1997 - Although somewhat dated, this was a very comprehensive, multi-year study that found that mega-retail discount chains had significant impacts on the traditional retailer contributing to job loss and even blighted conditions in some formerly healthy connercial centers. See particularly chapters 1 and 3 that focus on impacts.
  • Mitigating Impacts of Big Box Retail on Local Communities, Ohio State University, Special Issue on Rural Development Policy, Journal of Analysis and Policy, Volume 37(1), 2007 - Brief article discusses who benefits and who pays with the arrival large retail discount stores, and also focuses on a strategy of requiring such large retail discounters to provide employer-paid benefits to reduce impact on publicly-provided services

Need more information?

Feel free to Ask MRSC. Washington cities, counties, and our contract partners can call or email MRSC for more information and advice - free of charge.