Walmart cancels Merced distribution center after 12 years of planning

By Erianne Leatherman | Apr 13, 2017

MERCED — After over a decade in the works, Walmart ended plans last month to build a distribution center in Merced, citing the changing retail landscape. 

The distribution center would have provided approximately 1,200 jobs to the area.

“As we continue to innovate and transform our business to serve the future needs of retail customers, we have reassessed the need for a new general merchandise distribution center in Merced,” Delia Garcia, a Walmart spokeswoman, told the Northern California Record.

Garcia said over the last 25 years, Walmart has generated millions of dollars of revenues for the city, provided career opportunities to thousands of people and supported dozens of local nonprofits.

“We look forward to continuing to serve our local customers, support local causes and invest in the community,” Garcia said.

The path to getting the distribution center approved for building was long. In 2005, Walmart submitted plans for the distribution center, which would have been 1.2 million square feet on 230 acres in southeast Merced. 

In 2009, the Merced City Council approved the building project as a boon for employment and conducted an environmental impact report, which was followed by public hearings.

Also in 2009, the deal became ensnared in a legal battle involving three Merced residents and the group Merced Alliance for Responsible Growth, which strongly opposed the distribution center and published a 12-page newspaper citing its issues with the deal, according to a report in the Wall Street Journal

The newspaper was funded by Saint Consulting, which used Safeway and union funds, according to the Wall Street Journal. Around that time, Walmart reportedly investigated whether its competitors funded the environmental lawsuits.

Over the next few years, the deal was tied up in the ensuing legal battle, spurred by lawsuits centering on Walmart’s alleged failure to meet the environmental impact report's requirements, ending in a California Supreme Court ruling in Walmart’s favor.

Amid changing consumer shopping trends, the e-commerce business has also been important to Walmart. The company purchased Modcloth for $51 million in March, adding to its acquisitions of Moosejaw,, and ShoeBuy.

“Walmart is in a period of unprecedented innovation and transformation,” Garcia said. “We are simultaneously investing in strengthening our e-commerce capability and transforming the store experience. As we continue to innovate our business, we are focused on the future of retail and becoming a company of the future.”

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