A Wal-Mart grocery store will open later this year in Torrance in a portion of the Hawthorne Boulevard space vacated by Kmart, a move widely expected since the company axed the grocery component of another store nearby.

The 30,000-square-foot Wal-Mart Neighborhood Market - the fourth in Los Angeles County - is also likely to rachet up the level of competition in the crowded Southern California grocery market, already viewed as among the nation's most cutthroat.

The other Wal-Mart opened in September on Hawthorne Boulevard across from Del Amo Fashion Center. That 77,000-square-foot store, on the site formerly occupied by Mervyns, includes some dry grocery items but company officials scrapped the grocery component that was to take up about a quarter of its floor space.

Since that decision, it was expected the retail giant would find another site in Torrance for one of its grocery stores. But city officials only confirmed this week that Wal-Mart had been quietly given the required administrative approvals for the Neighborhood Market late last year.

"Grocery is a permitted use so there was no special review required," said Gregg Lodan, planning manager. "They just needed building permits for their interior build-out of the site."

A Wal-Mart Neighborhood Market typically includes a bakery, deli and pharmacy, as well as fresh food.

Wal-Mart, which is a nonunionized retailer, keeps quiet about new locations as long as it can, especially in Southern California where local unions have targeted its expansion efforts.


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For example, in December 2010, a shadowy union-backed group called Building an Economically Sound Torrance filed a lawsuit against the city claiming it had failed to perform a required environmental analysis before approving the Wal-Mart.

That lawsuit was quickly tossed.

A legal challenge was also filed against a proposed Wal-Mart Neighborhood Market in the Chinatown section of Los Angeles.

The former Torrance Kmart, which closed in January 2012, now houses a 50,000-square-foot Orchard Supply Hardware to the north of the site and a 25,100-square-foot HomeGoods adjacent to Marshalls.

The Wal-Mart Neighborhood Market at 19340 Hawthorne Blvd. will sit between them when it opens late this year, Wal-Mart spokeswoman Rachel Wall said.

"This project is expected to create about 75 contract construction jobs over the year," she said. "The store will create approximately 65 new full- and part-time jobs."

A temporary hiring center near the store will open in the second half of 2013. Full-time Wal-Mart workers in California earn an average of $12.89 an hour, Wall said.

Wal-Mart also has neighborhood markets in Downey, Bell Gardens and Panorama City. In addition to the planned stores in Torrance and downtown Los Angeles, another is proposed for Altadena.

Wal-Mart is now the nation's No. 1 grocery chain and its first Torrance store is sure to reverberate through the local industry.

Traditional grocery store chains have reportedly seen their market share shrink considerably in the region in recent years since a devastating 2003 strike.

The five-month strike cost the likes of Ralphs hundreds of millions in profit and severed long-standing customer loyalties, according to New York-based consulting firm Strategic Resource Group.

"Up to 20 percent of those consumers never came back," said Managing Director Burt Flickinger III. "They started shopping at Costco - everything from Costco to Whole Foods to Walgreens."

Not to mention the likes of El Segundo-based Fresh & Easy, although that relatively recent entrant into the grocery store industry is not doing well financially.

Fresh & Easy, owned by British supermarket behemoth Tesco, is in the midst of a strategic review of the underperforming chain that could result in its sale or closure. Fresh & Easy, which has a couple of hundred stores in California, Nevada and Arizona, has invested about $2 billion in the business since it opened in 2007, SRG observed.

Last June, SuperValue Inc. announced it would lay off 2,500 workers at its underperforming Albertsons stores in Nevada and Southern California and later last year closed 60 of them, including 18 in Southern California.

Now the company has sold off five grocery chains, including Albertsons, after years of being squeezed by competitors.

The Torrance Wal-Mart Neighborhood Market plunges into a local grocery store market crowded with nearby competitors that include Trader Joe's, Albertsons, Fresh & Easy, Super A, Ralphs and even a Target.

But despite the competition, Wal-Mart has steadily increased its market share in the grocery segment.

At the end of November, Wal-Mart had 257 neighborhood markets, a concept the company began in 1998, according to its website.

Wal-Mart said at its annual investors meeting in October that it is accelerating development of so-called small format stores.

The company wants more than 500 in operation by 2016 that it projects will bring in about $10 billion in sales.

nick.green@dailybreeze.com

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