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The Wal-Mart/Dan’s Supermarket Controversy of the 1990s

Dan’s Supermarket & Wal-Mart logos

Dan's Supermarket & Wal-Mart logosWe all have now grown accustomed to grocery shopping at Wal-Mart, but when the national retailer first arrived in Bismarck back in 1990, its sale of grocery-related merchandise caused legal tensions between the national retailer and long-time local grocer Dan’s Supermarket, who had previously purchased the adjacent parcel with intentions of constructing a new store of its own.

Despite opening nearly five years after Wal-Mart, Dan’s had purchased its parcel of land from Wachter Trust back in 1987 – two years prior to Wal-Mart’s purchase. As a condition of the sale, a clause was added restricting a direct grocery competitor from developing on the adjacent parcel, which was still owned by Wachter Trust at the time.

This type of condition is actually quite common amongst businesses when either purchasing or leasing sites, and even sometimes demanded by city governments to prevent too many of the same types of businesses operating within close proximity of each other.

When Wal-Mart purchased the adjacent parcel in 1989, the national chain had been aware of the provision, however chose to still move forward in constructing a store on the site. When the Wal-Mart store opened the following year, it did indeed feature grocery and other food-related merchandise banned in the clause.

Even though Dan’s had yet to build a store on the adjacent lot, the company enacted its right to enforce the provision and prevent Wal-Mart from selling such merchandise.

At first, Dan’s was victorious in its legal action against Wal-Mart, since it had filed the appropriate paperwork listing the restriction.

In 1994, Wal-Mart won an appeal against Dan’s Supermarket, legally granting the company permission to continue selling grocery and food-related items, provided it did not operate a full-line grocery store on the site.

Dan’s proceeded with its plans to develop a new store on the site just south of Wal-Mart, opening in June 1995.

Dan’s proceeded with its plans to develop a new store on the site just south of Wal-Mart, opening in June 1995.

Despite this minor setback, Dan’s continued with its plans to develop a grocery store on the adjacent site, opening in June 1995. Their new store, which replaced its store located just north of Kirkwood Mall, was the first to be specifically branded as Dan’s “Supermarket” as opposed to “Supervalu”.

Ironically enough, Wal-Mart has since opened two brand-new super centers, with each of them featuring a full-line grocery department. This came barely ten years after its original store was granted legal permission to sell just a small handful of grocery items. The former Wal-Mart building now houses Runnings Farm & Fleet.

Wal-Mart was Bismarck’s fourth modern-day discount department store when it opened in 1990, after Kmart (1971), White Mart (1979), and Target (1980).

If I remember correctly, the friction between Wal-Mart and Dan’s Supermarket caused another stir when one of the retailers had wanted to install a connection between the other’s parking lots. This connector was ultimate installed, however.