Wal-Mart has proposed establishing its first store in Hawai'i with a full-line supermarket by expanding its existing Kaua'i store.

The world's largest retailer said it has no immediate plans to convert any other Hawai'i Wal-Marts to its Supercenter format. But the Kaua'i site will be a test to see whether the chain can establish a food vendor base to support the format in this geographically isolated state.

"We have to learn how to do fresh food (in Hawai'i)," said Chris Danos, a Wal-Mart real estate manager. "It's a test."

Wal-Mart has seven stores in Hawai'i and plans to open an eighth in Kapolei in 2008.

If the retailer is successful in opening one or more Supercenters in Hawai'i, it would dramatically alter local grocery retailing by creating powerful price competition for traditional supermarkets and creating new low-price choices for consumers.

Many shoppers faced with high prices and relative few choices welcome Wal-Mart selling groceries.

But the United Food & Commercial Workers Union Local 480 fears that Supercenters will force traditional supermarkets to reduce employee wages to survive the low-cost king of retailing.

The union, which represents about 2,300 workers at Hawai'i grocery stores, earlier this year launched a campaign to organize opposition to Supercenters, and has met with elected officials and presented them DVD copies of the anti-Wal-Mart movie, "The High Cost of Low Price."

Wal-Mart has called the film released last November "an error-ridden propaganda video," and said its jobs in Hawai'i are good-paying jobs that last year averaged $10.58 an hour for full-time hourly employees.

The company also has said that small businesses around its most urban Hawai'i store on Ke'eaumoku Street near Ala Moana Center have benefited from increased consumer traffic and free parking.

Wal-Mart's Supercenters carry a full line of grocery items, including meat, produce, deli, bakery, dairy, frozen foods and dry groceries. They average about 85,000 more square feet and carry about 53,500 more items than Wal-Mart's early prototypical stores.

The larger format has been the focus of Wal-Mart's expansion strategy in recent years, and since 2004 has been the predominant type of store the company operates.

Only three states — Hawai'i, Alaska and Virginia — don't have Wal-Mart Supercenters.

Wal-Mart opened its first Supercenter in 1988. From 2001 to 2005, the number of Supercenters nearly doubled to 1,980, while the number of traditional Wal-Mart stores dropped by about 400 to 1,209 in part because of store conversions, according to the company's most recent annual report.

On Kaua'i, Wal-Mart recently applied to the county Planning Department to convert its Lihu'e store from 119,235 square feet to a 216,388-square-foot Supercenter.

Under county zoning rules, the project will need Kaua'i Planning Commission approval, which involves a public hearing. County Council approval is not required.

Ian Costa, Kaua'i County planning director, said there are concerns how a Supercenter will fit with the Garden Isle's rural character and whether mom-and-pop grocers can coexist with Wal-Mart.

"We were a little shocked that Kaua'i would be the first for a Supercenter," he said.

Costa said there have been suggestions that the county should consider amending zoning rules along the lines of a recently proposed ordinance for O'ahu that would prohibit stores similar to Wal-Mart Supercenters.

In July, organizers opposing a Supercenter for Kapolei had a resolution introduced before the City Council that would prohibit stores bigger than 90,000 square feet that dedicate more than 20,000 square feet to groceries and sell more than 25,000 different items.

"Our city ordinances were written before anyone considered that an individual user would want to build a box-store the size of four football fields," local attorney Lex Smith said in a statement supporting the proposed ordinance.

"The time to protect and define our community character is before these corporations define it for us."

The resolution, which has yet to be heard, was introduced after Wal-Mart in June announced that its planned Kapolei store wouldn't be a Supercenter. Still, members of the Supercenter opposition group Kapolei First suspect that Wal-Mart will later convert the store to its Supercenter format.

"It would be virtually impossible to force them to keep their promises to the community," said Kapolei First spokeswoman Carolyn Golojuch. "You better believe that they plan to expand, both here (Kapolei) and in Pearl City."

Reach Andrew Gomes at agomes@honoluluadvertiser.com.