updated 7/11/2007 11:42:17 AM ET 2007-07-11T15:42:17

In a surprise victory for Wal-Mart Stores Inc., the City Council on Tuesday failed to override the mayor’s veto of a ban on some big-box stores in the nation’s eighth-largest city.

Councilwoman Donna Frye reversed sides after supporting the ban three times since September, resulting in a 4-4 deadlock that fell one vote short of putting the measure into law.

Frye said she was uneasy with a blanket ban and would work for a new law that requires tougher scrutiny of new superstores.

“I do not like the idea of having giant superstores, but I also believe there is a way to deal with this issue that will be inherently better for our city,” said Frye, who narrowly lost a write-in bid for mayor in 2004.

Mayor Jerry Sanders called the council vote an “enormous victory for San Diego consumers.”

“Government should not tell consumers where they can and can’t shop,” he said.

The measure would have prohibited stores of more than 90,000 square feet that use 10 percent of space to sell groceries and other merchandise that is not subject to sales tax. It took aim at Wal-Mart Supercenter stores, which average 185,000 square feet and sell groceries. Costco Wholesale Corp. and other membership-style retailers would have been exempt.

Supporters of the ban argued that Wal-Mart puts smaller competitors out of business, pays workers poorly, and contributes to traffic congestion and pollution. Opponents said the mega-retailer provides jobs, low prices and more choices for consumers.

The Bentonville, Ark.-based retailer has about 2,000 Supercenter stores, including 27 in California, but none in the San Diego area. The retailer has 18 regular Wal-Mart stores in the San Diego area, including four within limits of the city of 1.3 million people.

Wal-Mart, which was considering a petition drive to overturn the measure if it became law, welcomed the decision.

“The ordinance was so anti-competitive and so anti-consumer,” said Amy Hill, a company spokeswoman.

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