Retrieval companies round up and return wayward wagons.

WHEN Enrique Hernandez got into the business of retrieving wayward shopping carts in the mid-1970s, the biggest problem was homeless people taking them from grocery store parking lots.

There were dozens of morn-and-pop competitors, and retrieval companies charged less than $1 each to pick them up.

Now many of Hernandez's peers have disappeared. Shopping-cart retrieval in Southern California is dominated by one large player that the major grocery chains created. The firm, California Shopping Cart Retrieval, has about 70 percent of the market in Southern California.

"They changed the whole industry," said Hernandez. His Venice-based Hernandez Cart Service was forced to cut its number of drivers to 30 from a high of about 95 in the mid-1990s. "Now, there is less competition among us."

Even so, the work isn't any easier. It's no longer the homeless who remove most of the carts. It's apartment dwellers--especially those who walk to the supermarket--and the numbers can reach the hundreds per day in some areas, drawing the attention of public officials.

"It's a blight," said Mitchell Englander, chief of staff for Los Angeles City Councilman Greig Smith. Smith, who chairs the City Council's public works committee, has introduced an ordinance that would require stores with 10 or more shopping carts to have a licensed cart retrieval company pick up their carts, under threat of fines or even the loss of their business license. He expects a version of the ordinance to go before the full council in coming months.

The business has also become more dangerous.

In some parts of South Los Angeles, drivers don't pick up carts after noon. "We had a driver go down this street every day for years, but some gang members decided they didn't like him there, so they beat him up," said David Reid, executive vice president and chief operating officer of California Shopping Cart Retrieval.

Retrieval service firms do business by contracting with grocery stores or other retailers to pick up their stray carts for a set fee. They also sign contracts with cities for the work. (The services can't pick up carts on private property or those used by the homeless, since under law those are not abandoned.)

Los Angeles stores lose tens of thousands of carts each month. The city of Long Beach has one of the worst problems; California Shopping Cart Retrieval picks up 500 carts per week there.

"If there is one car in the family, and the breadwinner goes out and uses the car, any shopping is left to the person who's left at home to do on foot," Reid said.

The California Grocers Association formed Shopping Cart Retrieval in 1993--a response, according to Ralphs Grocery Co. spokesman Terry O'Neil, to the proliferation of unlicensed firms with spotty records.

"We knew we'd get our carts back," O'Neil said.

The Burbank-based company has 13 employees and uses the trucks and labor of eight subcontractors, each of which has about 10 to 30 drivers picking up carts from Fresno to the Mexican border, Reid said.

After starting with 200 stores, the company now picks up carts for 2,500 stores, including stores owned by Albertson's Inc., Costco Wholesale Corp., Rite Aid Corp. and 99 Cents Only Stores, It also picks up carts for 30 municipalities, which pay the company a flat monthly fee ranging from $100 to $5,000. The company charges more than its competitors, but claims it provides better service. It drew in $8 million in revenues last year.

"It is marginally profitable," said Reid. "Our company was founded for the mutual benefit of the grocery business so we operate this at a very low margin. However, we're not in the business of putting any of the other independent contractors and entrepreneurs out of business."

Competition

Still, Hernandez said only three or four significant competitors remain in Los Angeles. His company picks up more than 10,000 carts per day for many of the independent grocery and retail stores, but he has stopped buying new trucks.

The independents mainly compete by offering lower prices.

Last month, the city of Pomona awarded a one-year contract to Norman's Cart Recovery Service, a Fontana-based firm that priced its bid at $30,000 per year, lower than both Hernandez and California Shopping.

Even though stores have contracts in place, cities also are responsible for cleaning up the streets, said Howard Morris, Pomona's solid waste manager.

"There are always some abandoned carts that don't come from Pomona stores, so we still have to get them if we want to keep our city clear of the eyesores." Morris said.

Pomona has already passed an ordinance mandating that local stores pick up their stray carts.

Smith's proposal for L.A. will include a provision targeting cart owners who are not aggressive enough in retrieving carts because they don't want to offend customers, Englander said.

That's an argument that the retailers dispute.

"The carts are expensive," said Pat St. John, vice president of marketing at Trader Joe's. "We want to use them as much as possible, so we feel it's worth the time and money to get them returned."