business news in context, analysis with attitude

More from members of the MNB community about the Southern California grocery strike. One MNB user wrote:

The reason stated by the national chains for the current strike/lockout, is the need to be more price competitive with Wal-Mart. If this is the true goal of the Chains then this is only one piece of the formula for getting the pricing in line with Wal-Mart. To achieve that goal, the national chains must give up the addiction that is slotting/ad funds, and execute a more efficient distribution system. Until they do this, they would not be able to compete on price. I don’t see the national chains giving up their addiction, so why should the employee’s give up theirs? The national chains need to present to the union a true plan to gain the efficiencies needed to compete with Wal-Mart. The whole problem does not lie with labor. All participants are going to have to take a big breath and suck it in if they are serious about a cure rather than just another band-aid. I am skeptical that either side will take those steps that they see as unthinkable.

The alternative goal is the one that you have always suggested and that is to give the customer a reason to come into the store. A good environment, an innovative layout, great service and offerings that Wal-Mart is not willing to duplicate. This would require an engaged labor force that is a partner with the store in giving service and an experience worth returning for. It would also take a commitment from the top to implement the changes in the corporate culture to achieve the right environment at store level. The disharmony between management and labor, that was present even before the strike, makes this option unlikely. Neither side of the dispute is even considering this.

The unions have their national agenda and are willing to sacrifice the employees in Southern California and the upper management of the chains are running scared of the possibility that the same thing that happened to Albertson’s in the Boise market, (a dramatic loss of market share when 3 Wal-Mart stores were opened over 3 years) will happen to all the chains in Southern California.

Panic does not make for good decision-making and there is a lot of panic going around.

Another MNB user wrote:

Too little, too late but there is a simpler solution to contract negotiations. It's called interest based bargaining. It works, but it takes time and a commitment to building trust. It takes a realization that we're all in this together - that store's don't run especially well with disgruntled employees (or any employees at all). It requires an understanding of the real cost of bad PR. It requires a large dose of civility on both sides. It's also not a particularly popular method of negotiations because it requires change on both sides.

It also takes a forward thinking union and company. Sadly, this seems to be lacking in our country.

I agree that there is a lack of acceptance on the union's part that health care costs have real impacts on operating expenses and in turn wages. What's distressing is that unions could champion this issue and push for controlled health care costs because it benefits their members.

Of course I write from a utopian place - a unionized natural food cooperative. And I'm a manager (non-union).

Utopia is named that way for a reason.

Another MNB user chimed in:

I wonder what the cost is to the current UFCW labor workers who would lose their jobs to be filled by non-union Wal-Mart employees. Would the additional jobs and grocery savings outweigh the cost of unemployment to a community?

Some will say yes. We find it difficult to believe.

And on the report that Safeway CEO Steve Burd sent a personal assistant to collect letters from a group of religious leaders instead of going himself, one MNB wrote:

Steven Burd has a personal assistant?? And he's not willing to pay more for his employees' health insurance? Is there something I'm not understanding?

We had a piece the other day about the California state controller calling for an end to the grocery strike, to which one MNB user responded:

The Calif. controller is a far left liberal who is advancing the agenda of the union, using his power immorally to chastise the big chains. He has no right from his elected pulpit to determine what is fair for the "average worker."

And another MNB user added:

The California state controller should mind his own business.


There's an interesting discussion continuing on MNB about the role of Wal-Mart in the community.

One MNB user offered:

Specifically, on the topic of the quality of Wal-Mart employees, someone wrote (to MNB that) "Wal-Mart has done a wonderful job in being able to provide employment for what the rest of use would consider an unemployable person. We owe Wal-Mart a debt of gratitude."

So I'm to believe that the biggest and one of the most profitable companies in the world, Wal-Mart, got that way by hiring the rejects from other companies? How ridiculous is that?

MNB user Randy Harmon wrote:

Yes, they may charge 15% less for their groceries, yet they also pay 50% less for labor than other stores. All the profits go to Bentonville and the shareholders. That money is not spent back into the LA economy. What effect does this have on the LA Resident. Pay cuts and loss of cash in the economy is the measure they should counter-measure.

In a story yesterday about rising consumer confidence, we got a little depressive, writing that "we suspect that when they were measuring consumer confidence, the Conference Board didn’t talk to the folks at Meijer who are being laid off. Or the folks at Steelcase. Or Kraft. Or any of the 3,500 people who are being laid off by bankrupt KB Toys, which said just yesterday that it will let those people go as it closes 375 stores. Or folks from any of the other companies that have announced layoffs since the beginning of the year."

Not a popular assessment.

One MNB user wrote:

Stop your whining already. I believe that we all know about the layoffs, as we are all impacted by the directly. You are staring to sound like a “sound bite” for the Democratic party.

Yikes! Would that be Al Sharpton's Democratic party? Or Dennis Kucinich's? (Just curious…)

MNB user Mark Woodrow wrote:

So are you saying the results are rigged? They only count people who are employed? The indicator is going to crater next quarter?

Neither. We're just saying that maybe the index is a little myopic.

Another MNB user wrote:

I cannot understand your negative comments on the improving state of consumer confidence. Everyday people lose their jobs through no fault of their own, BUT also because the competition is better or their skills are lacking.

Based on this month's labor statistics 94.3% of American work force is working. Productivity is at all time high along with plant efficiencies. My company is currently looking at investing in two new machines that will lower our costs of labor by eliminating 8 jobs, that is the bad news. The good news is we will be more competitive, enabling us to not only keep our current business, but attract more customers & business, thus hiring back the 8 and possibly more, that's the good news. The people who are so afraid of losing their jobs are not in the same crowd as those buying NEW houses, housing starts are at an all time high. Interest rates continue to be low, and inflation is extremely low. Have these concerned consumers looked at their 401K or stock portfolio, up 25-30% in the last 12 months?

Your comments sound like a candidate's sound bite out of the political primaries .Take a break and look at everything going right at this time. If you think things are bad now, you are either forgetting history or lying to yourself. More people are working today than at anytime in US history, more people own homes & stock. Their health care is expensive, but the best in the world. Our biggest problem is little Johnny & Mary eating too much at McDonalds', and they cannot read the menu. These are both parental problems, but please spare me the both parents working argument. Your views tend toward a liberal outlook, I do not remember who said it, but the definition of a liberal is someone who is upset that someone else is having a good time.

Is my life perfect, no. Is it better than my father's & grandfathers', yes. My 4 children have prospects to have a better life than their parents. This is based on personal responsibility, not my neighbors or the government. For those people who are unemployed, like I have been in my career, they do have a full time job, it is called finding a job. To those worried about losing their job, start working harder at your current job to insure your value. Or get a new job now, the old axiom of your always more employable when you have a job is still true.

Thanks for the space to allow me to vent against all the current false economic doom & gloom.

My pleasure,

Though we are surprised that anyone who reads MNB would think that we are someone who gets upset when someone else is having a good time. That's about as far from our philosophy as we can imagine.

That said, here's the deal. We think there is a growing feeling in the land that a lot of the people who are unemployed simply don't want to work or are unskilled, and that ignore the fact that a lot of these jobs have moved abroad, and that the jobs that are left often pay less than the jobs that have vanished. And sure, some of these folks are unskilled and unmotivated…but not everyone. And to paint with that broad a brush seems to us to be a little shortsighted.

Retailers sell stuff to people. If a growing number of people don't have jobs or make less money, that will have an impact on companies that sell stuff.

If we ignore that, we make a mistake.

We've posted a number of emails critical of our various positions over the past few days, which has helped generate some emails that have been supportive.

MNB user George Butterfield wrote:

Having been involved in the supermarket industry for over fifteen years, I have come to respect your opinions about Wal-Mart. In fact, I have found that taking the time to read your reporting each morning has been personally informative, and believe this to be an important daily bit information to a segment that has been under a great deal of pressure.

Another MNB user wrote:

Wow! You've been taking quite a beating, Kevin! Not that you need reaffirmation, but I think your views on the grocery strike and Wal-Mart are on the money. I don't think you are too hard or too easy on any one company and I find your analysis to be very fair and balanced. Optimism with a healthy dose of skepticism is what I see in your columns. It's working for me - hang in there and keep your head down. The (verbal) bullets are flying low.

And, responding to the suggestion that we have a hidden agenda, MNB user Loyd Tomlinson wrote:

Most publications have serious hidden agendas. Trade groups have CPG companies financing research (bias). Advertisers influence most trade magazines etc.etc..

We find your group one of the few we trust to call it like you see it. No one expects you to be perfect.

Thanks, Loyd.

We think we can be accused of a lot of things, but having a hidden agenda isn’t one of them.

Though we do have an agenda that you may not know about, and we probably should be up-front about it.

Seventeen-year-old David Coupe starts college next year. We have to pay for it.

And there's no more pressing agenda than that.

And here's our favorite email of the month, from MNB user Mike SanClemente:

FYI, my favorite team - the Patriots - have won every week since I began subscribing to MNB....Keep up the good work!


We'll see if the streak holds this Sunday.
KC's View: