business news in context, analysis with attitude

Yesterday we had a piece about how the Occupational Safety and Health Administration (OSHA) unit of the US Department of Labor "has inspected more than 270 Dollar General stores and found 111 instances of workplace safety violations. The agency has also imposed more than $15.5 million in penalties during that period, according to data provided by a White House official."

The Times story makes the point that Dollar General's entire business model seems to depend on being a fast-growing, lightly staffed entity where it costs less to pay the fines than to actually address the issues being raised by OSHA.  Now, OSHA has expanded its Severe Violator Enforcement Program "to include any type of company that willfully or repeatedly violated safety standards.  The first to be added under the program’s expanded scope: Dollar General."

I commented, in part:

Assuming that the charges are both legitimate and provable, it'd be nice of regulations actually had some teeth.  Like fines that are so onerous that they are not so easy to simply pay and move on.  Like the ability to post obvious signage attesting to individual stores' safety violations.  And maybe even force the closure of stores that are severe and repeat violators.

Are we going to wait for a store to have a fire, and for people to die because they can't access a fire exit?  And if that happens, will we allow high priced lawyers and lobbyists to help this company - or any company - avoid legal consequences?  Because that's the road we're headed down.

If stores are not willing to address safety issues because it is the right and responsible thing to do, then regulators ought to be able to force them to deal with these issues because it is too expensive, too inconvenient, and too negative for their brand image not to.

One MNB reader responded:

Honestly, after visiting numerous Dollar Generals over my years in retail, I would have to say that I’ve never seen such consistent problems as they have in their stores. I’m sure the company prides itself on its revenue per labor hour, but how many sales are they missing due to poor stocking conditions and out of stocks?  The store near my house has had its front door window broken for at least many months. The turnover has to be atrocious. I would challenge investors to visit the stores and see for themselves how much revenue is being left on the table in existing stores. Growth, like DG experiences, covers a lot of sins, but eventually those sins come to light. 

MNB user Karl Graff wrote:

It is good that OSHA finally steps in but the reality is that nothing of substance will change until the financial penalties force this retailer to actually care about safety- and even then it won’t be caring about safety but caring about the dollars lost.

Managers will be blamed for this. They are given about 90-150 payroll hours- not counting their own hours- to run a business that is open about 90 hours per week. There is no double coverage unless the business need literally demands it. Corporate will talk about how managers need to implement all of the processes already in place and that it is their fault that this is a problem instead.

Corporate will send safety tape, some calls to action and probably mandatory safety talks to show that they are doing something about this  while not actually making the changes that would get to the root- which is the low amount of payroll managers are given to run their complete operation.

Dollar General was the worst employer I ever worked for and I am so glad that I had other options!

I lived 3 blocks from the Dollar General store I ran in my home town- and I spent more time away from home working 3 blocks from my house than I did working 45 minutes away.

I remember one day my son was coming home from school, fell and broke his wrist. I was not allowed to close the store, (I was the only person scheduled), to take him to the hospital. I had to wait almost an hour before I was allowed to do so… after I found coverage. That was the day I decided to quit.

They severely underpay and overwork their staff- especially the “managers” – and the managers are told that the reason they have to work so many hours beyond what they are scheduled is because they are poor managers. The low payroll has been an issue for years but it cannot be brought up as a reason for any problems- it is always viewed by DM’s and above as an excuse.

Sadly, DG is not the only retailer where this is true. We as consumers have to take responsibility for these working conditions as well. We want the absolute lowest price and do not see / care how we get it. 

It’s a race to the bottom in many ways - and companies like DG are leading the way.

And, from another reader:

Dollar General stores in Central Texas have recently been forced to close by local police and fire departments due to unsafe conditions.  The Dollar General stores were not allowed to reopen until they could clean up the unsafe conditions.   Appears local authorities have more muscle and influence than simple fines.

Yesterday we noted that  in western New York, Hegedorn's Market, a single-store independent grocer, will close after seven decades in business.

"It's a tough gig to be an independent grocer now," says  Jonathan Gonzalez, grandson of the store's founder. "It's sad but its been a great run. This business has come to an end of its life cycle."

I commented:

The story also features comments from a number of customers bemoaning the closing of the store, but clearly there were not enough of them doing their shopping at the store to keep it open.  Gonzalez is right about it being a tough market - Hegedorn's is about a dozen miles northeast of Rochester, as well as being one mile from the closest Wegmans, three miles from the nearest Walmart, and eight miles from a Tops store.

An MNB reader - one more familiar than I with the geography - commented:

Hegedorn’s is also less than 1 mile from a Target, less than a half mile from an Aldi’s, and virtually shares a parking lot with a BJ’s.

About 5 miles from where we live, and our Wegmans is right across the street from the WalMart.

In other words, Hegedorn's was kind of screwed.

We had an Eye-Opener yesterday about my experience at a local Starbucks where I found service to be slow and the floor to be dirty - both attributable to what seemed to be a staffing problem.  But there also was this sign:

It seemed to me that there are two things wrong with this sign.

If these Reserve Coffees have "just arrived," why are they sold out?

Why the hell is there a sign for "just arrived" Christmas blend posted on March 27?

I told Mrs. Content Guy about my experience.  We agreed that the delay and the dirt could be attributed to staffing issues, but then she said:

Those two are people problems.  But the sign is a stupid problem.

And then I made the argument that this actually reflects what I would call the nobody-gives-a-damn syndrome, which may be the biggest problem that new CEO Laxman Narasimhan has to deal with.

And my rant went on:

The retailers reading this story and seeing that sign ought to take it to heart, and immediately go out and walk their stores.  Don't take it for granted that your stores don't suffer from nobody-gives-a-damn syndrome.  Go find out.  Check out every sign, every wall, every aisle and every department.

Take pictures.  Make sure the problem gets fixed.  And see the problems not as a product of lackadaisical employees, but as a result of your own leadership.  It is easy to blame others, and much harder to take the responsibility.  But if you do the latter, and double-down on creating a culture that actually gives a damn, then that will be some level of leadership.

MNB reader Lynn Olsen responded:

I couldn’t agree more with your FaceTime comments about “nobody-gives-a-damn” syndrome. It seems to be everywhere at retail. 

I’m mindful of two truisms: 

Retail is Detail

Jan Carlzon’s (former CEO of SAS) famous admonition that every point of contact with a customer is a “moment of truth”.  

I would argue that includes all types of contact: visual, audio, environmental, or with an associate. 

Marketing and Advertising make brand promises - which are not really truthful without consistent execution. 

From another reader:

Great insight…. Mrs. Content Guy! 🙂

And then finally, this email from MNB reader Steve Anvik:

Nobody gives a damn” is not a SBUX, or even retail at large(s) problem imho.  I realize you’ll argue, probably castigate me per usual - but it seems a fairly clear reflection of societal norms.  By that I mean the permissiveness of progressivism, has led to a breakdown of the golden rule. There are so many “me first” people generally, that workers who actually work (at any level) are giving up caring. Why fight (it), switch! Progressives: your chickens are coming home to roost. Who will make my latte!!

First of all, I'm sorry that you feel like when I disagree with you I'm "castigating" you.  At least I post your emails.

That said, I'm sure that when I feel strongly about something, and that something said by one of my readers is inaccurate, unpleasant, or just plain absurd, my comments are such that they could be interpreted as being castigating.

Which is what is going to happen here.

Ready?  Here it comes.

It amazes me that you would turn this into something political and so incredibly polarizing.  It just isn't helpful, and I don't think it is true.

The "permissiveness of progressivism?"  Are you suggesting that people with progressive political views don't have a work ethic, don't value a strong work ethic in themselves and others?  I would argue that there are as many me-first people on the non-progressive side of the ledger as the progressive side.  Also as many hard-working, dedicated, innovative people.

Your apparent belief that only those who agree with your view of the world are hard-working, selfless, do-unto-others-as-you-would-have-others-do-unto-you people strikes me as absurd.

If I were feeling less castigating, I'd say you were guilty of epistemic closure.

But because you got my Irish up, I'll just go with saying that I think it is B.S.