retail news in context, analysis with attitude

We received the following email yesterday in response to our ongoing coverage of the Safeway-Dominick’s situation:

“I have worked for Dominick's for almost 25 years, Yes I think that Steve Burd will close the stores, just to make a point. I also think (that) not only will I be out of a job soon, but so will Steve Burd,

“He has his shareholders to answer to.

“It is a shame that he didn't listen to us, the loyal staff, and the loyal customers, three years ago when we told (Safeway that) his programs and products didn't work here. His arrogance cost me and my coworkers our jobs…”



And another email on the same subject, from a different perspective:

“Talking to Dominick's employees suggests that a few things are making this quite a bit different than the typical wage/contract disputes.

“First, employees are incredulous at how indifferent Safeway management has been towards the customer. They see "their" stores being run into the ground through poor marketing, weak perishables (especially meat), and bad inventory management. Many of the work rules and expectations make the situation worse.

“Second, they are incredulous at the characterization of the "huge" wage differential. Actually, rates are very comparable to Jewel; Dominick's "cost per hour" is higher because business has dropped precipitously, leaving only a "tenured" work force with a low part-time mix. There is not yet any significant non-union competition in Chicago putting severe downward pressure on wages.

“Third, the buy-out offer is seen as silly. Freeze your salary for five years and go to what is effectively "part-time" status for about $500? The antagonism is further fueled by the "just how stupid do they think we are?" reaction.

“Fourth, I think the employees are prepared to let it be shut down and hopefully be acquired by someone else. The issue isn't about wages, it may really be about not wanting to work for Safeway.”



And another:

“A key card which hasn't been talked about is the Truckers and Warehouse Union employees. If they will not cross the picket line (and Chicago is a Union Town), then Safeway would have to bring in strikebreakers for the Stores, the Warehouse and the Truck Drivers. I believe Safeway could operate the stores, but to service the stores DSD would be impossible for more then a few weeks.

“Kroger (Market Basket) tried this in Los Angeles back in 1969 (or 70). It took them three weeks to get the warehouse "on-line" where they started to ship almost normal shipments to the stores. Those three weeks in-between were a lot of work for those of us who had to run the store with whatever the manufactures could ship us direct.

“After the first week, the shelves were empty. I received a bobtail truck of Green Giant (I was allocated 6 pallets of vegetables). A pallet was three layers of Corn. one layer of Green Beans, one layer of Peas and the top two were mixed mushroom and assorted items. The manufacture allocated the mix. I just put all of the cases up on the shelf in vertical blocks. Same with paper. No schematics, just sell what you can get.

“After a few weeks, Market Basket had their warehouse almost back to a normal flow. Regular trucks, "scab" drivers. We only received the top 600 Grocery items but that was 80% of what we sold everyday and that meet most of the consumers needs. The hard part was fresh milk and eggs for the first few days, after that things started to come in normal. In the end, I actually started to reset sections back to the planogram book (In those days, before store computers, pricing was found by looking up the item in the schematic book (GAP Book - Grocery Allocation and Pricing) and then finding the correct retails in your price zone). Having the sections to planogram was more important with that system back then.

“It is my guess that Safeway will bring in some managers, from other divisions, to backup the current ones and using temporary employees, have a closeout sell. Once they have cleaned out the store of sellable product, then they will close them.

“No employee cost, no Heating or Refrigeration cost, just building overhead. And that is a write-off.

“Once a new buyer takes over, they will be "new" stores and a non-union buyer would not have to take on a Union work force.

“Actually, it will be cleaner. A new buyer will have a grand opening and life goes on.

“Only down side will be the Union workers who will have to accept lower paying jobs, at few if any benefits, and this is what they voted for. Dumb!”



And another MNB user wrote:

“I'm not sure of the legal implications, but would it be possible for Safeway to "close" the Dominick’s and re-open under the Safeway banner with new articles of operation voiding their union contracts? They have effectively transformed the stores into Safeways anyway, why not brand them as such and perhaps the consumers will have a better understanding that this isn't their fathers “Dominick’s"...”


The floor remains open, folks…




Got an interesting couple of emails about McDonald’s and the fast food business…

One MNB user wrote:

“My view is with the aging "boomers" McDonalds and almost every fast food chain (except Subway) missed the boat entirely. Just as KFC was not the first to introduce the chicken sandwich (duh), the entire industry continues to rely on fat and calorie laden menu items. If I ruled the McDonald world, I would joint venture with "Healthy Choice" or "Weight Watchers" or the like and create even a limited menu for people who care what they eat. My wife and I (we are 56), have not been in a fast food restaurant in 20 years except in a rare instance. I realize their are menu limitations at these stores, but a large number of the 28 million boomers either have or will drive by because there is nothing on the menu they can or should eat. What am I missing here?”


And MNB user Don Sutton offered the following field report:

“The wife, one son, two grandkids and I stopped by the new 3 in1 McDonald's yesterday - that's 3pm on a Sunday afternoon. First off, we got in line for seats. Seems a few other people wanted to try out the new Mickey D offering. There were only a half dozen or so people ahead of us so we gave them our name and stood around waiting.

“After 5 minutes or so I noticed we weren't getting any closer to seating. I also noticed a gentleman going from empty table to empty table, trying to pacify folks complaining about the wait for food. (By "empty" I mean patrons were in their seats but the food wasn't on the tables.) Once seated, you pick up a little phone and call in your order and wait. It's reminiscent of the boom in similar operations in the late 50's and early 60's. Looking around at the setup a little closer, one notices that the tiny tables are sandwiched in awfully tight and trying to cram five people into one of the larger tables is going to be kind of silly if you want room for everybody's food.

“Separate family members or bump elbows. What a choice.

“I'd like to comment on the food because some of the new fare looked pretty tasty. Unfortunately, after a 10-minute wait, with no end in sight just to be seated, plus however long the wait for food would be, we gave up and went to Burger King. We got instant service, mindless little toys for the grandkids and sat at a table with lots of room.

How would I describe the experience?

The word that comes to mind is unique.

In this case, unique is a word based on two Latin roots words: unus (meaning "one") and equis (meaning "horse.")

“The obvious question that comes to mind is: ‘Did they really pay someone to come up with this idea and why didn't they go the rest of the way and put in outside phone ordering and waitresses on roller skates?’”





We’ve been writing about supermarkets in airports, and an MNB user pointed out yesterday that Amsterdam has one…and, according to MNB user Doug Gammage, a lot more than that:

“In the Amsterdam airport there is also a casino and a hotel you can rent for 12 hour periods, (or just stop in for a shower). There are conference rooms for business meetings in the airport and many good bookstores, good quality eating establishments, and high end clothing stores.

“What might be cool is mini movie theatres or rental DVD movie stations. (Not a new idea, they used to have individual TV screens in the bus depot in Toronto about 20-25 years ago. I believe they were discontinued because folks were using the seats for snoozing and neglecting to drop in cash.)”





And finally, on the subject of loyalty marketing cards and their questionable value, one MNB user wrote:

“Say what you may about them; if they enable me to buy something I want cheaper than at my normal shopping source, I'm all for using it.

“Doesn't mean I'm going to come back and buy all my groceries there, by any means.”


Exactly.
KC's View: