Published on: March 2, 2005Brown & Cole, the Bellingham, Washington-based supermarket chain, announced that it will sell off eight of its 31 stores, or almost 25 percent of the company, because of an inability to compete effectively with an expanding Wal-Mart presence.
"This is in large part due to two things," company president Craig W. Cole said in a prepared statement, "health care costs and the deliberate saturation of the market by Wal-Mart."
The eight stores being sold are all on leased properties, so the sales will only cover equipment, inventory and leases. There are interested parties, according to Cole, and the sale is expected to be completed by the end of May.
Cole said the company plans to keep its remaining 23 stores.
Founded in 1909, Brown & Cole reportedly provides health care coverage for 95 percent of its employees, who are largely unionized. According to local press reports, average pay for full-time workers in Wal-Mart’s Washington state outlets is $10.14 an hour, less than at Brown & Cole, and only about half the hourly workers in those stores are covered by the company's health care insurance. None have union contracts.
"It used to be accepted that good companies took care of their employees," Cole said, accusing Wal-Mart of "inferior wages and benefits for its workers, outsourcing jobs to foreign producers and showing little regard for the environment."
Cole added, "The American worker and local businesses are becoming road kill in Wal-Mart's march toward the worldwide domination of commerce.”
Wal-Mart spokesman Eric Berger responded: "To retain the talented associates (employees) that we have, we know that we need to treat them fairly, and we do. Ultimately, the customer chooses which businesses survive. That is why we focus on serving their needs. We assume our competitors do the same."
Ironically, it was less than a month ago that MNB reported that the Washington State legislature is considering a proposal that would require employers with more than 50 employees to either provide a certain level of health insurance or pay an equivalent amount into the state’s basic health plan, which would then cover the workers.
The legislation is called The Health Care Responsibility Act, but it is better known around the state as the “Wal-Mart bill,” and was introduced because of reports that some large companies in the state – including Wal-Mart - have hundreds of employees getting state assistance for health care.
Cole has testified before the legislature that he believed the bill was a good idea. "If we can meet the requirements of the bill, then so can the solar system's largest corporation," he said.
Cole added, "It's getting to the point that good employers — and I like to think of myself as a good employer — feel like chumps for covering employees and dependents.”
- KC's View:
- We sided with Craig Cole a few weeks ago, and we side with him now.
Some will read his words and think that he is whining, that he is just one more retailer who couldn’t compete, and that he is using Wal-Mart as a scapegoat.
But nothing could be further from the truth.
Cole is operating, we believe, from the old-fashioned premise that employers have a responsibility for taking care of the health needs of all their employees. This makes them better, happier employees, which results in better, more responsible companies.
Nobody would argue, we suspect, that part of the problem is a health care system in this country that is completely out of control. Sure, if health care costs were cheaper, maybe it would be easier to provide health insurance for more people.
But Wal-Mart generates close to $300 billion a year in sales. It is alone, among companies, in having the economic clout to be able to do something, to provide more for its employees, not less, to make sure that everybody has health insurance, no matter how little or how much they earn. Hell, maybe what Wal-Mart ought to do is create a “Northern Exposure” scenario – offer to put hundreds of people through medical school but then those people have to put in, say, three or four years as staff doctors at Wal-Mart stores around the country, making sure that people who work there have proper and affordable medical care.
That’s just one idea. There are probably hundreds that would have little impact on the bottom line, but could have a tremendous impact on the national debate.
But that doesn’t seem to be the Wal-Mart way.
Former US Labor Secretary Robert Reich had an interesting column in the New York Times the other day in which he said, quite correctly, that Wal-Mart is just following the lead of its shoppers, who want cheaper and cheaper products. If shoppers wanted to support local businesses that provided better health care or paid their people better, then shoppers would patronize those businesses. But they don’t. They shop at Wal-Mart.
As Shakespeare once wrote, “The fault, dear Brutus, is not in our stars, but in ourselves.”
So, the argument goes, Wal-Mart really is only following the customer.
But maybe, just maybe, it is time for Wal-Mart to lead on this issue. Instead of creating road kill, maybe it is time to build roads.