retail news in context, analysis with attitude

In a discussion yesterday about employee compensation and the minimum wage, I expressed my enthusiasm for employee ownership programs that give workers skin in the game.

MNB reader Randy Evins responded:

Hy-Vee, Winco, Publix, and to a certain increasing degree HEB are all fantastic examples of ESOP success. It’s an engaging idea (pun intended) but each of these companies has the luxury of not dealing with restrictions imposed by union contracts. A meat manager at HEB is compensated based on evaluations and performance, not on contract rules negotiated by some board on each side.

The real issue is defining a living wage, a wage that a person can life their life on, and in some areas of the country, (like California and Washington state) $15 bucks an hour doesn’t even come close. Companies are stuck giving up that lower role to folks that are not going to stay, either high school kids or transitionary types that have no thoughts or desire to move up the chain. The part time focus and two tiered wage structure are also career killers and now there’s a distinct leadership void as companies look to the future.

The answer isn’t simple but if you look to the above mentioned companies there’s some good insights on how ESOP (versus private equity) can be a part of the solution.

Another company to look to in this light is Costco…..still remember Jim Senegal telling the Wall Street crowd that he really didn’t care if they liked his labor metrics, buy the stock based on results and let Costco run the company as they see fit. If you only care about myopically focusing on a single metric and can’t see the subsequent benefits that an engaged and passionate workforce brings, then Costco doesn’t really need/want your money…Great leadership has a way of cutting to the real stuff.



 

I was both sarcastic and critical yesterday of Walmart’s decision to have its Sam’s Club division use Instacart to make deliveries, since this is the same company used by rival Aldi.

One MNB reader pointed out another problem with the move:

I’m sure Walmart thinks it makes perfect sense to use the same delivery service for Sam’s Club that is being used by Costco for its stores. Yep, makes total sense.

Under the column heading 'What were they thinking’?


Agreed.

And, from another reader:

KC I totally agree with you about the dangers of outsourcing delivery to Instacart. What are all these companies going to do when 1 large company buys it? It's just a matter of time, imo.  Especially a competitor. Then it's back to square one for them, where you don't want to be.
KC's View: