Published on: March 31, 2022
Got a number of emails yesterday about two stories that ran on MNB…
First, we took note of a Des Moines Register report that in a 12-minute video posted to an internal communications platform, Hy-Vee CEO Randy Edeker addressed the recent layoffs of 121 corporate/headquarters employees by saying, ""The reality is, and I never lose sight of the fact, this office does nothing."
Edeker made the point in the video that he is trying to make Hy-Vee more store-centric … that he is cutting back on e-commerce operations and centralizing it in fewer stores … and that the company's foodservice operations will put a greater emphasis on breakfast and lunch to regain pre-pandemic momentum.
All of which seemed to make sense to varying degrees, but I questioned the tone of statements like those saying that headquarters personnel "do nothing," and that if they don't want to work in the stores, "I don't want them to be a part of the company"? And that he finds such sentiments "offensive?" I wasn't sure these were the best messages to send, and that they created negative, rather than positive, energy.
One MNB reader wrote:
From your comments it sounds like you are already hearing a lot on Randy Edeker's video on the layoffs, though I wanted to pass along my thoughts as I started my career 25 years ago working my way up at Hy-Vee, with my mom and step dad both working in Hy-Vee's HQ when it was located in Chariton IA.
I started off in the bakery at Hy-Vee in Omaha while in high school and then worked my way through other departments, working full time, during college before being promoted to assistant manager my last 2 years in college and being accepted into their Store Director training program in 2001. I ended up leaving Hy-Vee after I graduated as I got an offer from Procter & Gamble that was double that of Hy-Vee's even after working 5 years with them.
Now that I'm in a headquarters role for another CPG company I do look back at all the things I learned while in store at Hy-Vee but could never go back to working retail, even if the pay was the same as my current job. Store work was physically & mentally exhausting with 10-12 hour shifts on your feet on hard concrete dealing with hundreds of customer and employee issues. I couldn't keep up with that physically or mentally.
I wonder how many of the 102 employees that were offered retail roles have only said yes while they get their resume updated and start interviewing with other companies, or will soon be after a couple of weeks in a store role.
Randy's comment on "the office doing nothing" as having been on many family holidays as a kid where my mom and step dad both had to take time to work to make sure Hy-Vee stores got the products they needed or a find a missing load of lettuce it shows how disconnected from the reality of his HQ employees Randy has become.
Your comment about HQ people being there to support the people in the stores is spot on, as I've seen it across many companies that both sides (HQ & Sales) forget how much they rely on each other. Comments like "HQ is just sales prevention" or "Without us there wouldn't be anything to sell" get tossed around at many companies, it is the truly great companies that have both groups aligned on a common goal and vision that outperform their competition. When your CEO is driving a wedge between these groups, instead of being the visionary that bring them together, it is a recipe for low moral and issues to come up that will only lead to Hy-Vee losing many of their great HQ people.
MNB reader Cindy Sorensen wrote:
Randy Edeker's comments took me back to 1983 when I was young in my career. It was our annual region meeting. Our region manager was speaking to an audience of about 80 sales people. It was a time when my employer was purchasing several smaller food companies. With so many new brands in our portfolio, our workloads had definitely increased. Everyone was a little stressed, tired and a bit overworked. Our region manager faced the team and said the following: "I know we are putting a lot on your plates, but if you can't handle it, we'll just find people with bigger plates." I've never forgotten his comment and that was nearly 40 years ago.
The sad thing about his comment is that it was true; at the time, the U.S. was experiencing an unemployment rate of nearly 10%. My employer could have replaced any one of us in no time at all. There's no doubt it helped to build a strong work ethic on my part....but at what cost? There was definitely a personal cost to be managed with such fear. I rarely felt my work was valued, but instead felt I was being constantly critiqued by management to identify weak spots in my performance which maybe they thought someone else could do better. The leverage was definitely in the hands of the employer to demand from the workforce unreasonable objectives in demanding environments.
Randy Edeker is within a few years of my age; I have to wonder if some of his attitudes were developed in those early days of his careers in the 1980's when things were much, much different in the attitude towards, and treatment of, employees. I was surprised to hear such words from a CEO in 2022, especially in our industry when we need to be recruiting, hiring and creating a work environment which promotes retention of employees, not one that runs them off because they do not feel valued for the work they do.
Edeker is 59, which makes him about eight years younger than I am. But I'd like to think that with age comes the ability to evolve, to understand that what might have seemed effective and/or appropriate when I was younger simply won't work or is in any way acceptable today.
From another reader:
I agree 100 % with you. I would not want to work for Mr. Edeker. One of the things he misses is the other 50,000 employees watch how he treated the 121 impacted ones and project that on themselves. He seems to think that everyone is disposable and should thank God everyday that they have a job at Hy-Vee. He also seems to have that attitude about customers, like tough we are no longer do online shopping at your store. I don’t want to offend anyone, but it sounds more like a CFO attitude, rather than an Operations/ Customer focus one.
He needs a key person that he trusts to help him filter his communications. The very same message could have been delivered in a much more sensitive manner.
Lastly, some years ago working for Pathmark, we participated in share groups with Hy-Vee and I was very impressed with them. I don’t think the founders would agree with his approach. This is not the way to build the culture that leads to success.
And from another reader:
Edeker added: "Nobody in the country makes money on e-commerce the way it is done today. So we've got to figure out, how do we control the costs. Some customers are not going to be happy, but strategically, there's no choice. We probably literally waited about nine months too long."
Right now it is obvious that to control the costs most shift them to those who drive to and from the store and spend the time to do their own shopping, and then spend more time waiting in line to check out.
I worked retail for a few years earlier in my life. It was enjoyable except for the constant unreasonable demands from the suits at the corporate level.
We also had a piece about a Wall Street Journal report that "billionaire activist investor Carl Icahn is seeking two board seats at Kroger Co., pushing the U.S. supermarket giant to make changes among its pork suppliers and to address what Mr. Icahn said was a widening gap between worker and executive pay."
MNB reader Joe Gilman responded:
This is rich, no pun intended, coming from Mr.Icahn. He made his fortune without concern for workers.
I am old enough to remember pictures of him cracking open the front door of his home and telling TWA flight attendants to “go back to work” as he was in the process of firing them for going on strike.
This is not to say that he is wrong about Kroger, just curious if this posturing or a true change of heart.
Not sure what Icahn makes a year, but he's reportedly wroth about $15 billion.
There's a line quoted in "The Godfather" that goes, "Behind every great fortune there is a crime."
Not necessarily a legal crime, of course. Sometimes it is a moral, ethical crime.
Another MNB reader wrote:
Thank you for your article on Kroger pay and animal welfare. After I retired from the food industry( mid-level management at high profile companies) , I got bored and decided to get a part time job at Kroger. Never in 46 years have I seen people so mistreated for such meager pay ( or any pay for that matter)! Unconscionable!
And, from another reader:
Kroger…how much will the new board members whom Mr. Icahn is nominating be paid to be part of Kroger’s Board of Directors? Is he nominating current Kroger store associates?
Not to my knowledge. Good point.