Posted on 10/21/2003 12:35:40 AM PDT by ChemistCat
CROSS LANES, W.Va. — To find the cause of the nation's three supermarket strikes, just follow Judy Ranson's shopping cart.
An inveterate bargain hunter, Ranson used to chase down the best grocery deals at three stores: her local Kroger in Cross Lanes or down the road at a Fas Check in Dunbar and at a Poca Supermarket in Poca.
Now she makes one trip a week, to the Wal-Mart Supercenter, which opened five years ago a mile and a half down the road and across Interstate 64 from Kroger.
Ranson, who is 57, spends about $90 for herself and her husband. She estimates that she saves $40 to $50 off what she'd pay at the supermarket. "Kroger's prices are too high on a lot of stuff," she said. "I figure $100 ought to be enough to feed anyone for a week."
Officials at Kroger and the nation's other dominant supermarket chains — Ahold, Albertsons Inc. and Safeway Inc. — cite competition from Wal-Mart Stores Inc. and other box stores moving into the grocery business as a reason to hold the line on labor costs.
Those costs include health-care benefits that are the sticking point in United Food and Commercial Workers strikes of 3,300 workers at 44 Kroger stores in West Virginia, Kentucky and Ohio; 70,000 workers at three Southern California chains; and 10,000 workers at three chains in Missouri.
Similar struggles are expected within the next six months as UFCW contracts expire in the Phoenix and Washington, D.C., areas.
"Box stores are a very real threat," said Archie Fralin, a Kroger spokesman in Roanoke, Va. "Their lower labor costs make it imperative for us to manage costs. That's just a reality."
Wal-Mart doesn't break out earnings by division, so it's hard to calculate how much food it sells. But analysts say in just 10 years it has become the biggest player in the grocery business, last year capturing anywhere from 5 percent to 15 percent of the industry's $680 billion pie.
Traditional supermarket sales have dropped about 3 percent in the past year, estimates The Food Institute, a New Jersey-based trade group.
"The supermarket chains are still profitable, but executives see their market share down more than 5 percent over five years, and they're frightened," said George Whalin, president of Retail Management Consultants in San Marcos, Calif.
Lower labor costs for nonunion workers make up part of the advantage of box stores like Wal-Mart.
Including pension and health benefits, Kroger estimates it pays workers on average $6 an hour more in West Virginia than Wal-Mart. Burt Flickinger, managing partner of Strategic Resource Group in New York, says the difference in other parts of the country runs as high as $10 to $14 an hour for full-time workers.
At the Cross Lanes Kroger, striking UFCW workers say Wal-Mart's opening five years ago cost their store $100,000 in weekly receipts — between a third and a half of the store's income.
In response, workers say, Kroger has slashed the store's payroll from 86 to 45 full- and part-time workers.
"All we hear from management is 'Do more,' " said Kay Underwood, 49, a 29-year Kroger employee. "We did an employee survey, and the number of us on Paxil, Prozac, blood pressure medicines, you name it, has gone sky high. We're killing ourselves for this company."
Fralin wouldn't comment on individual Kroger store sales.
But he said industry studies show that Wal-Mart often takes as much as $100,000 a week from existing supermarkets, and he hypothesized that a store losing that much would see labor costs cut similarly.
Wal-Mart insists labor costs are just one part of a low-price formula that includes better purchasing logistics and information systems.
Analysts agree that the Arkansas chain's famously efficient ordering and distribution systems give it an edge, as does its clout in pushing for low wholesale prices. They also say supermarkets have room to improve.
"Most big chains went on a buying binge of smaller chains in the 1990s, and many of those acquisitions have not been fully integrated," said Mark Hamstra, editor of Supermarket News. "They still have costs to wring out from those buys."
Jim Lowthers is president of UFCW Local 400, which represents 30,000 food-industry workers in six states including West Virginia. He says his local has lost 5 percent of its members in five years.
"All these companies make billions of dollars, and all they want to say is 'Wal-Mart, Wal-Mart, Wal-Mart,' " he said. "They've joined together to say the only way to save is by reducing worker benefits. There's no reason they can't compete, profit and still take care of their employees."
Neil Stern, a partner with Chicago retail analyst firm McMillan/Doolittle, said he sympathizes with both management and workers.
"No one can say these retail workers are making too much money," Stern said. "At the same time, these companies are operating on an uneven playing field in terms of labor costs, and that can't continue."
Whalin calls the grocery industry invasion by box stores like Wal-Mart and Target, warehouse clubs like Costco and even drugstore chains like Longs a "sea change."
"Supermarkets have to do better at wringing the costs out of everything," he said. "But no matter what they do, in the long run they can't compete. Ultimately we're going to see fewer chains operating in each region — two, not three or four."
Do you have a source that these restaurants add preservatives to their food?
Well, when I worked there it was like 1984 without the snazzy jumpsuits. I was a literal slave from clock-in to 2 hours late clock-out.
Great place to shop, horrible place to work.
Don't you mean add food to their preservatives?
Seriously, it was awful. Being a minimum wage sales associate is like being a serf for management. You have to do whatever they say, so they take full advantage of it. Outlandish requests, forced overtime, haphazard schedules, verbal abuse, etc.
The lowest level of retail is usually bad in my experience, but Wal-Mart stood out for treating people like farm animals.
Source?
I just don't get the appeal of the WalMart "Superstores". I went in the new one closest to here soon after it opened. Why would anyone want to buy personal items they'll be wearing when the person in front of them is piling stuff like onions on the checkout counter?
Isn't there the danger of bugs and other stuff getting on other merchandise in the store, from the fresh foods? Yuck.
Good Lord, you are self righteous. Every post of yours, on every thread, DRIPS condescension.
How am I losing my dignity by shopping at Wal Mart? I buy all of my basics there because it works for me. I get my specialty foods at Whole Foods, my meat from a butcher, my seafood from the fish market, and my wine from a great little store in the French Quarter. Oh my, my dignity is in shreds because I buy my flour from Wal Mart...please get a grip.
I did.
Did Wal-Mart come to your home and put a gun to your head? No. But, more importantly, I think you exaggerate. Outlandish request? Like what? Demanding people show up on time? I've seen for decades the descruction of the work ethic and what you consider verbal abuse or serfdom is probably not getting time off on Friday night to attend a keg party.
No, what I saw was multiple managers dating associates against company rules and covering for each other so they could get away with it. I also saw people getting yelled for things completely beyond their control, such as the school supply aisle being a mess during the end of August due to heavy traffic.
If you had valid labor law abuses to complain about when you worked for them (and your job description also showed you aren't a rocket scientist and maybe their ridgid structure might have done you some good),
So that's why I'm in graduate school.
then you should have gotten a lawyer and sued them or went to the labor board in your state.
Listen, I worked for them during the summer to make some extra cash. Had I intended to stay there, that would have been something to consider, but as it was, it wasn't worth my time.
The particular Wal-Mart I worked at a few summers ago was awful compared to the other retail jobs I have worked. It wouldn't surprise me if others were better run.
Next time I (stupidly) went into another Chili's, and it took over half an hour to get my salad. The reason they gave was they hadn't unpacked that delivery yet. I complained about the wait for the guaranteed fast lunch, and got more free coupons. I gave them to someone who looked borderline homeless. <^..^>
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.