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Safeway Labor Costs Eclipsed by Bad Management

by Michael Hiltzik for the LA Times Tuesday, Oct. 28, 2003 at 12:23 AM

(Found this on the union website.) Safeway Chairman Burd's royal screwup of the Dominick's chain acquisition cost the stockholders a billion dollars. Now he tries to balance his losses by cutting wages.

download PDF (75.7 kibibytes)

"...while Safeway pleads that the poor economy and changes in the supermarket business are the culprits for the profit crunch, Burd is starting to look like the guy who's been throug a few ugly divorces: the point comes when you have to wonder whether maybe he's the problem...."

"One possible trouble spot is Burd's scorched-earth approach to labor relations, which often boils down to his threatening store closures if he doesn't win. On occasion, this negotiating ploy has worked, although its obvious limitation is that Safeway might eventually run out of stores to close."

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Safeway already left town once before

by Meyer London Tuesday, Oct. 28, 2003 at 10:55 PM

They sold their southern California stores to Von's about 15 years ago and cleared out of the southern half of the state. Many of the stores were closed and many employees thrown out of work in the name of profit. Then they bought Von's a few years ago so they are back, calling themselves Von's. Would that they had stayed away. The local Von's in my neighborhood was originally a Safeway; it has been there since 1960 and was probably the first supermarket in the area. They have already announced that they may raze it in order to build a new store to attract yuppie and gentrify the neighborhood. Zowee. I can hardly wait.

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Safeway already left town once before

by Meyer London Tuesday, Oct. 28, 2003 at 10:57 PM

They sold their southern California stores to Von's about 15 years ago and cleared out of the southern half of the state. Many of the stores were closed and many employees thrown out of work in the name of profit. Then they bought Von's a few years ago so they are back, calling themselves Von's. Would that they had stayed away. The local Von's in my neighborhood was originally a Safeway; it has been there since 1960 and was probably the first supermarket in the area. They have already announced that they may raze it in order to build a new store to attract yuppie and gentrify the neighborhood. Zowee. I can hardly wait.

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Safeway's Return

by bread Tuesday, Oct. 28, 2003 at 11:00 PM

Wow! Businesses there to make a profit. I thought the purpose of businesses was to employ people. Who'd have guessed!!

Attract yuppies? Wow! Who would want to attract people with disposable income to a business? What is the world coming to.

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return of the Safeway bandits

by Meyer London Tuesday, Oct. 28, 2003 at 11:46 PM

Right - why would anyone complain about "urban pioneers" coming here, announcing that they are improving the atmosphere by their very presence, and driving out the current residents by sending rents and house prices through the roof? The more spoiled brats with Volvos the better, that's what I always say.

You are right in your assertion that corporations are here to get profits for themselves, not to provide jobs. That is just one of many reasons why they have to go. They would not exist in the first place if not for a creative, tortured interpretation of the 14th Amendment, which was intended to protect ex-slaves, not business vultures. The same Supreme Court that took rights away from the ex-slaves gave rights to these artificial "persons."

It is a pretty good bet that the offspring of the Safeway executives will never have to worry about getting decent health coverage with their cashier or stock clerk salaries. Their main worry will be whether the fraternities throw better parties at USC or Stanford.

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Socialism Is The Answer

by lovelyworld Tuesday, Oct. 28, 2003 at 11:53 PM

Wow! Grocery stores make rents go up. It has nothing to do with the increasing cost of maintaining rental property. Who'd a thunk it!!

Corporations should go so we can all live under marxism where everyone is the same and we are all one giant community. Won't that be wonderful! Everyone exactly the same, people who work hard and lazy asses, each receiving the same thing regardless of the fact that some produce and some don't. How beautiful!

Tell me more!

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what increasing cost of maintenance?

by more rational Wednesday, Oct. 29, 2003 at 11:00 PM

20 years ago, a plumber was around an hour. Today, they're around an hour. That's a 25% increase over 20 years. The cost of parts has gone up even less. What about rents? I remember a very nice 2 bedroom in the 80s was around 0. Today, a mediocre 2 bedroom is around 00. That's a solid 100% increase.

It's not expenses but demand that has gone up.

The maintenance cost of a unit is pretty low. I'd guesstimate that it's around 2 months rent, or 00 for a 2 br. This includes setting aside money for carpet, paint, complex maintenance, gardening, etc. The rest goes to pay the mortgage and other crap, as well as profit for the owner.

Landlords love gentrification!

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The maintenance cost of a unit is pretty low.

by landlord Thursday, Oct. 30, 2003 at 2:04 PM

I agree with demand causing prices to go up. That's natural. But maintenance costs are high. I've worked with several rental management groups. Most rental companies budget in the neighborhood of 25% of rental income to go towards maintenance. Natually as the cost of materials increase, thus the need to increase rents to offset.

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