business news in context, analysis with attitude

On the subject of the cost of health care in the US, which Starbucks chairman Howard Schultz has been addressing of late, one MNB user wrote:

A few years ago I heard Howard Schultz speak at a foodservice conference. He delivered a powerful presentation about his business philosophy. It included why he offers health care to all of his employees. His father was disabled in a work-related accident without any benefits. Schultz talked about coming away from that experience with a profound sense of responsibility. When he got the opportunity to be a CEO and his company grew to be significant, he delivered on what he had learned. What a great legacy for a leader. If you ever get an opportunity to hear him speak, don't miss it.

I saw part of the healthcare dialogue on CNBC earlier this week. Jim Sinegal of Costco was also a participant in the CNBC panel. Thank goodness we have visionary CEO's out there like those at Costco and Starbucks.

One MNB user had an answer for Starbucks’ concerns about rising health care costs:

The answer to their medical benefits package -"Self Insure", especially if they are spending 200 million a year.

Another MNB user wrote:

There is no doubt that there is a Health Care crisis in the U.S. But if you want to see other alternatives, all you have to do is look beyond the country’s border. In Canada and Europe, Universal Health Care is provide by the state not the company. It is viewed as a right not as privilege of the rich. Now to have that it is not cheap. Taxes (personal and corporate income taxes, national sales taxes, etc.) all goes towards paying the health care costs. However, in total it is less per capita than what the U.S. pays. So the only question is "What type of society do the Americans want?" You can have a true "Free Market Society" where you cut taxes for the rich and let everyone fend for themselves, or you impose taxes to provide a minimal of Universal Health Care to all Americans.

Until they politicians make the first decision, no real solution is possible.

MNB user Karen James wrote:

Just read the piece on Starbucks and healthcare and you are right, what’s it going to take for the American public, business and government to stop seeing nationalized healthcare as a communist plot?

The US has one of the most expensive healthcare systems in the world because of the multiple bureaucracies needed to run each private care company – imagine rolling it into one agency, administered at the state level.

The pool of money would then go to health care itself instead of health care administration. Canada’s system isn’t perfect and for some inexplicable reason governments have chosen to starve it for money in the past decade but everyone has access to healthcare including my 90 year old aunt who received quickly received an MRI at no cost to herself, within a week.

Frankly, while shocked that 47 millions Americans lack healthcare, we Canadians have mixed feelings about having universal healthcare south of the border. It makes the US operations the GM’s of the world less cost efficient that their Canadian counterparts (think of General Motors healthcare legacy costs bringing it to the edge of bankruptcy). Because our system is government run, with low admin costs dispersed to each citizen and not absorbed by private industry we can more than compete with any US corporation that has a strong union to deal with.

Hillary Clinton was reviled when she introduced fresh thinking into the debate a decade ago, but she was right and failure to act has cost US big business big time.

We have to be honest. Based on what we’ve seen over the past few weeks, rolling all the nation’s health care bureaucracies into one agency administered at the state level doesn’t seem like such a hot idea.

Then again, Michael Brown is looking for a new gig. And he’s probably about as qualified to do that as he was to run FEMA.

Speaking to Wal-Mart’s decision to buy a large number of hybrid cars, MNB user Steve Sullivan wrote:

And maybe if Wal-Mart and other large volume purchases buy enough of them, the hybrid cars will become more mainstream and the retail price will come down enough so us working folk can afford them.

Another MNB user wrote:

Wal-Mart forgot to mention that by putting so many of its competitors out of business, that will all the unemployment it causes, it reduces traffic on the highways since unemployed workers will probably be staying home and not driving. It annoys me when a company makes statements about ecology when they are just trying to save money and only by coincidence these actions are better for the environment.

On one subject that keeps on coming up (and likely will continue to), MNB user David Livingston wrote:

I have to agree with your assessment of the Albertsons situation. It will be difficult to get a serious offer for a chain with "also rans" market share positions and sales per sq. ft. performances that are consistently well below their trade area averages. I am finding it very rare that Albertsons will have a sales per sq ft above the average of all the other stores nearby. The supermarket business is very competitive and buyers don't like to have to start out at a disadvantage. There are some bright spots like Jewel in Chicago, however Albertsons has fallen off the radar screen in many large markets around the US.

Another MNB user wrote:

I have spent 30 years in the grocery business, the last three with Albertsons' and I can assure you that this management team does not only not get it, it never had it. If you posted a mission statement that said "We will screw our employees and rip off our customers", how long do you think that the doors would remain open? In essence this is how
Larry Johnston runs a business. I have yet to see one supervisor who has been either qualified or trained for the position that they are in. As for all his technological innovations, most of them I have seen in other chains 10 years ago.

The merchandising and the layout of the store you mentioned does not surprise me. I would be willing to wager that you could find 60' of Albertsons' canned tomatoes, but not what you really wanted. Private label comes first, followed by aisles of cheap junk from the drug side of the company, American Stores. You're right, the selection in the stores is horrible, and the prices are out of sight. On items such as pop, chips and beer, the convenience stores here in Arizona are cheaper than Albertsons.

The only hope for this company is to sell the whole thing, gut the management, and get a team that is not only smart but aggressive. This last bunch was none of the above, let alone competent.

Didn’t you get the memo?

Another MNB user wrote:

The unfortunate issue with the Albertsons sale is Bristol Farms, purchased by Albertsons about one year ago. Bristol Farms was a great retailer, creating an exciting and differentiating offering. I would guess that much of the creativity and customer effectiveness and the people that made them what they were are already gone, due to the Albertsons acquisition. Now their fate will be at the hands of financial people, who probably haven't shopped for food in a supermarket in a while and for sure don't understand the value of the Bristol Farms' customer and brand asset. After all, they aren't that big!

Too bad!! It only took one year!!! RIP!

We hope not.
KC's View: