business news in context, analysis with attitude

Yesterday, we had a story about how Safeway Canada has gotten injunctive relief to prevent locked-out workers there from blockading a food warehouse and ice cream plant while the retailer hires replacement workers. Some 350 employees have been working without a contract since last December; reportedly objecting the company’s desire to have them work a 40-hour week (rather than the current 37 hours), not to mention the pay and benefits packaged offered by management.

My comment: It is hard to imagine, in these economic and competitive times, that anyone would have the temerity to object to a 40-hour workweek. Maybe the Edmonton employees haven’t noticed, but pretty much everyone is having to work harder and longer just to maintain their positions. It is time to join the 21st century, where employees in some countries would work a 40-hour work day if they could.

A couple of different reactions to this…

MNB user Jeff Folloder wrote:

I suspect that the topic of unions will ignite another round of spirited discussion that accomplishes little. While I do understand the historic need for union activity, I just don't see the modern relevance. The burden of union negotiated excess has effectively grown to the point where it broke the back of the automobile industry in North America. Is the food industry next? You stated "pretty much everyone is having to work harder and longer just to maintain their positions." Not if you are union. It is fairly apparent that it is time for a change. Perhaps a more meritocratic approach?

But another MNB user disagreed:

Why not a 60-hour workweek at minimum wage for everybody but management? Management can work for 80 hours per week at $100 per hour then retire wealthy. By increasing the work week to 40 from 37 Safeway Canada can eliminate one job for every current 11 workers. Won’t that be wonderful for everyone? Before jumping on management’s bandwagon perhaps you could tell us what the rest of the offer to the workers contained as to salary and benefits. What will Safeway’s wage and benefit package be for the new employees? I do not know where the union pay started or what they refused to sign but it would be nice to know before accepting your take on this issue.

It is wonderful that you have been able to create MNB and live very well off of it, and send your kids to college. I wonder if that is what these terrible union members would like to be able to do. Perhaps workers in warehouses and offices should not be able to earn enough to send their children to school so that Safeway and the stock holders can profit a bit more. I respect your personal achievement. You are not one of those who have to work any harder, and yes I realize that you must have worked hard to get where you are – HOWEVER, it may not a good thing that everyone has to work harder and longer to make less, except for the “corporations”.

While it is true that we don't know what the executives at Safeway Canada are making, it is my perception that pretty much everybody these days is working harder and longer than ever. Sure, some are better compensated than others…and others clearly are over compensated. But I think it is a mistake to think that many senior executives are working three days a week and playing more golf than ever…because that doesn’t seem to be the case.

I fervently believe that companies perform better when management and labor function in a kind of partnership, and I believe in profit sharing – it gives everybody more skin in the game. But I also believe that in the 21st century, when people in a lot of countries are willing to work 12-24-16 hours a day just to have jobs, debating about whether a 40-hour work week is appropriate seems a little out of touch. Everybody has to work harder and contribute…and be rewarded appropriately.

For the record, I live in a union household. Mrs. Content Guy is a tenured third grade teacher, and is a member of a union. So I am not without sympathy for union members…but that does not mean that I would resist discussions about a longer school year, for example. I would argue that she would need to be better paid (but then again, most teachers deserve to be better paid, but also should be rewarded for effort and achievement, not just length of service), but have no problem with talking about the value of a greater number of school days.

We referenced yesterday a piece in Time about Walmart’s latest efforts to dominate the retail scene…which led MNB user Richard Layman to write:

The problem with the Walmart business model is for other businesses and for extant commercial districts is unlike the anchor store concept employed by department stores and supermarkets--they advertised a lot, bringing in customers, who in turn shopped at other nearby stores, which justified breaks on rent--Walmart wants 100% of the dollars in the wallets of the consumer. There is no room for any other store in that type of business model.

It’s only a problem if you’re not Walmart.

On the subject of nutritional labeling and obesity issues, MNB user Mac Riggan wrote:

A few years ago I came up with the idea for a tax credit for the purchase of fresh fruits and vegetables (FFV’s)and all canned and frozen FFV’s as long as they do contain added salt or sugars.

Prevention is less expensive than cure and as the government winds up footing the health care cost eventually why not act preventively by rewarding good eating habits. Sorta the opposite of the sin tax on smokes and liquor.

The credit would be capped at say $2500 expenditure per year on FFV’s per family. Lots of detail missing here, but the bottom line is we are eating ourselves to death. If you don’t buy it at the supermarket it won’t wind up in your kitchen. And if it’s not in your kitchen, you can’t eat it.

And, MNB users continue to weigh in on the debate about whether supermarkets ought to be carrying branded products, like a new Burger King french fries line, that build brand equity for companies competing with supermarkets for share of stomach. One email:

I always have your back on the issue of retailers carrying brands that compete for share of stomach…retailers should not do anything that can help build a competitor’s brand. Take Dunkin’ for example: With no brand presence west of the Mississippi, they decided to launch their coffee at supermarkets before they rolled out 10,000 new locations to help build some brand equity. So retailers didn’t just fail to fight…they paved the way for Dunkin’s success.

Saying things like “people will always eat out” or “who cares if it’s Ore Ida or BK fries” is a defeatist attitude. People have not ALWAYS eaten out. It is the failure of supermarkets to simplify, provide and educate about other solutions that has led to almost 50% of food dollars going to the likes of Burger King. As supermarkets have allowed themselves to become purveyors of other brands instead of their own brand they have become homogeneous…even commoditized. Restaurants and fast feeders know that many supermarkets can be their own worst enemy. Try the reverse some day…maybe Walmart should approach Burger King and ask them to carry Great Value fries as an alternative on the menu…”after all, who cares if it’s BK or Walmart fries” as long as we sell fries?

The debate is not about BK fries, the question at hand is when will supermarkets decide that they stand for something instead of falling for everything?


Another MNB user wrote:

I am guessing that the only connection Burger King has to these "Burger King" brand fries is that Burger King has licensed their trademark to the manufacturer for a fee. A backpack with Hannah Montana on it is still just a backpack. Consumers will quickly discover that these frozen fries are more like any other frozen french fries than they are to what they experience at a Burger King restaurant. The impact on people wanting to go to Burger King might even be negative. You don't see McDonald's licensing their name for store bought frozen fries - maybe for that reason. The main reason Burger King brand fries even get space in the supermarket freezer is probably the slotting allowance. Check and see if they are still there next year at this time.

If you’re right and slotting allowances are the reason these fries are going into supermarkets, then you’ve added to my case. Short-term priorities lead to short-term thinking…and I’m making a long-term, hardball, take-no-prisoners competitive argument here.
KC's View: