business news in context, analysis with attitude

...with brief, occasional, italicized and sometimes gratuitous commentary…

Reuters reports that “Starbucks will use some of the savings from the new U.S. corporate tax cuts to give domestic employees pay raises, company stock and expanded benefits with a combined worth of more than $250 million, the company said on Wednesday. With the announcement, the world's biggest coffee chain joins companies like Walmart, Apple, Comcast, and American Airlines in sharing their tax savings with employees. Starbucks is known for giving its workers, which it calls ‘partners,’ more generous pay and benefits than other mass-market restaurants and retailers.”

More specifically, “Starbucks said it will give hourly and salaried employees, who received pay raises in January, a second wage increase in April. It is giving additional stock grants to eligible employees on April 16. Coffee shop workers will receive a grant of at least $500 and store managers will receive $2,000 grants.

“Starting July 1, all employees will accrue paid time off to care for themselves and loved ones when they are ill. Starbucks said the national benefit was designed to match or exceed the benefits some partners were already due under existing city or state-mandated paid sick leave laws. Starbucks also expanded its parental leave policy for cafe workers, giving non-birth parents up to six weeks of paid leave when welcoming a new child.”

I wonder if it makes Starbucks chairman Howard Schultz - a social liberal who has been fairly critical of Donald Trump - a little bit nuts that a tax cut supported by the Trump White House is going to help him be more generous to his employees. On the other hand, I think this is what this tax law ought to be used for … so good for Starbucks.

• The BBC reports that in the UK, Sainsbury’s “ is changing the way it manages its stores across the UK and scrapping some management posts,” a move that could save million of pounds and result in the loss of thousands of jobs.

The story comes the same week as Tesco in the UK announced that “it was cutting 1,700 shop floor management jobs.”

I understand why this is happening - the growing market share of discounters Aldi and Lidl is putting a lot of financial pressure on mainstream retailers. I just hope they’re not trading effectiveness for efficiency, because inn doing so they’ll be trading away what should be one of their advantages.
KC's View: