What Stores Will Close?
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What Stores Will Close?
If the proposed agreement is accepted by the voting members, how many and what locations will the grocers close to "pay" for the deal?
Will the grocers use the reason that those locations have gone "negative" due to the higher cost of operations - labor costs included? Kroger's first quarter ends at the end of April, while Albertsons first quarter ends at the end of May.
If they choose to close any locations, best to complete this right away before the end of their respective fiscal quarters and get these stores off the books and into the non-performing asset column.
Still waiting on a tentative agreement from Gelson's and the unions.
SO_CAL_RETAIL_SLUT
Will the grocers use the reason that those locations have gone "negative" due to the higher cost of operations - labor costs included? Kroger's first quarter ends at the end of April, while Albertsons first quarter ends at the end of May.
If they choose to close any locations, best to complete this right away before the end of their respective fiscal quarters and get these stores off the books and into the non-performing asset column.
Still waiting on a tentative agreement from Gelson's and the unions.
SO_CAL_RETAIL_SLUT
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Re: What Stores Will Close?
Will they close any locations? I think they at this point have picked off the low hanging fruit on closing locations. Maybe we will see locations close as leases come due or spaces redevelop but I don't see any wholesale/mass scale closures resulting from a new contract.SO_CAL_RETAIL_SLUT wrote: ↑April 5th, 2022, 1:58 pm If the proposed agreement is accepted by the voting members, how many and what locations will the grocers close to "pay" for the deal?
Will the grocers use the reason that those locations have gone "negative" due to the higher cost of operations - labor costs included? Kroger's first quarter ends at the end of April, while Albertsons first quarter ends at the end of May.
If they choose to close any locations, best to complete this right away before the end of their respective fiscal quarters and get these stores off the books and into the non-performing asset column.
Still waiting on a tentative agreement from Gelson's and the unions.
SO_CAL_RETAIL_SLUT
But had they gone on strike, I am sure the damage done, would have caused some mass closures.
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Re: What Stores Will Close?
Maybe they could reduce the pay and benefits of the C-suite first and THEN reduce some payouts to shareholders "to pay for it".
After all they seem to have done pretty well pre through post Covid.
After all they seem to have done pretty well pre through post Covid.
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Re: What Stores Will Close?
It seems the corporate offices can't ever understand how they end up in the position where they are on the defense against employees or employee organizations. Yet we see story after story of companies that reward stockholders and the corporate office before they reward the employees who actually interact with the customer. Those are the employees that make the customer experience positive (or not) and have a strong influence on whether the business continues or not. I am all for the capitalistic system. However I think the company has a responsibility to not only its shareholders and leadership but to those who are closest to the customer and interact with them on a daily basis. Pittance raises, constant complaining about health care and closing stores or divisions to pay for labor costs only antagonizes the employee/company relationship. Wall Street loves its profits. But if the company doesn't love (or at least like) its employees back the gravy train is going to end. I have not worked in a union job and I'm torn and the pros and cons of a union shop. However given where we've been in the last few years and where we are now, it does not surprise me that we are seeing a bit of a resurgence in the unions. A lot of people will say if you don't like your job, go get one that you like or where they treat you better. But if the same structural issues exist across an industry what does going elsewhere do? There isn't an easy answer to the overall problem. But I do think that the top needs to be more aware of the bottom. Where the are the animosity between the two might lessen to the point of seeing some mutual benefit.
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Re: What Stores Will Close?
I'm not going to disagree with the fact that the C-suite is overpaid, but...by how much, really? I did the math a while back, and if the CEO didn't take the big $6.5 million raise and instead distributed it to employees (465k according to some numbers), it would equate to maybe an extra $14 per person per year. If it were only Ralphs (27k), then it goes up to around $240 per person per year...you could play around with numbers but it would seem to me that there's not really enough to go around just by breaking into the C-suite's piggy bank.
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Re: What Stores Will Close?
Remember that accounting for leases changed late last year. As a result there is a much greater impact on the bottom line due to requirements to depreciate the store - a closing effectively hits the earnings twice. This change is probably what saved many retailers from going bankrupt coming out of the first COVID impacted holiday season - they are basically allowed to book a leased store as an asset now even though the real owner of the building is also booking that asset. And they can basically say the store is worth whatever they want it to be worth. This falsely props up balance sheets but has saved most of the retail industry.
The implementation of this early 2021 is probably why they all did some minor culling of stores around that time before the law changed, using whatever excuse was needed to get it done (like when Kroger needed to use the excuse of COVID hazard pay to close a Long Beach area Ralphs that had previously only stayed open despite low volume because of loud complaints from local residents). They're not going to close stores as a result of any labor agreement unless the lease is up and they were already leaning towards closure but the slight percentage increase pushed the store over the cliff. All you have to do is read their SEC Filings to understand how insignificant labor expense really is to them. They just make a big deal of it when they need to throw their weight around with the Unions.
The implementation of this early 2021 is probably why they all did some minor culling of stores around that time before the law changed, using whatever excuse was needed to get it done (like when Kroger needed to use the excuse of COVID hazard pay to close a Long Beach area Ralphs that had previously only stayed open despite low volume because of loud complaints from local residents). They're not going to close stores as a result of any labor agreement unless the lease is up and they were already leaning towards closure but the slight percentage increase pushed the store over the cliff. All you have to do is read their SEC Filings to understand how insignificant labor expense really is to them. They just make a big deal of it when they need to throw their weight around with the Unions.
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Re: What Stores Will Close?
I think it just falls back to, they have already closed so many stores.
Driving around SoCal you used to see a Vons, Ralphs, or Albertsons all over the place; every few blocks it felt like. Now these stores are in many cases 2-3 miles apart. And usually in that 2-3 mile "gap" area you will see multiple Sprouts, Whole Foods, Bristol/Gelson/Lazy, ethnic grocers, or Wal Marts housed in spaces that previously had a Vons, Ralphs, or Albertsons.
Driving around SoCal you used to see a Vons, Ralphs, or Albertsons all over the place; every few blocks it felt like. Now these stores are in many cases 2-3 miles apart. And usually in that 2-3 mile "gap" area you will see multiple Sprouts, Whole Foods, Bristol/Gelson/Lazy, ethnic grocers, or Wal Marts housed in spaces that previously had a Vons, Ralphs, or Albertsons.
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Re: What Stores Will Close?
That sort of math does not explain or excuse the problem.pseudo3d wrote: ↑April 6th, 2022, 4:16 pmI'm not going to disagree with the fact that the C-suite is overpaid, but...by how much, really? I did the math a while back, and if the CEO didn't take the big $6.5 million raise and instead distributed it to employees (465k according to some numbers), it would equate to maybe an extra $14 per person per year. If it were only Ralphs (27k), then it goes up to around $240 per person per year...you could play around with numbers but it would seem to me that there's not really enough to go around just by breaking into the C-suite's piggy bank.
In 2020, the ratio of CEO-to-typical-worker compensation was 351-to-1 under the realized measure of CEO pay; that is up from 307-to-1 in 2019 and a big increase from 21-to-1 in 1965 and 61-to-1 in 1989.
I believe it is worse than the above.
The C-suite and their trumped up qualifications and dismal performance do not deserve more than 25-to-1.
And they still would be wealthy!
Last edited by veteran+ on April 7th, 2022, 7:16 am, edited 1 time in total.
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Re: What Stores Will Close?
ClownLoach wrote: ↑April 6th, 2022, 10:20 pm Remember that accounting for leases changed late last year. As a result there is a much greater impact on the bottom line due to requirements to depreciate the store - a closing effectively hits the earnings twice. This change is probably what saved many retailers from going bankrupt coming out of the first COVID impacted holiday season - they are basically allowed to book a leased store as an asset now even though the real owner of the building is also booking that asset. And they can basically say the store is worth whatever they want it to be worth. This falsely props up balance sheets but has saved most of the retail industry.
The implementation of this early 2021 is probably why they all did some minor culling of stores around that time before the law changed, using whatever excuse was needed to get it done (like when Kroger needed to use the excuse of COVID hazard pay to close a Long Beach area Ralphs that had previously only stayed open despite low volume because of loud complaints from local residents). They're not going to close stores as a result of any labor agreement unless the lease is up and they were already leaning towards closure but the slight percentage increase pushed the store over the cliff. All you have to do is read their SEC Filings to understand how insignificant labor expense really is to them. They just make a big deal of it when they need to throw their weight around with the Unions.
AMEN!!!!!
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Re: What Stores Will Close?
Ratios become more meaningless under larger companies (if it was a small company, ratios would naturally be much closer), and are tied to worker compensation. Under your 25:1 solution, if a typical Kroger employee made less than $30k a year, then the CEO would make something akin to $800k a year, but that's assuming that raises or inflation never happen. If system-wide employee raises take in affect, that cuts into the bottom line that much more.veteran+ wrote: ↑April 7th, 2022, 7:13 amThat sort of math does not explain or excuse the problem.pseudo3d wrote: ↑April 6th, 2022, 4:16 pmI'm not going to disagree with the fact that the C-suite is overpaid, but...by how much, really? I did the math a while back, and if the CEO didn't take the big $6.5 million raise and instead distributed it to employees (465k according to some numbers), it would equate to maybe an extra $14 per person per year. If it were only Ralphs (27k), then it goes up to around $240 per person per year...you could play around with numbers but it would seem to me that there's not really enough to go around just by breaking into the C-suite's piggy bank.
In 2020, the ratio of CEO-to-typical-worker compensation was 351-to-1 under the realized measure of CEO pay; that is up from 307-to-1 in 2019 and a big increase from 21-to-1 in 1965 and 61-to-1 in 1989.
I believe it is worse than the above.
The C-suite and their trumped up qualifications and dismal performance do not deserve more than 25-to-1.
And they still would be wealthy!
The fact is, given Kroger's immense size, a seven-figure raise is not going to mean much if it was redistributed toward other payroll. The numbers are all out there in their annual reports; you can play armchair accountant all you want.
EDIT: Keep in mind that the seven-figure raise would be a VERY different issue if layoffs were happening everywhere in the company, divisions were being cut loose, the stores are starved of capex, and the stock price is plummeting. But they aren't.