Ralphs and Food 4 Less Closing in Long Beach over $4 per hour additional required "Hero Pay"

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Re: Ralphs and Food 4 Less Closing in Long Beach over $4 per hour additional required "Hero Pay"

Post by CalItalian »

ClownLoach wrote: February 1st, 2021, 10:53 pm I have a feeling for the Ralphs closing - this was a way to get out from under a marginal store that will be cannibalized by the new Amazon Fresh opening down the street. It is a very old and established neighborhood that used to have every brand in a short radius, Stater Bros, Albertsons, Pavilions, Fresh and Easy, and if you went further up the Los Coyotes Diagonal you hit the Towne Center with Walmart and Sam's. What is odd is that about 15 years ago they expanded and fully remodeled that store, adding about 10K Sq ft to it. The neighborhood is established and reasonably high income. I'm willing to bet it is the kind of neighborhood where residents will protest the closure, so with the City passing the "hero pay" initiative they got a built in excuse to close and someone else to point at (instead of the competition).

As far as the store out on Carson goes, that was a redevelopment deal of a former Pacific Theaters drive in I believe. Those redevelopment deals died out after Gov. Brown shut down Redevelopment Agencies. Almost all of the retail centers built or remodeled in the late 90s/early 00's in Long Beach were from these agencies and locked in below market rent for decades to encourage businesses to move there. The only reason a store wouldn't make money at such bargain basement rents would be if shrink was too high. This is the same reason they kept the problematic Marina location on PCH open instead of the 7th St one - long term low rent made it cheaper to close the higher volume store (now a Target express) and try to train the customers to find the other location.
Just for the record, the closing Food 4 Less is an original Zody's. Not that we couldn't all tell it from the architecture.

The $4 "Hero Pay" doesn't affect Walmart or Target. This is quite unfair, selective which is being argued as part of the federal court case against Long Beach. See Los Angeles Times article below.

The timing to close these stores could be argued to head off today's Los Angeles City Council vote for their similar "Hero Pay" proposal of $5 per hour.

https://www.msn.com/en-us/news/us/kroge ... r-BB1diymF
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Re: Ralphs and Food 4 Less Closing in Long Beach over $4 per hour additional required "Hero Pay"

Post by steps »

Was this Ralphs an Alphabeta previously?

Judging by the reviews, that Ralphs has horrible customer service. Even comments from customers about the store manager being hard to work with. It looks like storage managment might be why this store was struggling.
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Re: Ralphs and Food 4 Less Closing in Long Beach over $4 per hour additional required "Hero Pay"

Post by CalItalian »

City of Los Angeles directs its city attorney to draft an ordinance for $5 per hour "hero pay" for large grocery and drug stores.
https://www.msn.com/en-us/news/us/la-ci ... r-BB1dky8H

https://www.nbclosangeles.com/news/loca ... s/2516907/

https://abc7.com/hero-pay-la-covid-los- ... /10253567/
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Re: Ralphs and Food 4 Less Closing in Long Beach over $4 per hour additional required "Hero Pay"

Post by storewanderer »

Bagels wrote: February 2nd, 2021, 6:28 am
In Southern California, Ralphs' pricing is universal, with very few exceptions (e.g. when a local Aldi's was undercutting the competition on eggs and milk, the nearby Ralphs matched their pricing). It'd be cost prohibitive to run an analysis on price hikes for a pair of stores, and adding a surcharge to each basket to pass along the hero pay probably wouldn't go very well. Plus, I wouldn't be shocked if both locations were marginal performers, anyway.
That is interesting, and that is a change from the past when there was a lot of zone pricing around SoCal across all of the major chains.

So they are very familiar with having many price zones down there in SoCal, all of the chains.

Based on the number of cities that are proposing these $4-$5/hr "hazard pay" increases for the grocers in certain states, these grocers can't close all of their stores. They just need to increase prices to pass this cost increase on to the customers and/or reduce services so they cut labor cost.

A surcharge on the baskets would not go over well with customers. Price increases are easier to hide.

I do find it interesting these city councils think they can single out a business and tell it to pay its staff $4-$5/hour more... but then I read this city ordinance does not even apply to Target or Wal Mart in Long Beach. What is the deal with that? I kind of get excluding independent grocers from it (it isn't fair... but I get it), but why are Target and Wal Mart being excluded? I really feel sometimes as if the "organizations" who are pushing this sort of thing secretly are trying to drive the unionized grocers out of business.

Back to Kroger again who somehow thinks it is a good idea to close 2 stores for good over this 120 day order in Long Beach, right as various other cities where Kroger has stores are about to impose similar rules, what about the stores Kroger is keeping open in Long Beach? They aren't closing every store in the city. They must have some plan to make this work with those other stores.

Los Angeles just passed the $5/hr order today. The California Grocer's Association seems to be upset the City Council is telling them how much they need to pay their employees. Well California Grocer's Association- maybe you should have fought harder to keep control over your business and its policies. Like when you let the city councils tell you that you couldn't distribute thin bags anymore and had to charge a bag fee for super thick plastic bags, oh but you have to give free reusable bags to anyone using food stamps/WIC. California Grocers Association- you made your bed, now follow the city council wage orders and just adjust your pricing and the consumers will probably pay for it all. Just like the bags.

City Councils dictate various "fees" that impact the operation of a grocer; property taxes, utility rates, and more. I am not sure the argument that the City Council has no business telling them what they have to pay their employees will stand. City Councils have come up with special higher minimum wages in given cities in the past. This will make for some very interesting lawsuits. In the mean time, there will be chains who continue to sell groceries in these cities and they will adjust pricing and labor to make this rule work. Kroger- needs to take a leadership position here. Closing stores which just hurts customers, employees, and small businesses surrounding said stores being closed, is not a leadership position.
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Re: Ralphs and Food 4 Less Closing in Long Beach over $4 per hour additional required "Hero Pay"

Post by ClownLoach »

steps wrote: February 2nd, 2021, 9:05 am Was this Ralphs an Alphabeta previously?

Judging by the reviews, that Ralphs has horrible customer service. Even comments from customers about the store manager being hard to work with. It looks like storage managment might be why this store was struggling.
I believe it was always a Ralphs, and I believe it was a company owned building. It was expanded around 2000 and remodeled to a strange decor that I would describe as a cut above the "regular" cheap decor Ralphs was using at that time (the white walls with "bolted" teal letters and cut plywood Ralphs logos) but not the "upscale" decor that predated Fresh Fare. You should have to see the graphics inside to understand what I'm talking about as it's a unique decor package I haven't seen anywhere else.
Again a weird store. The parking is a couple narrow strips of parking spaces. There isn't enough parking for it to do any kind of volume, and I can't believe that they ever got the expansion (and removal of spaces) approved. I think it has less than 50 parking spaces. So I think that there is a large contingent of neighbors who walk to shop for groceries that have been doing so for decades, and they probably would be the type to blast the Kroger executive offices with vocal complaints daily about their neighborhood store closing. The lack of rent probably kept the lights on such a marginal store, and no additional capital had gone into this box which is why it still has the white and teal interior. So now they found a good excuse to close it and blame the City of Long Beach for "forcing" them to close the store, meanwhile with a vacant former Medical Center lot behind it - I'm sure they have a deal to sell the building for demolition and probably will build new homes on both properties. And they get out before the Amazon Fresh down the street at the former Haggen opens in a few months. This must have been a massive expense to expand this older box prior to the Kroger acquisition. It was a full interior and exterior rebuild and it took almost a year to complete. But when they sell it I'm sure they'll be able to make up for all of those costs 20 years later...
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Re: Ralphs and Food 4 Less Closing in Long Beach over $4 per hour additional required "Hero Pay"

Post by HCal »

storewanderer wrote: February 2nd, 2021, 7:40 pm
Bagels wrote: February 2nd, 2021, 6:28 am
In Southern California, Ralphs' pricing is universal, with very few exceptions (e.g. when a local Aldi's was undercutting the competition on eggs and milk, the nearby Ralphs matched their pricing). It'd be cost prohibitive to run an analysis on price hikes for a pair of stores, and adding a surcharge to each basket to pass along the hero pay probably wouldn't go very well. Plus, I wouldn't be shocked if both locations were marginal performers, anyway.
That is interesting, and that is a change from the past when there was a lot of zone pricing around SoCal across all of the major chains.

So they are very familiar with having many price zones down there in SoCal, all of the chains.

Based on the number of cities that are proposing these $4-$5/hr "hazard pay" increases for the grocers in certain states, these grocers can't close all of their stores. They just need to increase prices to pass this cost increase on to the customers and/or reduce services so they cut labor cost.

A surcharge on the baskets would not go over well with customers. Price increases are easier to hide.

I do find it interesting these city councils think they can single out a business and tell it to pay its staff $4-$5/hour more... but then I read this city ordinance does not even apply to Target or Wal Mart in Long Beach. What is the deal with that? I kind of get excluding independent grocers from it (it isn't fair... but I get it), but why are Target and Wal Mart being excluded? I really feel sometimes as if the "organizations" who are pushing this sort of thing secretly are trying to drive the unionized grocers out of business.

Back to Kroger again who somehow thinks it is a good idea to close 2 stores for good over this 120 day order in Long Beach, right as various other cities where Kroger has stores are about to impose similar rules, what about the stores Kroger is keeping open in Long Beach? They aren't closing every store in the city. They must have some plan to make this work with those other stores.

Los Angeles just passed the $5/hr order today. The California Grocer's Association seems to be upset the City Council is telling them how much they need to pay their employees. Well California Grocer's Association- maybe you should have fought harder to keep control over your business and its policies. Like when you let the city councils tell you that you couldn't distribute thin bags anymore and had to charge a bag fee for super thick plastic bags, oh but you have to give free reusable bags to anyone using food stamps/WIC. California Grocers Association- you made your bed, now follow the city council wage orders and just adjust your pricing and the consumers will probably pay for it all. Just like the bags.

City Councils dictate various "fees" that impact the operation of a grocer; property taxes, utility rates, and more. I am not sure the argument that the City Council has no business telling them what they have to pay their employees will stand. City Councils have come up with special higher minimum wages in given cities in the past. This will make for some very interesting lawsuits. In the mean time, there will be chains who continue to sell groceries in these cities and they will adjust pricing and labor to make this rule work. Kroger- needs to take a leadership position here. Closing stores which just hurts customers, employees, and small businesses surrounding said stores being closed, is not a leadership position.
Well, there's no question that city councils have legislative authority. Barring preemption by state or federal law, the city has every right to legislate these things.

If there is a lawsuit, it's probably going to be on the basis of collective bargaining, which is covered by federal law. The stores will argue that the city is interfering with the contractual agreement between the company and the union.

I agree that the rule should apply to Target and Walmart, but perhaps they are not viewed as grocery stores (I don't think the stores in the city are designated as supercenters) but rather as general merchandise stores with a limited food selection.
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Re: Ralphs and Food 4 Less Closing in Long Beach over $4 per hour additional required "Hero Pay"

Post by storewanderer »

HCal wrote: February 2nd, 2021, 11:15 pm
Well, there's no question that city councils have legislative authority. Barring preemption by state or federal law, the city has every right to legislate these things.

If there is a lawsuit, it's probably going to be on the basis of collective bargaining, which is covered by federal law. The stores will argue that the city is interfering with the contractual agreement between the company and the union.

I agree that the rule should apply to Target and Walmart, but perhaps they are not viewed as grocery stores (I don't think the stores in the city are designated as supercenters) but rather as general merchandise stores with a limited food selection.
From what I am seeing, it would apply to Wal Mart and Target in Los Angeles.

As far as I'm concerned if they are going to pass these things it needs to apply to any retailer. Wal Mart, Target, Costco, mall stores; do not single out only unionized grocers and the unionized drugstore chains, that is not really right. All of the retail employees have the same exposures and risks as the grocery employees do.

Historically when the minimum wage increases bring wages above the pre-existing collective bargaining agreement what happens? Don't they just bring the lowest scale wage up to whatever the new higher minimum wage is? I suspect what happens in those cases is written into the agreements.

These stores also would be wise to be careful before these city councils decide to make this a permanent "wage increase" by setting a new minimum wage for these retail employees- which there is tons of this done in the past and it is clearly perfectly legal. These stores can fight this but I think they are best to just move on and recover the increased expense through price increases and labor cuts.

Though they have to be strategic with the price increases due to that CA price gouging law- cannot increase prices more than 10% from where they were when the pandemic started on various items.
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Re: Ralphs and Food 4 Less Closing in Long Beach over $4 per hour additional required "Hero Pay"

Post by pseudo3d »

With the already-high cost of operating in California and the already-high costs associated with COVID-19 (masks, new procedures, etc.) it shouldn't be too big of a surprise to see some stores collapse over it.

The bigger issue could be a topic in itself regarding the political aspect of all this and what the wage for grocery stores should be but it's extremely complicated, controversial, and goes much more beyond "unions" and "executives". Needless to say, this sort of discussion is banned and posts would be deleted and locked in short order.

I suppose within Kroger, you could make an argument from shifting around money between departments (including advertising) to save the two stores with jacking up prices state-wide, but the reality is if operating costs exceed profit, the store loses money. Period.

Still, considering these stores are closing permanently (not just until "further notice") and with the same sort of flimsy excuse that Kroger gave with some other stores (Houston), it makes me question if there's something rotten under the hood at Kroger. Are they a few months away divesting whole divisions like Albertsons two decades ago?
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Re: Ralphs and Food 4 Less Closing in Long Beach over $4 per hour additional required "Hero Pay"

Post by HCal »

storewanderer wrote: February 2nd, 2021, 11:32 pm Though they have to be strategic with the price increases due to that CA price gouging law- cannot increase prices more than 10% from where they were when the pandemic started on various items.
I am not a lawyer, but my understanding is that sellers are allowed to increase prices by more than 10% if it is attributable to their costs increasing.
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Re: Ralphs and Food 4 Less Closing in Long Beach over $4 per hour additional required "Hero Pay"

Post by HCal »

pseudo3d wrote: February 3rd, 2021, 2:30 am Still, considering these stores are closing permanently (not just until "further notice") and with the same sort of flimsy excuse that Kroger gave with some other stores (Houston), it makes me question if there's something rotten under the hood at Kroger. Are they a few months away divesting whole divisions like Albertsons two decades ago?
Kroger tends to close a few stores each year. Ralphs in particular has been shrinking for a decade now, if not longer. I wouldn't read too much into this.
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