Supermarket Ownership

[giantsfan2016]

There are many independent supermarkets. Some are truly independent and some are affiliated with the likes of IGA or ShopRite.  I told a friend of mine (he's in his 40's) that if I ever won the lottery I lottery I would like to buy a supermarket. I told my friend one of the first things I would do is give all the employees a raise. He said I would be out of business within 90 days. I told him that the store has an existing customer base, why would new ownership change that? He said because I would give all employees raises. - I disagree. I'm just making up numbers here, but let's say the store makes $5 million in profit every year. I'd be willing to take only $4 million in profit if it meant I could pay my employees better. If you ask me better pay equals better employees. - Am I wrong here?

[TheFugitive]

There is no way for you to actually know that without being able to see the books
and understand just what your fixed overhead expenses would be.  Generally when
you start to analyze that there are a lot of expenses baked into the cake that a casual
outside observer would not necessarily know about.  Back in 1993 when Hillary Clinton
was working on a national health care plan she was criticized for not being aware of those
costs, and consequently coming up with numbers that would have put a lot of people out
of business.  (She was famously quoted as responding "I can't be responsible for every
under-capitalized business in the United States").

Grocery in general is a very low-margin business.  Theoretically if the store were a sole
proprietorship, and the owner was willing to take less profit out of the operation, then yes,
he could voluntarily raise employee wages.  And this might actually be a good idea insofar
as it would reduce turnover and tend to retain some of the better employees.

I should qualify that as the store would also have to have a non-union workforce.
I worked for an independently owned grocery store when I was young, but it was covered
under a pre-existing union contract.  So the owner would not have been allowed to arbitrarily
give out raises that went around that contract.

[BillyGr]

I should qualify that as the store would also have to have a non-union workforce.
I worked for an independently owned grocery store when I was young, but it was covered
under a pre-existing union contract.  So the owner would not have been allowed to arbitrarily
give out raises that went around that contract.

Although one would hope that, if the owner was willing to pay the employees more and offered that to those in charge of the union that they would be smart enough to quickly re-do their contract to accept the extra pay...

[TheFugitive]

I should qualify that as the store would also have to have a non-union workforce.
I worked for an independently owned grocery store when I was young, but it was covered
under a pre-existing union contract.  So the owner would not have been allowed to arbitrarily
give out raises that went around that contract.

Although one would hope that, if the owner was willing to pay the employees more and offered that to those in charge of the union that they would be smart enough to quickly re-do their contract to accept the extra pay...

My experience working in a union shop was that they aren't nearly that smart.
They had agreed to some really, really bad deals from an employee's perspective
just to keep the dues money flowing to union HQ.

[giantsfan2016]

Okay. I have worked for both Union and non union companies. Sometimes the Union is good the Union is bad.

I started off my retail career at Shaw's Supermarket in Bristol, Connecticut. The Union Steward there was completely useless. He did not help me at all.  When I transferred to the Southington Shaw's it as the complete opposite. On my first or second day working at that store I was sitting in the break room and the Union Steward introduced himself and asked me if I had joined the union. I told him I had as I was a transfer from Bristol. He helped me a few times. My boss wouldn't give me Cashier training. She told me she thought I was too incompetent to be a Cashier without even letting me try. I contact the Union Steward and he told my boss she had to give me Cashier training and then see how I did as a Cashier. Another time a different boss tried to fire me over some bull s h i t. When I was going on break the cashier who waited on me missed one of the items that I was buying and I didn't pay for it. I didn't realize it until after I had eaten it on break. When my break was over my boss was working at the Customer Service Desk and I asked her if I could pay for it. She's like "Guess what, you're fired for stealing something!" I got in her face and told her either pick up the phone and call the Union Steward and tell him to come up here so I can talk to him or I'm going to the deli to go get him. She did. I explained to the Union Steward what happened and he said "Of course you're not fired. Mistakes happen." And he went on to rip my boss a new one. At time I quit (I really should've talked to The Union Steward I should've talked to him first) I had Health Insurance through the company, paid sick days, and 3 weeks paid vacation - and I was only a part timer. Not to mention several raises over the almost 5 years I was there.

The next place I worked was a non union company. I got a raise a few times. I was there long enough and got health insurance through the company.

The next place I worked also was a non union company. I started at a higher wage than most because I had previous experience. I got a raise after one year with the company with the promise of another raise after 2 years. After a year I qualified for health insurance through the company, but wasn't able to get it until open enrollment started. I ended up getting fired right around the time of open enrollment. I think I also had personal days and paid vacation.

The next place I worked no union and no raises, but I had paid vacation, personal days, and sick time.

My most recent job was at Stop & Shop. They are a union store. I started in October 2015 at minimum wage - $9.15/Hour. An extra $1/Hr on Sundays. When I completed my 60 day probation period and joined the Union I got a raise to $9.35/Hr. Minimum Wage went up on January 1st and I got a bump to $9.60/Hr. Another Union raise got me to $9.80 - Right before my 1 year with the company I got holiday pay along with Time and A Half on Sunday. I had sick days, personal days, and a week paid vacation. And I was allowed to double dip. I got paid for my week's vacation, but I also worked 3 or 4 days of my vacation as well. The Union Steward there was worthless. Once when I needed Union help I called store's Union Rep at the Union and she helped me. The  Union tried to save my job, but ultimately could not.  Now let me tell you one other thing that was messed up. My boss who is also a very good friend when he got his Union Raise in December 2015 he got bounced to $9.65/Hour. He thought that it was pretty good. When the minimum wage went up on January 1, 2016 to $9.60/Hour and all of a sudden he wasn't okay with $9.65/Hour. And I didn't blame him. Suddenly as boss he was only getting 5 cents more an hour than the Cart Boy. He got another Union raise when the new Union contact was ratified. Now when I was let go in November 2016, he was up to $13.25/Hour. He got promoted to full-time and that bounced him up to $14.70/Hr. However they cut all the new full time positions  as of December 2016 and he went back to Part time and was cut to $12.50/HR. That's less then what he had made as a part timer previously.

[shore72]

In my area every small town once had an IGA or Food Rite, usually owned by a local family. I can think of only a couple that remain, & they are owned by immigrants that work their butts off. One of the last "American" owned stores was about 75% staffed by family members. When a Food Lion opened up 10 miles away the business died a painful death. The numbers worked as long as you could count on folks coming in and filling their carts but increasingly it just became a convenience store to most customers. It was very rare, towards the end, to see anybody buying more than 1 bag of groceries. There are places where the model still works; you generally have to be a good distance away from any real competition. I do know of a couple larger independent stores in a resort area which have survived despite Giant & Harris Teeter moving in. High quality meats are one of their drawing cards.

Having been a small businessman, let me say: many, MANY of the businesses you know of are not nearly as successful as you might think. They might have lots of advertising & nice buildings but many are in hock up to their ears. For years I personally worked for less than minimum wage while paying my employees 3 times as much, including annual raises and bonuses. Every Friday I had to juggle numbers to make payroll, often making a run to the bank & taking yet another cash advance on my personal credit card so I could write those checks. The employees hadn't a clue.

[AmesNewington]

I think Wakefern needs to try some corporate owned ShopRite stores. Sometimes, I think corporate run locations are better to work for than individual owners/families.

[TheFugitive]

I should also add that here in Pittsburgh, at least back in the day when I had that job,
both the union local and a lot of the independent store owners were mobbed-up to the hilt.

The store where I worked was owned by a family that was very well-known for having mob ties.
Two of the sons owned stores, while the father was in charge of the local union!  The father
eventually went to prison for embezzling from the union.  The national union had to fire all
of the other officers of the local and take control. The son who owned the store I
worked for was always in and out of legal trouble (mainly for sexual harassment claims
involving female employees in his stores).

There was another independent owner in my old neighborhood whose store burned
down on 3 different occasions before nobody would sell him insurance any longer.

[BillyGr]

I think Wakefern needs to try some corporate owned ShopRite stores. Sometimes, I think corporate run locations are better to work for than individual owners/families.

They have about 35 that are corporate owned (OK, it's a wholly owned subsidiary of Wakefern, but still part of the company rather than an actual member).

http://newsroom.wakefern.com/wakefern/news/brett-wing-named-president-of-shoprite-supermarkets-inc.htm

The article states 34, but this is from Jan 2017 and I know at least one new one that opened locally in Dec of 2017.

There are a few scattered ones in NJ that are part of this (Spotswood, Clark and Passaic, plus Richmond Ave in NY were the first 4 locations in 1986, per what used to be on their site) and a big chunk of the rest is stores that they took over from a former member (Big V) in NY State (areas north of Westchester for the most part) and other stores they have opened in that area since (including their return to the Albany, NY area, which now has 5 newer locations, plus one in Hudson that has been around since the Big V days).