business news in context, analysis with attitude

One MNB user wrote yesterday, reacting to Tuesday’s defeat in Oregon of the proposed mandatory GMO labeling law…

“Oregonians said that they preferred a national GMO labeling law rather than a state or regional law. The problem is that big money at the national level is thwarting any GMO label disclosure laws. So, we are seeing groups go to the states to enact these laws. Its sounds similar to the way we created the national organic standards that recently went into effect. First there was the organics standard that the state of California enacted. Oregon had its own organic food labeling laws too. If we had waited for the federal government to make this law first we might still be waiting. But the states motivated the national them to do it! Perhaps this is what we are seeing now with the GMO laws. Either way, it seems incredible that we have to go to such lengths to ask manufacturers what is in the food we are eating!”

We think this kind of message is typical of consumer sentiment…and of the kinds of questions that consumers will be asking in the long term. Which is why labeling is not only inevitable, but good business.

The email continues to pour in about the Safeway-Dominick’s situation.

MNB user Tom Fawkes wrote:

“Just so the folks in Chicago don't feel singled out by Safeway and their outrageous behavior with regards to Dominick's , Safeway is playing the same game throughout North America.

“In Thunder Bay, Ontario, Canada Safeway recently closed the three stores it owned in the market because its employees refused to accept concessions to wages and benefits. So make no mistake the company will close the Dominick's stores in a heartbeat.

“In British Columbia, Safeway employees are facing the same threats as the Dominick's employees. Safeway has decided to compete in the market on the backs of its employees rather than provide a better store with better products that will meet the needs and demands of consumers.

“I can understand how annoyed folks are about the unacceptable changes being made by Safeway to the local grocery store, but their are 8,900 people whose jobs are on the line in Chicago. These are people who raise families, buy houses, buy cars, and contribute to the economic well being of their communities. Safeway cares no more about them than they do about their customers.

“Safeway has set in motion the same scenario wherever it has stores. We will see it roll out time and again over the next year. At the end of the day, Safeway may find that its employees are more determined to keep what they have than give in to the bully.”

MNB user John Shepherd, who is VP/Chain Relations at the National Association of Chain Drug Stores (NACDS) wrote:

“If Safeway has indeed threatened to pull out of Chicago if the union doesn't work with them you can bet that's their intention. Further, any comments about how they operate Dominick's miss the point.

“Anyone who has watched Steve Burd's labor relations over the last decade knows he does not make empty threats. He does the math, develops the facts, shares them with the union leadership, and pretty much says that's it.

“The key is what Steve Burd has said. The union leaders don't have to like him but shame on them if they don't respect him. If there's a strike, they haven't been listening and their stakeholders will be hurt.”

It doesn’t sound like there will be a strike…either the union capitulates, or the stores close or are sold. End of story. And if Safeway does back down, it’ll lose all credibility when it makes threats like these, which doesn’t strike us as something it is likely to do.

MNB user Lew de Seife wrote:

“What does the furor over Dominicks/Genuardi's/Randalls say about centralized category management and purchasing?

“I remember reading how the computer now gave the centralized chains an advantage over those retailers who bought locally. But first you need to analyze the data on a local level.

“Retailers don't like one size fits all treatment from manufacturers.

“Obviously consumers don't like one size fits all from retailers either.”

Good point.

Finally, we got two wonderful emails yesterday that came in within seconds of each other, with each recommending that we start forwarding these columns about Safeway and Dominick’s to specific people.

MNB user Thomas Hayes wrote:

“Why don't you just forward these comments directly to Steven Burd, Chairman and CEO of Safeway?

“I'm sure he would love to hear from Chicagoans on his "Grand Plan".”

And MNB user Tom Russell wrote:

“Maybe you should forward all the views on Dominick’s to the acquisition team at Ahold.

Excellent ideas, both of them.

While our privacy policy prevents revealing our e-mailing list to anyone, suffice it to say that we can assure you that these columns are being read by all the right people.

And on that note, we’ll see you tomorrow.
KC's View: