Kroger and the fallacy of zero sum economics

[Vic]

Kroger will close more stores over hazard pay laws for workers

Kroger will close two stores in Seattle over the city's $4-an-hour hazard pay requirement for grocery workers, an escalation of the grocery chain's push against newly-passed hazard pay laws growing on the West Coast.

www.cnn.com

Kroger is closing QFC's in Seattle due to the city's $4/hr hazard pay requirement for large grocery stores in the city, citing "razor-thin margins in a very competitive landscape." That statement by Kroger, and not that this a poor PR decision, is what I would like to focus on here. Kroger is trying to convince the public that this wage increase would somehow impact Kroger disproportionately when, in fact, it would affect their competitors the same. Which means that Krogers could easily increase prices in those stores to cover the additional labor costs, secure in the knowledge that their competitors must do the same.
So what is Kroger gaining here besides making a statement against its own employees? Nothing. And in exchange, they are giving up valuable market share to their competitors. Because just as it was unlikely that Seattle residents would have driven to Bellevue to avoid a hazard pay surcharge on their groceries, they're also not driving to Bellevue just to shop at a Kroger's. They're just going to shop at Whole Foods or Albertsons. Permanently.
Now I'm not saying that this is the beginning of the end for Kroger. It's probably not. But what this does represent is the fallacy of zero sum economics that has dominated corporate America for decades and which is getting destroyed by the new generation of risk-taking customer-centric corporations, such as Amazon, Tesla, etc, which are steadily rising to dominance, and will continue to do so, with increasingly new players following that model rising in entrenched industries.
Anyway, the moral of the story here is that you shouldn't be so focused on the bottom line that you stop serving your customers, because your competition isn't likely to be that foolish.

 

[MavericK96]

I always found QFC to be overpriced compared to Safeway, etc. So this makes even less sense, other than greed.

 

[Vic]

I always found QFC to be overpriced compared to Safeway, etc. So this makes even less sense, other than greed.

QFC has always been positioned as a Whole Foods competitor, really.
IMO Kroger management is not smart. They lost the bulk of my business a while back when they decided to charge a debit card fee. The prices and selection at their stores are already not great, so why would I pay them an extra fee that their competitors don't charge? Seems to violate the principle of substitution, paying more for the same thing. But at the same time, they're unwilling to increase their prices, and are instead giving up valuable market share, in a situation where all their competitors are forced to do the same. That's some grade A stupid right there.

 

[Fanatical Meat]

Why does nearly every business target the lowest end customer possible these days. How can their margins be so poor that they cannot afford this, how many employees inside the store at any given moment 15(?), that’s and extra $60 per hour. They have to average 100 transactions an hour. They literally can not afford a $60 per hour charge.
Why operate with such tiny margins and act like that’s a successful plan. Overall I say good close up and make room for someone who has a sustainable business plan. Your pushing low end shit 24/7 is just fucking up the market.

 

[MrSquished]

Why does nearly every business target the lowest end customer possible these days. How can their margins be so poor that they cannot afford this, how many employees inside the store at any given moment 15(?), that’s and extra $60 per hour. They have to average 100 transactions an hour. They literally can not afford a $60 per hour charge.
Why operate with such tiny margins and act like that’s a successful plan. Overall I say good close up and make room for someone who has a sustainable business plan. Your pushing low end shit 24/7 is just fucking up the market.

It's a circular firing squad to the bottom where the sacrificial lamb is always labor.

 

[Lanyap]

More to the story? The media attention seems to make it more nefarious than it really is. They were planning to close these two underperforming stores anyway. I don’t like people losing their jobs during the pandemic but this type of action happens in the grocery store business. Looks there is a Safeway almost across the street in one of the locations.

QFC said Tuesday it would provide the required pay to employees at all 15 of its Seattle stores, including the two locations slated for closure in April.

QFC To Close 2 Seattle Stores, Citing City's Hazard Pay Ordinance

QFC said Tuesday it would fast-track the closure of two "underperforming" stores after Seattle mandated $4 hourly hazard pay.

patch.com

 

[Zorba]

Businesses always like to blame decisions they were going to make any ways on government. Happens all the time.

 

[brycejones]

record profits is a reason to screw over "essential" workers.

 

[Bitek]

And they can make a warning shot to other cities of they are thinking about the same thing

 

[Jhhnn]

Meh. The two stores aren't making money in the first place & there are many other QFC locations in Seattle whose workers will get the hazard pay. It's not a good reason to rag on Kroger, imo. Stuff like this happens all the time anyway.

 

[MrSquished]

More to the story? The media attention seems to make it more nefarious than it really is. They were planning to close these two underperforming stores anyway. I don’t like people losing their jobs during the pandemic but this type of action happens in the grocery store business. Looks there is a Safeway almost across the street in one of the locations.

QFC To Close 2 Seattle Stores, Citing City's Hazard Pay Ordinance

QFC said Tuesday it would fast-track the closure of two "underperforming" stores after Seattle mandated $4 hourly hazard pay.

patch.com

Did you also believe tobacco companies when they swore up and down smoking was harmless? Or the oxycontin guys who swore up and down in promo materials to doctors and consumers that oxy was totally not addicting?

 

[shortylickens]

Why does nearly every business target the lowest end customer possible these days.

Thats where the money is.
The middle class is dying.
The upper class never spends much of their money.
The lower class is scraping by living paycheck to paycheck, they give up 99 percent of their income.
Thats where you go when you wanna get sales.

Remember: Walmart is the richest store franchise on planet earth.

 

[s0me0nesmind1]

They will close it because of ridiculous bureaucratic requirements that you attempt to jam down their throat as a means of demanding unskilled labor is worth x - even though it isn't actually worth that. You simply can't demand wage worth, the world of economics doesn't work that way sugar

 

[Jhhnn]

They will close it because of ridiculous bureaucratic requirements that you attempt to jam down their throat as a means of demanding unskilled labor is worth x - even though it isn't actually worth that. You simply can't demand wage worth, the world of economics doesn't work that way sugar

Which doesn't explain why they're leaving ~15 other Seattle locations open with hazard pay, does it?

qfc locations seattle - Google Suche

If you knew what you're talking about you'd be dangerous.

 

[IronWing]

They will close it because of ridiculous bureaucratic requirements that you attempt to jam down their throat as a means of demanding unskilled labor is worth x - even though it isn't actually worth that. You simply can't demand wage worth, the world of economics doesn't work that way sugar

Fuck off, fascist.

 

[NWRMidnight]

They will close it because of ridiculous bureaucratic requirements that you attempt to jam down their throat as a means of demanding unskilled labor is worth x - even though it isn't actually worth that. You simply can't demand wage worth, the world of economics doesn't work that way sugar

You are a god damn idiot!

 

[ivwshane]

They will close it because of ridiculous bureaucratic requirements that you attempt to jam down their throat as a means of demanding unskilled labor is worth x - even though it isn't actually worth that. You simply can't demand wage worth, the world of economics doesn't work that way sugar

I guess you got tired of not hearing how stupid you are so you decided to post this piece of crap. Your grasp of economics is pretty piss poor and sounds like you've grown up with Republicans shitting their failed economic policies in your brain.

Stay stupid, although that's a given.

 

[Vic]

They will close it because of ridiculous bureaucratic requirements that you attempt to jam down their throat as a means of demanding unskilled labor is worth x - even though it isn't actually worth that. You simply can't demand wage worth, the world of economics doesn't work that way sugar

Someone didn't read the OP.

 

[shortylickens]

its funny watching conservatives try to explain "economics" when they clearly do not understand it at all.

PSA: You dont learn economics by listening to Rush Limbaugh 5 minutes a week.
The reason HE'S rich and you're not is he knows things that he will never share, like feeding people bullshit is the easiest way on earth to get paid.

 

[IronWing]

Kroger goes the extra mile to be dickheads every time. They treat their employees like crap, doing the ever changing schedule thing that prevents their employees from making plans for anything, they never open enough lanes, and their sales always have a catch. F those guys.

 

[Vic]

More to the story? The media attention seems to make it more nefarious than it really is. They were planning to close these two underperforming stores anyway. I don’t like people losing their jobs during the pandemic but this type of action happens in the grocery store business. Looks there is a Safeway almost across the street in one of the locations.

QFC To Close 2 Seattle Stores, Citing City's Hazard Pay Ordinance

QFC said Tuesday it would fast-track the closure of two "underperforming" stores after Seattle mandated $4 hourly hazard pay.

patch.com

That media attention is coming from Kroger telling the media that the hazard pay requirement is the reason for the closures, and not because Kroger is getting their ass kicked by their competition in a highly affluent market.

 

[Lanyap]

Did you also believe tobacco companies when they swore up and down smoking was harmless? Or the oxycontin guys who swore up and down in promo materials to doctors and consumers that oxy was totally not addicting?

No, I never smoked or chewed. My father smoked cigs and died of lung cancer when he was 62. I was around his second hand smoke for a number of years. I’m almost 65, I hope to live a little longer.

I may have taken some type of opioids prescribed by a doctor for severe pain after surgery but I only took them for a short time until pain was gone. I don’t remember any of my doctors pushing oxy on me.

I wouldn’t compare these with QFC closing two under performing grocery stores in Seattle.

 

[MrSquished]

people like that asshole think there should be a permanent working class living in poverty so they can live in a world of rules designed by 19th century capitalist robber barons.

 

[brycejones]

You are a god damn idiot!

That's an insult to idiots.

 

[MrSquished]

No, I never smoked or chewed. My father smoked cigs and died of lung cancer when he was 62. I was around his second hand smoke for a number of years. I’m almost 65, I hope to live a little longer.

I may have taken some type of opioids prescribed by a doctor for severe pain after surgery but I only took them for a short time until pain was gone. I don’t remember any of my doctors pushing oxy on me.

I wouldn’t compare these with QFC closing two under performing grocery stores in Seattle.

I wasn't being literal. It's just a cautionary tale of don't believe everything the corporate overlords tell you. They will literally kill you and anyone you love to sell more of their product - whether it's cigarettes or drugs, whether it's their plants spewing out harmful chemicals into your neighborhoods, whether it's their product containing harmful ingredients. Fucking over a few employees for a few bucks to prevent a larger scale realization that they all deserve more money is like child's play to them.