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July 13, 2009


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The Great Disruption...

As far as I know your coinage hasn't caught on Jon, but if Robert Reich is right, it may will...

X marks the spot:

When Will The Recovery Begin? Never.

Fascinating stuff. The whole "market" vs. "city" thing is a great observation, although I feel that way in most "cities" in America.

I grew up right near the Bashas' on Dobson Ranch, but don't think I ever set foot in there. My mom was an Alpha Beta kinda gal!

Until people start patronizing local business, the trend will only get worse. Nice observation on "market" v. "city". How true. About Brooks, here is a true believer that has sat thru an entire dinner party while a Kook rub his inner thigh and did nothing. Enuff said.

Mr. Talton wrote:

"This is an unforgiving business with razor-thin margins."

And yet, Basha's is routinely more expensive, by a fairly large margin, than Fry's. That's one reason why I never shop at Basha's.

Basha's can't even blame the unions on that: the UFCW Local 99 represents about 16,000 workers at Safeway and Fry's. Both stores seem to be doing rather well, with plenty of stores. And Fry's is the most inexpensive of the three, routinely, though Safeway is beginning to offer competitive sales.

Basha's is being investigated by both the EEOC and the NLRB. Both agencies investigate/hear only cases which they believe have merit (in a technical, legal sense).

The EEOC is investigating accusations of pay discrimination against Hispanics (relative to Anglo employees). The EEOC had to sue Basha's to get them to cooperate in this investigation.

Last the NLRB found that Basha's engaged in unfair labor practices by closing stores (Basha's bought two unionized AJ stores and seven unionized ABCO stores), by altering health-care terms without informing the union, and by other means.

Another NLRB case already heard by a judge (but not yet decided) alleges that Basha's illegally tried to block workplace union organizing and retaliated against pro-union employees (more than 70 counts of this). Note that Basha's refused to negotiate with the union from the very start, and that, along with Basha's tactics and the inability of the union to organize Basha's workers despite their other successes in the industry, lends credence to the charge.

Note also that Basha's is filing bankruptcy under Chapter 11, reorganization. I suspect that one reason for this along with closing stores in working-class Hispanic areas is to undercut the union. I'm not sure whether union contracts are abrogated at the ABCO and AJ's stores but it wouldn't surprise me.

My reason for not shopping at Basha's is a simple one: on three separate occasions, I got home with spoiled food. This includes the Cottonwood & Prescott stores.

A few additional points.

First, the NLRB unfair labor practices ruling was handed down last year.

Second, the Arizona Republic recently published two stories on the issue, one relatively good one in the business section, and another (really poor) one in the main news section.

The latter uncritically accepted Basha's public relations line that the latest round of store closings (in working class, Hispanic areas) is due to the supposed emigration of undocumented workers, from Arizona to other states or back to Mexico, in response to the recession, thus leaving these stores "underperforming".

The problem with Basha's explanation is that these remain dense urban areas even if there are now a few less apartments renting 10 to a room. It isn't as though whole neighborhoods moved away, and the population density remains higher than in other areas where Basha's has stores but has no plans to close them.

More than a quarter of Arizona's population is Hispanic, and in traditionally Hispanic neighborhoods there remains a large core of Hispanic-Americans regardless of transient foreign worker populations.

These Basha's owned Food City stores are now riper for unionization, despite anti-union intimidation campaigns by the employer, than any Basha's owned stores have been; and court decisions stand poised to make union organizing easier there. That, together with the fact that Food City operates on a price scale closer to Fry's than to regular Basha's stores, makes them an obvious target for closure, from the standpoint of management.

The union has also, apparently, influenced some customers, through demonstrations and protests linking Eddie Basha with Maricopa County Sheriff Joe Arpaio, to stop shopping at Basha's owned Food City stores. Did this campaign have a serious effect? Did the union cut its nose off to spite its face, or would Basha have closed these stores anyway? The union view, on any substantive aspects of the battle, is basically absent from recent Arizona Republic coverage. Is this bias? Is the union failing to make its views known? Either way, it's losing the propaganda battle...

As for Eddie Basha himself, I've heard all of the teary-eyed encomiums -- about how Basha is a local boy made good, about his charitable works and civic activism -- but Basha inherited the chain from his father, and as far as I can tell his paternalism, civic involvement, and charity are little different from other tycoons, who traditionally seek to gain power and influence in local affairs while tossing a bit of largesse to the public by way of self-promotion and public relations goodwill.

I respect Mr. Talton and am willing to consider the possibility that he is better informed about Eddie Basha's civic involvement than I, but that's my take.

Interesting point. Its interesting that each city has its own market and can be doing better than another city during this time. If you want to start a business, you need to look at the market that you want to get into and make sure it is right for your business and allows an opportunity for success.

Damn, Office Space, that was some of the most subtle spam I've read in a long time.

Emil, it really is a travesty how merchants avoid low income communities. Poor people have little to no access to nutritious and affordable food and yet we're shocked(!) to learn that they have higher obesity and diabetes rates. And some clueless progressives think that taxing junk and fast food is an effective way to incentivize healthful eating, as though punishing the poor with yet another punitive sin tax will cause Costcos and Trader Joes to sprout up overnight in their communities.

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