by Reform 588 reform588@hotmail.com

RECENTLY AT A SHRINK meeting in Northern California an Albertsons official was heard saying that they were losing 35 million dollars a quarter in Northern California.  Of course, they overtly blamed the shrink on the vendors and employees. They want their managers to search the garbage for items that increased shrink.  All the other major grocery companies are staring to follow suit (as usual) and order their managers onto garbage patrol.

Playing the blame game after announcing that their earnings were down 20% in 2004 they cited hurricanes in Florida, sluggish business in Southern California and Texas, and changes in lease accounting for their woes.

How can a company lose this much money in the richest area in the world?

In reality and in quiet the management at Albertsons are starting to realize that their shrink is coming from the self-check out machines.  "They (the customers) have figured out how to steal from us" was one of the quotes coming from Albertsons Nor Cal upper management.  Their beloved cost cutting self-check out is starting to cost them big money.  Any clerk on the front end could have seen this one coming yet the fools at the top will never admit failure; especially after buying 4,000 of these machines.

Failure pays

Larry Johnson, after coming off a stint sat the homeland security advisory panel, (gotta keep those rebellious food clerks in check) found it necessary to cut hours to the bone in order to drive sales.  Do long lines and no help on the front end drive sales or drive customers away?  Larry, get a real job.  

Albertsons' CEO Lawrence Johnston saw his salary and bonus rise 68 percent last year to $3.3 million when compared with the year before. Add in restricted stock awards, and Johnston earned an average of $16.4 million a year since becoming CEO of the Boise-based retail grocery chain in April 2001.

During that same three-year period, the company has undergone tumultuous change. Johnston led a major restructuring in which the company closed 95 stores, two distribution centers and laid off 1,300 employees. The grocery chain also endured a four-month labor dispute with retail employees in Southern California that ended in February. And, the company's stock has fallen 5.4 percent over the three-year period ending in Dec. 31, 2003.

"We were not pleased with the performance we turned in during the fourth quarter," said chief executive Larry Johnson in a statement on the company's Web site. "We missed our earnings targets and that is unacceptable."

Not pleased?  How did they find it in their power to reward such failure with a raise?  Who is going to write him up?

Cutting costs

Albertsons has reduced costs since 2001 by more than $1 billion, plans to save an additional $250 million by the end of its 2006 fiscal year.   It didn't give details of how it would reduce expenses.

One can guess who is going to take the hit in additional cost cutting.  Some say they are going to close more stores in Nor Cal.  Some stores are not getting a store manger but are being run by the grocery manager.  It has been said that there is going to be only one manger for every three stores in some situations.

We, the workers, have seen their failures first hand.  If anyone wants to write up a story on the failure of Albertsons since the merger of Luckies let us know.  Notice how they merged with Shaws yet they are keeping the Shaws name.  Did they learn from their failure?  It would be interesting to see how you feel about how this company could find a way to lose money and business in the richest marketplace in the world.  

--E. D.