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2007-06-14
Detroit, MI. Farmer Jack: Another Grocery Chain Starves

Nowhere has Wal-Mart's impact been more visible than in the food industry. When Wal-Mart began opening up superstores almost twenty years ago, the grocery industry looked very different, with sales leaders who no longer sit on top. Wal-Mart is now the largest grocer in the U.S., but its rise has added little value to the economy, since groceries bagged at Wal-Mart merely displaced groceries sold at other existing supermarkets. Sprawl-Busters has written often about the labor losses suffered as a consequence of this Great American Food Fight. Not only have thousands of jobs been lost -- but those which remain at Wal-Mart are lower-pay jobs than the ones they replaced. The latest in this long food chain of casualties: Farmer Jack. This week Sprawl-Busters received the following message from a correspondent in Michigan: "An unfortunate update from Detroit. Our 83 year old local unionized grocery chain, which was bought by A&P in 1989, is closing or selling all 66 stores by July 7. Approximately 5,100 United Food & Commercial Workers members will lose their jobs at Farmer Jack. They cited unfavorable market trends." In April, 2007, the media carried stories about the owner of Farmer Jack, the Great Atlantic & Pacific Tea Co., making plans to sell the 66-store supermarket chain by the end of the summer. Most Farmer Jack stores are in metro Detroit. A&P said at the time that it was reviewing a number of bids for the stores. A&P said the stores would be sold in groups, and that poor sales were the cause for the sell-off. A&P CEO Eric Claus told the Detroit News at the time, "While this is the correct action for A&P, it is also a difficult one. We appreciate their (employees') efforts and commitment as well as the patronage of our shoppers and regret that ongoing market conditions and other priorities necessitated this action." No one stepped forward to buy the whole chain, so A&P tried to sell them piecemeal. The company had negotiated with the UFCW to cut wages two years ago to help Farmer Jack, but A&P had "other priorities" than protecting Farmer Jack, which it owned for less than two decades. At least two large food distributors had been named as potential buyers for the Farmer Jack divestiture. One shopper summed up the potential loss of Farmer Jack to the Detroit News: "I hate that it (might close). I think it's bad for the neighborhood, but that's how things are going for the city -- everybody's moving out."


What you can do: On its corporate website, Farmer Jack explains its mission: "customers are learning that Farmer Jack is much more than just a supermarket: we're a neighborhood grocer... With the successful consolidation of all area A&P stores under the Farmer Jack name, and a stepped-up advertising and marketing program, shoppers are gaining a new appreciation of everything the store offers. These efforts have resulted in Farmer Jack's current #1 market share, and a continued development plan to assure market leadership." A&P now says all stores will be closed or sold by the end of the first week in July, and that stores which are not bid upon will simply go dark. The store's parking lots have been jammed in recent weeks as they began liquidating their inventory. One Farmer Jack in Detroit would not say if competition from Meijer and Wal-Mart was the reason for the chain's demise, but it was certainly not because consumers stopped eating. Most Farmer Jack locations were only a few miles from a Wal-Mart supercenter. A&P in the 1930s was America's largest grocery store chain -- with more than 5 times the number of stores than Wal-Mart has today. A&P was the major target of an anti-chain store movement in the late 1930s that resulted in more than 30 states passing special tax laws on chain stores. In 1979, A&P sold the majority of its stock to a German investor. A Farmer Jack employee told The View newspaper in Michigan, "This economy is scary. We're hoping for a miracle or to be hired by whoever buys the company. These are good people. Any company would be lucky to have us." In trade for Farmer Jack jobs, employees can now apply at Wal-Mart, where they can expect lower wages, and thinner health care benefits. Farmer Jack is no longer in the field, and grocery competition in Michigan is the worse for it. For related stories, search Newsflash by "grocer."










 
 
"Norman has become the guru of the anti-Wal-Mart movement" ~ 60 Minutes

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