Grocery Update #42: Grocers Get Gritty In South Philly
Also: Ten Bills To Support Food Workers. Border Patrol Rounds Up Farmworkers.
Discontents: 1. Socal Wildfire Resources. 2. Border Patrol Starts Rounding Up Migrant Farmworkers 3. Grocers Get Gritty In South Philly. 4. Ten Bills to Create Dignity and Safe Working Conditions for Food and Farm Workers. 5. Tunes.
1. SoCal Wildfire Resources.
The Checkout Grocery Update stands with the communities in California impacted by catastrophic wildfires. Our friends at UFCW 770 in Southern California have put together a comprehensive list of resources for the tens of thousands of people impacted, in both English and Spanish.
2. Border Patrol Starts Rounding Up Migrant Farmworkers
Acres of grape fields sat unpicked in Kern County (CA) this week as word of Border Patrol raids circulated through Messenger chats and images of federal agents detaining laborers spread on local Facebook groups.
The Border Patrol conducted unannounced raids throughout Bakersfield on Tuesday, descending on businesses where day laborers and field workers gather.
“We are taking it to the bad people and bad things in Bakersfield,” the El Centro Border Patrol said in response to a comment on its Facebook page.
“People are freaked out, people are worried, people are planning on staying home the next couple of days,” said Antonio De Loera-Brust, director of communication for the United Farm Workers.
“We’re in the middle of our citrus harvesting. This sent shockwaves through the entire community,” said Casey Creamer, president of the industry group California Citrus Mutual, on Thursday… He pushed back on the Border Patrol’s claims they’re targeting bad people. He said they appeared to be general sweeps of workers.
“If this is the new normal, this is absolute economic devastation,” said Richard S. Gearhart, an associate professor of economics at Cal State-Bakersfield.
Agriculture comprises about 10 percent of Kern County’s gross domestic product and undocumented workers may comprise half of the workforce, he said. And the Central Valley provides about a quarter of the United States’ food.
“So, you WILL see, in the long run, food inflation and food shortages,” he wrote in a text message.
3. Giant Gets Gritty In South Philly.
I am not sure what motivated Ahold-Delhaize’s Giant division to open a store in South Philly, but it was a good idea. The corner is busy and vibrant, rapidly gentrifying with new development around a diverse, working class area, just south of Italian market and Chinatown. I love Philly, it is like alt-New York for me, pre-Giuliani-police state, pre-Bloomberg-finance-bro era, stuck somewhere between 1987 and 1995 vibe-wise, not always safe, but with a real street wise attitude and blue collar sensibility. Great food. Great book stores. Gritty. What a jawn.
This corner of South Philly is a busy retail market, with a small format Target across the street and a vast Sprouts flagship store in an old, historic building up the block. The Target has a limited selection but deep discount pricing on many pantry items and household necessities, cheap for urban Philly but not on par with suburban discounters. Lots of stuff in locked cabinets, good luck finding a clerk with a key when you need a razor or tampons. But the store is still popular and frequently packed.
The big Sprouts on South Broad is hit or miss. This location of Progressive Grocer’s retailer of the year can look great somedays, with a deep local and new item CPG selection, premier placement of bulk foods, including plenty of confections and snacks, twin-lined organic and conventional produce, and many compelling promotional markdowns and private label items. But some days the shelves are half empty at mid-day, with close-dated packaged meat, questionable produce, half empty bulk bins, and questionably high prices on many familiar center store pantry items and health and beauty aids, as well as a sweet-sickly, rancid smell that indicates the presence of the wrong kinds of microorganisms in hard to clean corners. The store may be inconsistent, but the “healthy” vibes and non-judgmental marketing of Sprouts also means it is usually packed, and seems to be a real neighborhood shopping destination. So with sharper pricing, a broader selection of conventional, natural and organic products, a strong private label assortment, freshly rotated produce, a skilled-full service meat case and an experience, unionized workforce, Giant may have opened a gritty gold mine in South Philly.
Giant has the third largest grocery market share in the Philly area at around 13% share, trailing Walmart (16.6%) and Albertsons’ Acme division at 15.7%. Philly is a relatively diverse grocery market, with two club chains (Costco and BJ’s), many independent, regional grocers such as Mom’s, Wegman’s, ShopRite and Fresh Grocer, and a number of other national chains such as Trader Joe’s, Whole Foods, Aldi and Lidl. On a national level of market share, Ahold-Delhaize, (Ahold), lags behind behemoths such as Walmart, Kroger and Albertsons, but it is no slacker on the East Coast. It’s various divisions dominate their locales, such as the New York City metro and southern New England (Stop & Shop), Maine and Vermont (Hannaford), the I-81 corridor and Carolina Piedmont (Food Lion) and much of Pennsylvania and DelMarVa (the two Giant divisions).
Ahold’s different banners each have their own flavor of Big Supermarket, that on first glance can be reminiscent of any Randall’s, King Soopers or QFC, with vast runs of center store consumer packaged goods assortments, multiple tiers of private label and occasionally edgy emerging, natural and specialty brands, but primarily featuring all of the usual Big Food/Big CPG suspects, such as vast runs of Frito Lay snacks, cookies and crackers from Mondelez, Hershey and Mars chocolates, Coke and Pepsi soft drinks, Kellogg's and General Mills cereals, Unilever ice creams and ConAgra frozen meals, and various industrial scale baked goods from Flowers Foods and Bimbo. This is still grocery, my friends.
The stores are plastered with sale signs and markdown tags because Ahold is a classic “high-low” retailer, with a major strategic focus on promotions and impulse purchases in center store, by far the largest and most profitable department. Brands spend heavily to promote at Ahold, with placement fees, invoice discounts, slotting fees, retail media expenses, physical couponing and digital offers galore. And centralized category management and merchandising decisions mean well-resourced brands can provide syndicated data, market research and their own category insights to justify their space on shelves and provide value above and beyond the internal data metrics that Ahold category managers can review on their own. Some lucky brands even get to play category captain and help steer the ship in their given area of the store for a given amount of time. Retail is not rocket science. It is not pretty, but there is a method to the madness.
Some divisions lean more heavily into natural and organic foods and special diets, such as plant-based, gluten free and keto/Whole30, such as many Stop & Shop locations in upper income suburbs, while the Southeast’s Food Lion is a powerful discounter and volume driver on par with HEB or Rouses for value pricing and stack ‘em high, watch ‘em fly merchandising. Out of all of the Ahold-Delhaize’s divisions, Food Lion is probably the toughest competitor and most compelling merchant, especially considering the encroachment by discounter and mass merchants in their catchment areas.
Giant and Giant in the mid-Atlantic are middle of the road grocery retailers, with plenty of compelling prices to fend off Walmart and keep Aldi at bay, while also catering to many of the upper and middle-income suburbs with plenty of higher attribute and premium selections that play off well against Whole Foods and Trader Joe’s. Many newer Giant stores feel more like a Wegman’s or Harris Teeter, large and voluminous, with broad runs of produce, big value signage and full displays, with well-lit, bright and lively aisles, fresh smelling perimeters, and a busy ambience. On the perimeter, the stores have large, well-stocked produce departments, big and fully packed full-service meat cases, and commissary and third-party produced baked goods and prepared meal sections. The divisions all share in Ahold’s private label brands, which form defensive value tiers in dozens of categories, with brands such as Nature’s Promise. The stores also dabble in club packs and large pack sizes, because it is insane to ignore the gravitational force that Costco and BJ’s are exerting on customer preferences.
Ahold is a big grocer but not a full-on monopolist like Walmart, HEB or Kroger, elbowing out every other smaller, regional competitors for full market share dominance. Walmart or Kroger are number one, two or three in market share in dozens of metro areas, everywhere they operate. It is still quite possible to compete with Ahold and attract customers looking for a smaller format retail experience, a more localized assortment, or more specialty and gourmet items.
Ahold is not reinventing the grocery paradigm, and they are taking full advantage of the status quo industrial food supply along with ample space for edgier and more trend forward options that look good on their ESG reports. Ahold is a low ESG risk for investors and plays up its green credentials skillfully, especially through its product assortment and store brands, 55% of which they consider “healthy”.
Ahold has faced challenges recently, with some tougher financial quarters as cost inflation and price over volume strategies hurt customer traffic and unit throughput. The company is closing a number of stores just after the company invested millions in remodeling older and financially troubled locations. Ahold is also notorious for restrictive lease covenants, especially in New England where it monopolizes some smaller metro area markets. These covenants forbid new grocers from taking over the location of a defunct Ahold store, sometimes for decades. They are great way to engineer food apartheid, intentionally or not.
Like Kroger, the company has faced allegations by farmworker advocates of having forced labor in their supply chains. Ahold has been stubbornly resistant to sitting down with dairy farmworker-led organizations to resolve such concerns. This shouldn’t be a huge deal, peers such as Whole Foods and Walmart are happily and profitably selling products with such assurances. And like Kroger and Albertsons, many Ahold divisions are unionized. The stores have an experienced bench of career stock clerks, cashiers and department managers whose unions will be renegotiating contracts in the near future. A recent round of contract talks in New England led to protests and picket lines until Ahold came through with better wages and benefits for staff. Contract talks are coming again soon. Never cross picket lines.
But really, any Ahold opening, especially a Giant, is not a cause for a celebration. They are probably the most middle of the road, middle of the road grocery chain. The stores are big and bright, but still your basic Global North, First World, corporate-industrial food supply chain supermarkets. Still, it is nice to see a unionized store give non-union Target and Sprouts a run for their money while providing residents with plenty of fresh, high quality food options at reasonable prices. If I were local, I would definitely spend more money at a union shop, even a big chain like Giant. They sell quite a bit of what I normally buy, at reasonable prices. Ideally, this is how a free market is supposed to work. Let the market take its gritty course.
»A South Philly Giant Recap.
By Grocery Nerd Junior
The store smelled fine. New still. Very bright and fancy. Asian foods selection in produce and grocery aisles were the highlight. I need to go to Sprouts and Target next door to actually compare, but I noticed several common items, including Jovial Pasta, with a dollar or so difference in price between Giant and Sprouts. Target is dirt cheap in Philly so I suspect the cleaning supplies and cosmetic aisles at Giant will not be as popular, however they do have a bigger cleaning and household supply section than Target so that might make up for it.
Giant had a huge prepared foods set that looked pretty fresh. As expected, limited organic but plenty of natural and allergen friendly options alongside the standard stuff. They sell junk food in bulk like Costco and you can’t get that anywhere in the city itself, probably more expensive than Costco though I assume. So many apples (Grocery Nerd would approve). Not much organic. The meat section didn’t smell bad, but packaged stuff already didn’t look great and was mostly a day away from sell-by from what I saw. And what the fuck is this robot.
4. Ten Bills to Create Dignity and Safe Working Conditions for Food and Farm Workers.
By Nichelle Harriott, Policy Director, HEAL Food Alliance
Food and farm workers touch every part of our food system: they plant and harvest crops, process meat and poultry, conduct food safety inspections, stock shelves in warehouses and grocery stores, and cook and serve food in restaurants. There are more than 21 million of these workers, and they make up 10.4 percent of the US workforce. Working people in our food and farm systems continue to be historically excluded from (or provided minimal protections under) federal law.
The following pieces of legislation lay out common-sense solutions to assure that food and farm workers will finally be afforded rights and protections similar to other workers in the United States.
1. Fairness for Farm Workers Act ( S.2253 / H.R.4579 )Senator Alex Padilla (D-CA) and Representative Raúl Grijalva (D-AZ) introduced this bill to ensure fair compensation by making farmworkers eligible for overtime pay and ending minimum wage exemptions.
2. Supporting Our Farm and Food System Workforce Act ( S.2703)
This legislation would establish an Office of the Farm and Food System Workforce to work with food and farm workers and the USDA to develop recommendations and new initiatives. Additionally, the bill will create a Farm and Food System Worker Advisory Committee comprised of food and farm workers and other relevant stakeholders who will represent worker perspectives, and a Farm and Food System Workforce Interagency Council that will improve coordination and policymaking among various federal agencies. Going further, the bill will mandate reports on agency efforts and the impact policy recommendations will have on food and farm workers.
3. Agricultural Worker Justice Act (S.2601 / H.R.4978 )
Senator Peter Welch (D-VT) and Representative Greg Casar (D-TX) introduced this legislation to improve wages and safe working conditions. It requires food companies to compensate workers at the prevailing rate for wages and benefits in order to contract with the USDA, which currently oversees more than $11 billion in annual procurement and contracting obligations. Additionally, the bill prohibits corporate stock buybacks and provides enforcement measures to hold bad actors accountable.
4. Child Labor Exploitation Accountability Act ( S.1288 / H.R.2822)
Introduced by Senator Cory Booker (D-NJ) and Representative Casar, the bill prohibits the USDA from entering into contracts with companies that have violated child labor laws, including vendors and subcontractors with labor infractions. Companies will be required to disclose labor and worker safety violations they have committed, including those of their vendors and contractors. Further, the bill requires the DoL to prepare a list of violators ineligible for USDA contracts and to determine corrective measures needed to regain eligibility.
5. Food Secure Strikers Act (S.2553 /H.R.4845)
Workers who are forced to protest poor working conditions often forego their wages to join picket lines. This bill, introduced by Senator John Fetterman (D-PA) and Representative Alma Adams (D-NC) repeals punitive restrictions on striking workers, enabling them to strike while maintaining their eligibility for Supplemental Nutrition Assistance Program (SNAP) benefits.
6. Voice for Farmworkers Act (S.2702)
This legislation aims to strengthen and expand the USDA Farmworker Coordinator position. The bill will provide more staffing capacity and improve the function of the position, making it the point of contact at the agency on farmworker issues, coordinating and providing guidance to the USDA and other federal agencies, as well as to farmworker and community-based organizations.
7. The Food and Nutrition Delivery Safety Act ( S.3824 / H.R.8300)
Representative Angie Craig (D-MN) and Senator Fetterman introduced this legislation to require all SNAP-authorized retailers to pay fair wages and provide safe working conditions for employees who deliver essential goods to SNAP recipients. The bill also stipulates that the food being delivered must be safe and secure during delivery, and provides measures that make it easier for SNAP recipients to utilize the online grocery delivery service.
8. The Grocery, Farm, and Food Worker Stabilization Grant Program Act(S.3469 / H.R.6720)
To protect the food supply chain from disruptions during disasters, this bill will make the Farm and Food Workers Relief (FFWR) grant program permanent, allowing Congress to provide emergency funding to cover disaster-related costs for grocery, farm, and food workers.
9. Protecting America’s Meatpacking Workers Act of 2023 (S.270 / H.R.798 )
Championed by Senator Booker and Rep. Ro Khanna (D-CA), this bill strengthens health and safety standards for meatpacking workers, cracks down on monopolistic and anti-competitive practices by meatpacking corporations, and ensures workers have the right to speak out about labor abuses without fear of retaliation and prevents the USDA from issuing line-speed waivers unless meat and poultry plants submit to an inspection and can demonstrate that an increase in line speeds will not adversely impact worker safety.
10.Asunción Valdivia Heat Illness, Injury and Fatality Prevention Act (S.2501/ H.R.4897)
Named after Asunción Valdivia, a farmworker who died from heat stroke after working 10 hours in 105°F heat, this legislation will ensure workers are protected from continued exposure to extreme heat by directing the DoL to establish a permanent federal standard for indoor and outdoor occupational exposure, plus common-sense measures like providing workers with shade or climate-controlled spaces, water for hydration, and emergency response services in case of heat-related illness .
5. Tunes.
In a world of Cartmans, be a Kermit.
peace.