With California facing the challenge of a fiscal crisis larger than any in recent memory, state legislators, officials and the governor will have to make tough decisions to eliminate a near-$26 billion shortfall in the state budget. California’s grocery industry will be part of this process, but shouldn’t shoulder an unfair portion of the solution.
In an open letter to newly elected Gov. Jerry Brown, California Grocers Association chief Ron Fong offers solutions and steps to help the Golden State get back on track as the nation’s most innovative and progressive state.
Dear Gov. Brown…
California stands at a crossroads, and your administration will be key in determining whether our great state chooses a path of prosperity or one of continued economic struggle and challenge.
As one of the largest components of the private employment sector, the grocery industry is looking to you for leadership and we are confident you can provide it. We fully recognize it will not be easy to bring California back to greatness, and we stand ready to partner in that effort.
While there are many issues I believe must be addressed if California is to return to greatness, I would like to focus on just three.
There is much talk of “job creation” these days but no consensus on how to get there. Real job creation is something our member companies know a lot about. Each full-service grocery store in California employs hundreds of people to keep it running. And we have somewhere in the neighborhood of 8,000 full-service stores in California! These are jobs that cannot and will not be sent offshore or moved to a nearby state with a better jobs climate.
They are jobs, however, that can be lost as companies are forced to downsize in this difficult economy. Profit margins in our industry hover near 1.5 percent—some of the lowest in the business community. Creating jobs on that razor’s edge can be difficult, especially when trying to meet the competing public policy demands put on our industry. It is imperative that any job creation efforts focus on removing and not adding to the significant regulatory burden that currently exists in California.
One issue that ties into job creation is the ability of grocery companies to expand—to open new stores and hire additional workers. Significant pressure exists from public policy leaders to expand access to full-service grocery stores in currently underserved areas.
Make no mistake about it, grocers in California want nothing more than to thrive and grow and open additional stores.
Unfortunately, there are significant challenges here in California—everything from access to appropriate-sized parcels to the cost and time required to navigate local permitting. In addition, significant hurdles exist in the process by which California approves applications for stores to accept WIC and SNAP benefits.
Then there are the challenges associated when well-meaning activists attempt to micro-manage store operations by working to dictate store configuration, product offerings and terms of employment.
The State of California and the California Grocers Association have a very special relationship relative to emergency preparedness. We have worked long and hard to create a framework to help ease communication and other burdens associated with meeting the state’s needs for emergency aid during times of disaster.
We’re ready to help in any way possible. California leaned on our industry to expedite goods to fire ravaged areas in Southern California, and we responded efficiently and effectively.
Gov. Brown, California has a rich history of being the leader in business development, innovation. Great lessons can be learned from the private sector. Hopefully, like your predecessor, you’ll tap this valuable resource.