Giant Food Has a Morale Problem

Discussion
Nov 30, 2004
George Anderson

By George Anderson


The chief executive of Stop & Shop and Giant Food, Marc Smith, told analysts that the company has a morale problem at Giant.


According to Mr. Smith, combining the two companies’ operations and laying off 600 employees at Giant’s headquarters sent a “shock wave” through the organization.


Now, he said, “We need to win our people back.” The best way to do that is to provide employees “a long-term plan that clearly signals we will invest in the market and that their career aspirations will be met.”


A possible fly in the ointment for future relations between management and employees is the issue of health care costs. According to a report in the Washington Post, Mr. Smith said that its most recent labor agreement with the United Food and Commercial Workers Union (UFCW) “did not result in the kind of health care savings Ahold had hoped for, with existing employees still contributing little toward their benefits.” The company intends to “push the issue in future contract negotiations.”


Moderator’s Comment: How would you evaluate Ahold’s combining its Stop & Shop and Giant Food operations? How big an issue do you believe employee
morale is in getting the company turned around?


Give Marc Smith some points for being a realist at least. “We have disappointed some people with what we have been able to accomplish,” he admitted.

George Anderson – Moderator


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