(02-25-2021 02:06 PM)Hambone10 Wrote:  

(02-25-2021 11:25 AM)Owl 69/70/75 Wrote:  Yes. I'm not sure that there is much common ground with the SJWs. But make it about issues and carve out some solid issue positions, and who knows might come onboard.

More of an 'enemy of my enemy is my friend'. Sort of like how both Republicans and Progs are against the ACA... so you align on the idea that the ACA is a failure. That is the common ground.

(02-25-2021 12:52 PM)RiceLad15 Wrote:  I forget which thread the MW conversation was happening (probably all of them, to be honest), but I was reminded of this article on Twitter today, and it seemed tangentially relevant (inflation).

I love this quote:

Quote: When Costco president W. Craig Jelinek once complained to Costco co-founder and former CEO Jim Sinegal that their monolithic warehouse business was losing money on their famously cheap $1.50 hot dog and soda package, Sinegal listened, nodded, and then did his best to make his take on the situation perfectly clear.

"If you raise [the price of] the effing hot dog, I will kill you," Sinegal said. "Figure it out."

https://www.mentalfloss.com/article/5470...mbo-enigma

edit: found out why this popped up on Twitter when I googled Jelinek. He just made an announcement at a US Senate Budget Committee about Costco raising its minimum wage to $16. Fun quote form him (that was from that announcement):

"In my past experience, wages usually don’t put people out of business, how you run your business will put you out of business"

Sure lad, but put yourself in that hot dog situation, which generates ZERO direct profit for the wealthy owner (usually the argument in support of raising wages, that the owner will simply make less of a profit), and 'figure it out'. What are you going to do?? This is really IMO a great situation to discuss because 'real business decisions' follow this same train of thought, but because there are so many variables, people get lost in that and just say 'it can be done'... which is sort of what you imply here, but that's not what the guy was saying.

One assumes that the stores have already done 'what they can' to minimize the loss on the hot dog, right? There are no significant increases in efficiencies just waiting to be had... so you have to now find a way to reduce your costs in order to overcome the increase in labor costs...

Options :
- Increase prices, which you've been told not to do, even though it loses the owner money
- Decrease portion size, which is hard to do in hot dogs but theoretically it can be done. That said, are customers going to be as interested in 'less' of a value? There is a business cost to this. Costco gets tons of positive press and visits based on their hot dog and pizza 'value'... if that goes away, they 'lose'... and apparently that is worth more than whatever they lose on $1.50 Hot Dogs
- Decrease product quality. Same as above
- decrease the amount of labor associated with the hot dog. This seems most likely.

So how do you do the last thing?
Most likely, have 2 rather than 3 people serving dogs.. 3 people at $10/hr vs 2 people at $15.... so you've cost someone a job... but now the two people are having to do the work of 3... OR the quality of the work suffers... or both...

Sure, you can make the argument that I will put in a kiosk or a robot that eliminates some of the work of the persons, but if that is the case, why wouldn't I just replace ALL of the persons?

The typical response is that you can now retrain that hot dog taker to work on the robot; but
a) These are often high school kids who haven't reached that point in their life yet... so its TIME as much as a 'need for a job' that keeps those people from having the training, and this will be in perpetuity
b) if you suddenly have 1mm fewer 'min wage employees' and 1mm more 'robot technicians', why wouldn't this depress the value differential of 'robot technicians'? Especially in that many such techs ALREADY don't make a lot more money than that. As an example, I could hire an RT in Missouri for $22/hr and a 'front desk clerk' for $10. If you force me to pay $15 for the front desk clerk (who is in school to become an RT)... a) I'm going to try and replace them or have them replace someone else... but b) why would I pay the RT more?

I'm using that as a real world example and not a direct comparison, since I'm not replacing the clerk with a robot and the RT isn't servicing the robot, but its the same concept, just simpler.

SO yeah, these business managers WILL 'figure it out'. He didn't say 'figure it out without firing people or increasing employee turnover

Ironically, the answer to your question of how they made it work was in the article, and none of your proposed solutions were the answer.

Here is how the managers figured it out (from that same article...):

1) When supply costs threatened to increase in 2009, the company made a major decision: They stopped using Hebrew National, makers of the all-kosher dog that they had used since 1984, and decided to move hot dog production in-house. A Kirkland's Signature hot dog plant was constructed in Los Angeles. When they needed to ramp up production, they built a second plant in Chicago.

2) When their deal with Coca-Cola was set to increase the price, Costco opted to sign with Pepsi in 2013, ensuring that their trademark $1.50 price sticker would be kept intact.

And look at this innovation:

3) When California recently enacted a soft drink tax that would have raised the consumer's cost, Costco locations in the state switched the combo to include Diet Pepsi. (Diet drinks are exempt from the law.)

Maybe they did made some of the changes you suggested and just didn't tell anyone. But my guess is they didn't, given the quote by the Jelinek and Costco's well known policy of trying to retain employees.

Big picture, why did they make the changes:

"According to Jelinek, people would pay $1.75, and maybe more, for the deal. But is that extra 25 cents going to be more valuable than the goodwill and foot traffic generated by a combo that's stuck to its price point for nearly 35 years? Probably not. Probably not. Customers coming in to shop at Costco are amused, satisfied, and fueled by the hot dog meal. If they get it just before leaving the store, they're left with a lasting impression of being treated well. That's worth more than keeping up with inflation."

In the end, they probably are willing to make very little to no profit on the hot dogs if they view them as an investment to get people to sign up for their service and buy goods in their stores.