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131

Why San Francisco is considering a bill that would let shoppers sue grocers closing stores (www.salon.com)

submitted 7 months ago by [email protected] to c/[email protected]

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[–] [email protected] 41 points 7 months ago (4 children)

I found the text of the proposed law here. Its not well written in my opinion.

It doesn't look like there would be anything preventing the planned grocery store from dropping its inventory down to near zero and retaining only a couple people to staff it for the 6 month closure period. So, yes, the store would be open, but it could have nearly empty shelves.
The law is requiring the closing company to find another place/build another solution for the residents to buy groceries:

Supervisors Preston; Peskin BOARD OF SUPERVISORS Page 4

SEC. 5703. GOOD FAITH EFFORTS TO ENSURE CONTINUITY OF SERVICES. During the period between the issuance of the notices required under Section 5702 and Supermarket’s Closure, the Supermarket shall meet and work in good faith with neighborhood residents and OEWD to find a workable solution to allow for the continued availability of groceries at the Supermarket location. Solutions may include, but are not limited to, identifying strategies and resources to allow the Supermarket to remain open, helping the residents organize and open a cooperative, and identifying another Supermarket operator capable of continuing grocery sales.

This extra burden would actually incentivize grocery stores to close while there are still viable competitors nearly so the closing store doesn't get left holding the bag forced to set up another organization to let the residents buy groceries.

[–] [email protected] 35 points 7 months ago (1 children)

yeah and seems like it would discourage anyone from opening a store.

[–] [email protected] 15 points 7 months ago (1 children)

This seems like a great way to keep food deserts as food deserts.

[–] [email protected] 1 points 6 months ago

Mission accomplished!

[–] [email protected] 9 points 7 months ago (2 children)

I would argue staying open but empty everything wouldn’t constitute “good faith efforts”

[–] [email protected] 9 points 7 months ago

But they might not be able to afford the rent, so that "good faith effort" is only affordable from large chains, discouraging any local grocery stores from even trying to enter the market.

[–] [email protected] 8 points 7 months ago* (last edited 7 months ago)

The "good faith efforts" clause looks to finding solutions for food access after the grocery store is gone. Again, this goes to my comment about this being poorly written.

"the Supermarket shall meet and work in good faith with neighborhood residents and OEWD to find a workable solution to allow for the continued availability of groceries at the Supermarket location."

If I was a grocery operating on the edge of viability, I'd probably choose to close now before this law went into effect.

[–] [email protected] 4 points 6 months ago* (last edited 6 months ago) (1 children)

Do they mention the legal theory behind this? It’s creating a wholly new cause of action, a form of standing that doesn’t exist, and a privity that is well beyond anything in current law. I don’t think the city actually has this kind of authority, as the state legislature should be responsible for all three of those.

[–] [email protected] 2 points 6 months ago

Whereas the Federal Government and State governments share power in countless ways, a local government must be granted power by the State.

https://www.whitehouse.gov/about-the-white-house/our-government/state-local-government/

So... Yeah it would seem this is a bit of a dubious law

[–] [email protected] -1 points 6 months ago (1 children)

This is such a cool law. Hope it passes. We're talking about a context where there are NOT multiple grocery stores at risk of closing in the areas this bill is intended to benefit.

[–] [email protected] 5 points 6 months ago (1 children)

You don't see the knock on effect of shutting stores early that might otherwise stay open because they don't want to get stuck with this law? How about the chilling effect on any new grocery stores being opened? Why would a new store come into this area with the risk they may be stuck if the store isn't viable?

[–] [email protected] 0 points 6 months ago* (last edited 6 months ago) (1 children)

It's already a bad situation in SF. The economic opportunity of having a thriving business is far greater than the potential losses this bill would cause to a business, which are ... giving notice 6 months in advance, hosting a few community meetings, writing a report or something on possible replacements? I'm not saying those things are free, but they wouldn't break the bank.

This bill not as substantial as people are making it out to be. You'd make more money staying in business than you would save by shutting down early to avoid the small costs incurred by this law.

If anything this would encourage small grocers to build businesses, because they know that big chains like Safeway won't be able to get away with their usual tactics of abandoning neighborhoods and holding onto properties.

[–] [email protected] 3 points 6 months ago (1 children)

The economic opportunity of having a thriving business is far greater than the potential losses this bill would cause to a business, which are … giving notice 6 months in advance, hosting a few community meetings, writing a report or something on possible replacements?

There is nothing in this proposed law that results in a thriving business at the end. Thriving businesses don't close. The only reason a store would be closing is if its not thriving.

You’d make more money staying in business than you would save by shutting down early to avoid the small costs incurred by this law.

If you're closing your store its already losing money. There's no money to be made in staying open. Staying open over time just means losing more money. Its a quick bit of math to find out where the amount money lost from operating for additional months at a loss compared to the cost of closing (because of this new law) means to "break even" on your losses, the better business decision is to close the store months early.

Example using small simple numbers for illustration:

Lets say your store is losing $100,000/month in operation. Lets say that the cost of complying with this law would cost $2 million. That $1m is an additional 6 months of operating at a $100,000/month loss, as well as an additional $1,400,000 in labor to set up community meetings on alternatives or helping the residents set up a coop.

Your second best business decision would be to announce tomorrow that you're closing to start the clock on the mandatory 6 month operation.
Your first best bet is to close before your competitor serving the same community does. That way, you cut your losses immediately and don't have to spend $1.4m complying with the law, because you won't be the last grocery store standing.

[+] [email protected] 0 points 6 months ago* (last edited 6 months ago) (1 children)

[removed by mod]

[–] [email protected] 2 points 6 months ago (1 children)

There is no way it costs $2 mil to set up a few meetings and write a report.

You didn't read clearly. $600k just to cover the mandatory losses, leaving $1.4m for the rest of the compliance with the law. If you think $1.4 million is in total costs (extra labor, lawyers, venues for meetings, courting other grocers to come to the area), I don't think you have a good experience with business at this level. Its at the edge of my knowledge so $1.4m may be way too low.

With thriving businesses, I’m talking about new grocery stores. The bill does not cost nearly enough money to prevent someone from starting up a whole store

If I am a grocer, why would I risk setting up a new store in a place with this kind of law? I can go to any other city in the nation and not have the risk found here with this new law.

If they’re operating at a loss, wouldn’t they close anyway? You’re talking about a business decision that only makes sense for a store that’s on the brink of closing anyway.

When you're looking at forecasting for a business, you project into the future where your profitability is. Its not a perfect science so you may allow for some loss months to see if you can improve operations. With this law, its too expensive to risk extra months of loss without those going to the notice period.

The whole reason SF lawmakers are creating this law is because grocery stores are leaving, they only leave if they are losing money.

[+] [email protected] 0 points 6 months ago* (last edited 6 months ago) (1 children)

[removed by mod]

[–] [email protected] 2 points 6 months ago (1 children)

I do community organizing work with a nonprofit, there is no way that would cost over a million dollars, absolutely no way.

The proposed law is so poorly worded, I don't know how you can make that claim with any authority. I'll be the first to say I'm spitballing the dollar figure judging from other billings for legal compliance work and all the unexpected costs. The proposed law is so open to liability, a company isn't going to go cheap on lawyers and open themselves up to the harsh penalties (law suits from grocery store customers). They're going to jump firmly through every hoop twice to make sure they are iron tight. Even then there will still be people that sue and part of that money I claimed will have to go to paying lawyers to defend the grocery store's actions of compliance. Even if the grocery store customer suing loses, the grocery store still has to pay the lawyers to defend the cases in court.

If you’re a grocer, you’d set up in San Francisco because you have a local investment in the community. Or could be a co-op. You’re missing the point of the law, SF doesn’t want to attract corporations.

If the attraction for new non-corporate grocery stores is so strong, why are SF law makers even making this law? If all the non-corporate grocers exist as you claim, how are there enough communities served only by a single corporate grocery store that it leaving creates a food desert? The proposal of the law speaks against your claims that there are non-corporate grocers just waiting to set up shop. Nothing is stopping them today, yet they aren't apparently, requiring this propose law.

[–] [email protected] 31 points 7 months ago (2 children)

They would be better off encouraging them to stay, rather than punishing them if they had enough and leave. That just adds another thing to the negative column when deciding to open a store there.

[–] [email protected] 7 points 7 months ago

Here in America nobody encourages doing what's right, just just proportionately punishing you for doing what's wrong, unless you're rich enough to weasel your way out of it.

[–] [email protected] 1 points 6 months ago

Being a Negative Nelly is illegal, comrade

[–] [email protected] 11 points 7 months ago

So another (arguably well-intentioned) law written by people who have never worked or ran a business.

[–] [email protected] 10 points 7 months ago

I don’t see how this works.

If the store isn’t profitable, the company needs to close it.

If they’re closing it in bad faith, in theory you can open a new one.

A better idea would be that grocery stores must own or mortgage the land they use, and forfeit the land upon exit.

That way the chain can’t hold the location without a store in it.

[–] [email protected] 6 points 7 months ago

companies will just leave even faster. someone didnt think this one through