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Albertsons, LLC Message Board

  • absisdeadinthewater absisdeadinthewater Jul 27, 2003 6:23 PM Flag

    SG & A

    Please take some time to look at the companies financials. You will find some very interesting results.

    Mostly I noticed that SG & A, as a percent of total revenue is higher now than at any time in the last 3 years. THIS IS AMAZING!

    Consider all the people they let go...the DCs closed... departments merged... early retirement programs...

    Yes I know they closed some stores.. But you would think that after 3 years of downsizing they would have made a dent in SG & A!

    Why not, the reason is they keep lightening head count and not payroll. They are getting rid of the people on the front lines and the lower level administrative people that make things happen and they hold on to the higher wage earners...

    This is a sad situation... after 3 years of massive cuts.. The company has not reaped any of the expected benefits, namely a lower cost structure.

    This means that upper management absolutely screwed up again... They can not even down size correctly.

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    • Yes indeed, before I was "Downsized", I used to keep a folder of the Emails announcing the new VP's being hired, a couple a week for a while. It is true that most of the headcount cuts were lower paid admin and even some store personnel. At one Socal store that was remodeled in 2001, sales were up 30% week in and week out, but they were still cutting people. Most of the new VPs were cronys of LJ or other top people, coming in at 6 digits+, while people in accounting and store planning and architecture who did actual work were bein let go.

    • I would agree with you that SG&A expense continues to grow. Does anyboby know the number of VP's three years ago and the number of VP's today? In the Lynch announcement LJ stated he wanted to flatten the organization. To have a flat organization would mean the elimination of many of these VP's and put decision making at the regional and store level. They also have to invest wisely in technology to improve productivity at office, warehouse and store level. It does seem as a shopper I have seen the cuts at the service level, I would have expected to see this expense much lower. However, the cost of health care has effected all companies SG&A.