• partial_accumen
    link
    32 months ago

    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.

    1. Your second best business decision would be to announce tomorrow that you’re closing to start the clock on the mandatory 6 month operation.
    2. 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.
      • partial_accumen
        link
        22 months ago

        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.

          • partial_accumen
            link
            22 months ago

            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.