Monday, August 10, 2009

You Call this a Service Economy???

After work on Friday, I stopped at the new Aldi’s on Mayfield Road. The store was built behind where the old Richmond movie theater (and later DSW Shoe Warehouse) stood. I am familiar with Aldi’s sales model (along with Sav-a-Lot) which emphasizes price above all else. It’s not my kind of store – but I had a coupon for $5 off any purchase of $30 or more, so you know how it goes.

Shopping carts are kept outside the store and require a 25 cent deposit placed into a gizmo on the cart itself. To get your quarter back, you must return the cart to the corral, plug in a key from the adjoining cart, and your quarter is returned. There are signs posted that if you try to take the cart beyond the parking lot, the wheels will lock. So, an adversarial relationship between the company and customers is established even before the customer enters the store.

The store itself, newly constructed, is rather small. There are four aisles, filled with a preponderance of junk foods and ready made items. The selection of fresh fruits and vegetables is rather sparse. The prices, it must be admitted, are low. But the items being sold are not “name” brands, so the retail price is likely the result of low wholesale costs. Overhead is kept down by charging for bags, not accepting credit cards (debit cards are accepted), and customers doing their own bagging. (As a former bag-stuffer myself, this was not a problem.) No doubt the employees, who looked unenthusiastic, make low wages and receive few, if any, benefits.

But it got me to thinking: for decades, talking heads have been complaining that the United States is transitioning to a “service economy.” Most of the time, what is meant is that the manufacturing base is eroding – and it’s true that the US makes a smaller portion of manufactured goods than in decades past. But where is the service part?

In today’s US, people pump their own gas (except in New Jersey and Oregon), size their own shoes, and bag their own groceries – all in a mad quest to save a dollar. Meanwhile, unemployment rises and profits concentrate to the executive class.

Just a few short years ago, a Catalano’s Stop & Shop just two miles from the new Aldi’s boasted an excellent selection of food, pleasant cashiers (long-term employees who remembered your name) and clean-cut bag stuffers who wore ties and offered to help bring items to your car. Today, only Heinen’s offers this first class treatment, and their prices reflect it. Now, the Catalano’s building is an empty shell – a bitter reminder of another era.

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