A view inside C&S Wholesale Grocers, America’s secret corporate empire, home to the future of white-collar exploitation.
The modern supermarket, with its promise of a limitless variety of food and household goods available for low prices, is the crown jewel of consumer capitalism. The cornerstone of all retail, the supermarket holds a seemingly permanent place in the canon of American life, yet barely appears in the broader discourse, even in discussions about our food habits. It’s not unusual to debate the ethics involved with farming and food production, or to ponder the pros and cons of nonlocal food distribution, but the fact that the products will be on the shelves tomorrow and the next day is taken for granted. Virtually nobody knows how this happens, and even diligent corporate watchdogs are unaware of the existence of C&S Wholesale Grocers, which recently became the world’s largest grocery distributor.
This is no accident, and it is unlikely to change despite the modest attention garnered by an August 5 piece written by Brendan Coffey and Zohair Siraj for Bloomberg Businessweek. Headquartered in isolated Keene, New Hampshire and routinely ranked between the eighth and thirteenth largest privately held American corporations by Forbes, the supply-chain behemoth boasts distribution centers from Massachusetts to Miami, Buffalo to Stockton, servicing stores from Maine to Hawaii — all without ever issuing a press release.
Its sole owner, Richard B. “Rick” Cohen, gives no interviews and makes no public appearances. Aside from the occasional vague mention in local newspapers and trade publications, C&S flies almost entirely beneath the media radar, which is what made Coffey and Siraj’s portrait of the “hidden billionaire” and his company seem remarkable; it was instantly snapped up by MSN Money, Yahoo! Finance, the Daily Mail, and others. In reality, the true yet subtle significance found within the lazy and over-hyped profile lies in its omissions and what they reveal about the secrecy surrounding C&S. The only quote from a current employee of the company is provided by Brian Granger, chief legal officer and spokesman, and it amounts to an admission that the company is large and little-known. Most of the facts and figures cited in the article represent data alternately gathered or estimated by Bloomberg, with quotes from outside industry analysts and a Harvard professor who wrote a case study on C&S back in 2003, when the company was less than half its present size. The piece also relies heavily on interviews with Edward Albertian, whom the writers describe as “a former C&S president” without noting that he left the company nearly a decade ago.
Entirely absent is any acknowledgement of the company’s more controversial side, easily unearthed by a Google search. Not long ago, there were so many anti-C&S agitprop videos on YouTube that company executives found it necessary to begin quietly producing and releasing their own short clips depicting a reality so filled with sunshine and rainbows as to make Pollyanna blush. They have been sued countless times for everything from state and federal labor violations to massive price-fixing on a nationwide scale. In 2005, a New Jersey jury awarded $1.2 million to Steven Summese, finding the company had illegally retaliated against him in 2003 when it fired him for exposing warehouse refrigeration practices that were in violation of the Clean Air Act and other environmental laws. As recently as 2012, the company paid a comparably modest fine of $126,700 for Clean Air Act violations in Massachusetts.
It can hardly be expected of Businessweek to waste valuable space on labor issues or working conditions, but the only hint of C&S Wholesale Grocers’ storied anti-union street cred is buried in an innocent family anecdote in which Rick Cohen “persuade[d] his father to move the company to Brattleboro, Vermont, where it could build larger warehouses and hire nonunion workers” — back in the mid 1970s. Albertian relates a charming and folksy tale of how Cohen refused to allow him to put the corporate logo on the company’s fleet of trucks, attributing this to Rick’s desire to “continue to be stealthy and operate in this little, dinky Keene, New Hampshire marketplace,” leaving out the fact that trucks were left unmarked in part to deter the perceived threat, in the late nineties, of Teamster retaliation for the company’s exclusive use of nonunion drivers.
Less surprising, perhaps, is the article’s unabashed approval of Cohen’s “incentive-based” pay model for warehouse selectors, widely admired as innovative and efficient within the industry. The wet dream of market fundamentalists and social Darwinists alike, the scheme organizes workers picking boxes and building pallets to be loaded on outbound trucks into teams that are scored as a group. Everyone is paid a base rate, but additional money is earned for speed and accuracy, while errors and delays lead to pay decreases, all of which are based on the score for the team. Naturally, workers are pitted against one another by the competitive framework and the need to struggle ever faster in order to “pull one’s weight.” Within each group, selectors have been alleged to encourage other members of their team to skip meal breaks and even work off the clock, sacrificing base pay for additional incentives.
As can be expected, the union warehouses under the C&S umbrella — usually facilities the company acquires but is unable to immediately close for legal reasons — decline to participate in such a model, but even with recent reforms to the program leading to a decrease in the potential financial incentive itself, many selectors welcome the chance to earn more than their peers elsewhere. Safety is a high priority in the warehouses, and the track record on accidents is not alarming, but no regulation can counter the long-term bodily toll of the galley-slave pace with which these selectors wheel through massive aisles on one-ton steel pallet jacks, leaping off to scoop boxes and place them neatly in ten-foot pallet formation, then back on to race off again. No one can be surprised, then, that such warehouse practices are those most frequently challenged in court.
Nevertheless, run-of-the-mill antiworker policies in the warehousing and transportation sectors — the blue-collar bulk of the company’s workforce — can in no way explain the ability of C&S Wholesale Grocers to remain so effectively in the shadows, or account for the culture of silence and secrecy that makes it possible. In fact, any answers to this mystery can only be found in the offices of the company’s New Hampshire headquarters.
In the economic world of 2013, employed workers who stop believing that they are lucky to have their jobs, that they should be “grateful for what they have,” will quickly find themselves in trouble. There are always consequences for challenging a culture’s mythos, but this notion has become nearly impossible to dispute in the days since the economic crash of 2008. With so many looking for work and so few openings available, the ability to labor someplace and collect a paycheck is universally accepted as a blessing.
Nevertheless, a June Gallup poll revealing levels of disengagement among all American workers at a staggering 70 percent suggests it may be time to challenge the perception — shared on both Right and Left — of the white-collar office worker as an effete, back-slapping, internet-surfing, casual-
Fridaying “professional” coasting through a cushy existence. With many earning guaranteed annual salaries and even hourly clerks and assistants afforded health benefits and paid time off, the notion of organization and collective bargaining within this sector of the workforce is increasingly treated as a fantasy. Tellingly, the Office and Professional Employees International Union represents only 110,416 white-collar workers in the US — out of a total estimated at upwards of 54 million. All this begs certain questions of those who count themselves among the Left. Is exploitation that is neither physical nor overt still exploitation? More broadly, is the purpose of organized labor limited, confined to checking off a list of old demands without venturing beyond, or is the struggle for a freer and more pleasant life ongoing?
If answers to these queries are to be found among the office workers at C&S headquarters, we must acknowledge one thing Coffey and Siraj get right: Rick Cohen is, strategically speaking, positively brilliant. While the company’s anti-union practices and warehouse schemes are readily apparent, it is a mistake to assume this trailblazing “innovation” doesn’t shape the working lives of employees in button-downs and blouses.
The figurative machinery of the grocery empire’s operations is managed from headquarters by the procurement department. Housed in the “bullpen,” a room the size of a football field packed as far as the eye can see with three or four hundred cubicles beneath garish hanging lights and an unfinished ceiling, the department is responsible for both inventory management and merchandising. Until a short time ago, it was here among the honeycomb of cubes that I spent nine years as a buyer. A certain amount of the corporate culture can be inferred merely from the bullpen’s physical setup, in which very little is left to chance. Offices housing managers, directors, and vice presidents form a horseshoe around the edge of the room, and the cubicles are kept short — the walls are roughly three feet high — to ensure that nothing happening on the floor goes unseen. Most of the people in this room are involved in the process of buying. At C&S, this can be defined very simply. With each buyer assigned several thousand items for two or three warehouses, the goal is to simultaneously avoid being out of stock and holding excess inventory.
Segregated to the north side of the room is the smaller merchandising team. Normally, “merchandising” refers to the negotiation with manufacturers for sale prices and other promotional deals ultimately found in weekly fliers and temporary price cuts at store level. Ostensibly, the team performs this function for several hundred independent grocery stores that, without a wholesaler like C&S, would lack the bargaining power to do so. In practice, this job involves the “generation of gross profit,” something that is often done by any means necessary. Overall, however, despite constant reminders that buying and merchandising represent “one team, one voice,” buyers and merchandisers often hold contradictory goals and rarely are provided an understanding of what the other side does.
If any of this sounds strange, it becomes even more so when compared with the broader industry. Everywhere but at the wholesale giant, buyers, merchandisers, and buyer/merchandisers (the two roles are often a single position) are trained product specialists held in high regard and rewarded with perks and conditions more closely resembling the common cushy white-collar stereotype. On average, they command a salary as much as 50 percent higher than those offered to the buyers and merchandisers in the bullpen, most of whom remain blissfully unaware.
Indeed, there are advantages to remaining nestled in “little, dinky Keene,” with its modest local population and small state college, where the corporation has the freedom to do all of this and still remain the largest and highest-paying employer. Here, it is easier to attract the eager and the inexperienced, who know nothing of industry norms surrounding pay and treatment. More importantly, local residents, especially those with underwater mortgages, children, and other family ties to the area, are less likely to go through with the relocation required of anyone wishing to use their experience to command higher pay elsewhere. These workers are more dependent on the company, and consequently more grateful and subservient.
After all, if reducing labor costs is a priority to a corporation, hiring or developing professional experts can be an expensive proposition. Despite the desire on one hand to hire people without the means to easily depart, fostering long-term employees is also expensive. The department wrings no hands at the fact that workers here who have lasted longer than five or ten years are a rarity. Not that this is altogether bad for workers. The stress-related health problems and widespread use of prescription blood pressure and antidepressant medication are so prevalent that the company represents something of a dark inside joke among Keene’s medical community, and the effects of this labor on lifespan have not yet been properly studied.
Perhaps the most intriguing number to come out of the Gallup workplace satisfaction poll is the 18 percent — nearly one in five — workers who self-identify as “actively disengaged” or who, in the words of Gallup CEO Jim Clifton, “roam the halls spreading discontent.” Personally, I found myself, the office’s token socialist, to be the only one at the C&S offices to meet this description. If these statistics are as true here as they are elsewhere, those who shared my active disengagement were wise enough to shut up about it. Official policy as defined by the oft-referenced but rarely-seen employee handbook includes a type of “honor code” that makes it a punishable offense to fail to report the malfeasance of any other employee to management or human resources.
In 2007, following the brand-new senior vice president’s announcement that times were simply too hard for the wildly profitable company to offer us our meager annual raises, I challenged him in an open meeting and subsequently attempted to start a revolt on the floor. Holding up a picture I had drawn of a stick-figure Satan spouting lies, I proudly shouted rebellion from my cubicle in the center of the room, and was met with snickers and tacit but mostly silent agreement from many of my colleagues. One, however, who either did not share my views or believed passionately in the honor code, reported my activities to management, and an investigation was conducted that nearly led to my termination.
In the years that followed, departmental success led not to shared prosperity but to a dramatic increase in expectation and job standards. During my tenure, the average size of a buyer’s desk increased nearly 300 percent. At the same time, basic requirements for service level — the method used to measure out-of-stock inventory — were raised to levels far higher than previously imagined. Once standards are changed, it is as though the old standards never existed, for they are never acknowledged nor spoken of again.
The desire of management for standardization was unquenchable, and a document formally entitled “A Day in the Life of a Buyer” became gospel. This Excel spreadsheet was a moment-by-moment guide to the myriad activities in which every buyer should be engaged at a given time of day. Its authors never acknowledged that the total time detailed amounted to nearly twelve hours, not including a break for lunch and with no time allotted for the reading and answering of daily e-mails that routinely numbered in the hundreds. Additional “time studies” would be conducted over the years in a relentless search for anomalies and inefficiencies to eliminate. Slowly but surely, the goal of making each employee interchangeable and disposable has been more effectively realized, and with many employees having less than two years’ tenure at any given time, few are ever able to identify any transformations at all.
Every two years or so, the company contracts with an outside firm to conduct an anonymous employee survey to measure satisfaction across departments in various categories. When the results are posted, employee committees known as “engagement teams” are formed to work in conjunction with management and HR to determine findings that can then be ignored. As part of two different engagement teams, I was offered a tentative opportunity to enact reforms within the established channels of the system when I was appointed the architect of a new volunteer-based peer mentoring program. With the help of a sympathetic director acting as sponsor, the program was designed to allow any employee to choose from a list of volunteer mentors someone with whom they could speak in confidence.
It was hardly collective bargaining, but at least an opportunity was being provided for some small-scale bonding of coworkers to combat the more prevalent climate of division. With the surprising approval of management, the program was rolled out on schedule, and nobody signed up. Investigating the cause, I found that people actually were interested, but despite the safeguards I had built into it, people were too afraid to join. They were afraid of being viewed as weak and afraid that participation would lead to trouble of some kind. It was a crushing disappointment, but it should have been no surprise in a workplace in which HR was known not for answering questions about benefits, but for a foreboding corporate manager nicknamed “the Angel of Death” who would march terminated employees through the room in a manner not unlike that of a public execution. (It should also be regarded as consistent that no current employees were willing to speak, even off the record, for this story. One told me that he feared management would read it and identify him by his manner of speech.)
Fear is compounded with ignorance: secret pay rates and criteria for promotions that are never disclosed. Promotion itself is sometimes viewed as something to avoid; on “graduating” to the lowest level of supervisor within the department, new senior buyers are instantly exposed to upper-level meetings with vicious language and brutal undertones. The increase in stress and decrease in comfort was immediately apparent anytime anyone moved into a higher position. “I wish I could just give the five thousand dollars back,” one supervisor told me many times. “It’s just not worth it.”
“You know,” I would often remind him, “any five of us veterans could grind this whole thing to a halt.”
“Don’t think I don’t know,” he would reply.
This is the office of the future, the one in which colleagues huddled together in pens view one another as competitors for an unknown but finite amount of resources, the one in which expertise in one’s line of work is viewed as a potentially expensive liability to be abandoned in favor of deskilled automation and rote adherence to standardized routine encased in iron. This is the office in which workers are prevented from considering the possibility of joining together by confusion, fear, and carefully crafted ignorance.
The currently emerging generation of millennials is poised to inherit this promised dystopia. The disadvantages faced by the young are well-documented. Conditions such as high rates of unemployment, drastically devalued college degrees, and chronic indebtedness grant a vast advantage to those who, like C&S Wholesale Grocers, seek to “innovate” the white-collar workplace toward greater efficiencies and lower costs. Frequently and mistakenly characterized in the cover stories of national magazines as lazy and entitled, the danger that millennials will assume self-blame and buy into the workplace mythos of their forebears is very real.
But it is not within the scope of national status quo rags like Time to change the cultural conversation. If, at the same time, it is unrealistic to expect existing office workers living under constant threat of termination to band together and offer resistance, the responsibility to educate, empower, and envision better ways of living life falls squarely on the shoulders of the radical left and its allies within organized labor. In imitation of a bizarre ritual I am told is found at every Walmart, C&S invented a corporate cheer to force participation at the end of group announcements. It involves a cadence of clapping, followed by the cheerleader’s call:
“Give me a C!”
“C!” the crowd responds.
“Give me an S!”
All together: “C&S! We’re the best!”
It’s long past time workers responded with a rallying cry of our own.
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