Company Q sends, what some would consider, a clear message to its consumers. The message Company Q is sending is the message that their company is interested in profitability without risk, distrust in their frontline employees, and catering to the communities with the highest income, a message the American people are used to receiving. By closing stores in lower income communities instead of making an attempt to find out why they are losing money while introducing a higher line of products because of customer demand in the higher income communities sends these messages clearly to those affected by the loss of service or loss of job. By closing these two stores, Company Q is adding to an already critical economic situation within these communities, and they are exacerbating the situation by refusing to contribute product that ends up as waste to the food banks that most likely support these same communities. Company Q refuses to donate their day old food to the food banks citing the potential for employees to steal product that the employees claim they are donating. In addition to the savings they are losing by discarding waste instead of donating which I will explain later, Company Q is sending a message to their employees that they are not trusted which affects employee morale, which affects productivity.

The first area Company Q needs to address is evaluating their stores. There should already be a system in place to evaluate each store’s profitability since these numbers have to be reported in the financial reports. Where they are failing themselves is by not intervening when a store is struggling and letting them get to the point of closing them down. There should be someone responsible for all the stores in that area, and it is this person’s responsibility to make sure each store succeeds. If Company Q would invest a little time and capital in making sure each store is set up to meet the demands of its community and provide direction based on each store’s strengths, weaknesses, opportunities, and threats these stores would not have to be closed. Further evaluation could be done to understand why other stores are profitable. Company Q is leaving their business up to chance. If they go into each area with the mindset that they will just close the store if they don’t make enough money, then they will eventually close every store.
The second point could be resolved by addressing the previous point. It takes a change in mindset to achieve these things. Company Q already analyzes the market demands of its stores in the higher income communities, which is evident by the introduction of the higher margin food items it introduced in those stores because of the customer demand despite the cost of the items. Applying that philosophy to all stores would not only make them more profitable, but would send the message that Company Q has a vested interest in the success of all their stores no matter what community they are in.

The third point would be to address the donations of day old food to the food banks. Allocating funds and labor to organize this could be justified by the saving Company Q would receive by transferring part of the dollar amount that is currently recorded as waste to food banks and other charitable organizations and receiving a percentage of that loss back as a tax deduction. Company Q could appoint one of its board members to take on this responsibility of organizing the donations and keeping record of the expiration dates and location each donation comes from if the company is truly worried about its employees stealing from it. This would also let the employees know that Company Q trusts them and cares about the communities that they most likely reside in.

Making these three changes would make the company more profitable in the short term simply due to the savings it would see from donating instead of wasting, and more profitable in the long term due to the increased morale and productivity of its employees, a more proactive way to standardize and run their business, and the appearance of being socially and ethically responsible to the communities it places each store in.