Oct 22, 2017; Small Business Trends
Based in Wooster, Ohio, after 88 years in operation, family-owned Buehler’s Fresh Foods, a small supermarket chain that operates 13 stores and employs 2,100 people, is selling the business to its employees, reports Gabrielle Pickard-Whitehead of Small Business Trends. The company will be owned by an employee stock ownership plan (ESOP) company, a form of business organization, which, as NPQ covered earlier this month, allows employees to acquire ownership that is held in a trust through a form of 401(k) retirement account contributions.
Nationally, more than ten million Americans own all or part of the companies where they work through this mechanism. Supermarkets that are also ESOP companies include Florida-based Publix, with 188,000 employees; Idaho-based WinCo, with over 17,000 employees; and Texas-based Brookshire Brothers, with 7,000 employees; among many others.
In Supermarket News, company president Dan Buehler said:
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Our generation of Buehlers are reaching retirement age, and we think this a better option than selling the business to outsiders. We want these supermarkets to be here serving customers and providing good jobs well into the future. There’s no one better qualified than our own employees to carry on that mission.
Pickard-Whitehead notes the broader importance of the sale from the standpoint of the nation’s millions of small business owners: “By selling its stores to its employees, who are already familiar with the business, this is an example of how it can make sense for small businesses to sell internally rather than to an outside buyer.” She also observes that “selling a company to your workers demonstrates a level of loyalty and trust between ownership and employees not often seen in business.”
Pickard-Whithead adds, “Selling the stores to employees means the 2,100 Buehler’s Fresh Foods workers will be able to keep their job. For a small business, selling a company internally comes with many benefits, including not having to find, recruit and train new staff.” Other benefits of employee ownership she cites include increased staff loyalty and greater productivity.
From a nonprofit perspective, using employee ownership as part of a community’s economic development toolkit preserves and stabilizes jobs, thereby increasing local tax revenues and reducing the strain on local social services. A study of 2015 General Social Survey data looked at differential layoff rates for ESOP and non-ESOP members. Authored by National Center for Employee Ownership founder Corey Rosen, who worked with Rutgers economist Douglas Kruse in reviewing that data, the national survey shows that the lower layoff numbers that ESOP businesses results in savings for the federal government that totaled $8 billion in 2014 alone.—Steve Dubb