By Jake Abbott
Source: Sacramento Business Journals
Over the last couple of years, West Sacramento-based The Raley’s Cos. has spent $300 million in capital investment, and $270 million of that has been spent outside of California, particularly in Nevada and Arizona.
During a recent panel discussion put on by the Bay Area Council, Raley’s CEO Keith Knopf said there are a variety of factors that make doing business harder and more expensive in California than in other states.
He used the company’s Northern California portfolio to explain, which includes $3 billion in annual revenue and employs about 10,000 people. The company’s Northern California portfolio generates about $65 million in annual profit, he said.
“The incremental cost, when you set aside land, labor, utilities and taxes, to do business in California, on the footprint I just described, is an incremental $75 million to do the exact same revenue in the same businesses in Arizona and Nevada,” he said. “That $75 million at a $40 average hourly wage with benefits including retirement and health care that we pay for, would employ another 1,000 people. So when you think about the real cost of what these other things that take resources away from a business, what that real cost is is employing people at a competitive wage with benefited jobs.”