September 14, 2009 06:27 AM UTC

Grocery workers struggle for a fair contract

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• by: richardmyers

( – promoted by Colorado Pols)

Colorado grocery workers are fighting against concessions. The grocery chains are pleading hardship, claiming that the recession has hurt profitability. Yet Kroger, King Soopers’ parent corporation, saw profits rise 12.7 percent in the first quarter.

http://denver.bizjournals.com/…

The grocery chains have repeatedly trumpeted the recession as a reason to cut labor costs. One of the significant questions during these negotiations: Why are the grocery chains spending hundreds of millions on their stores, but setting aside next to nothing for their workers?

An Aurora King Soopers is remodeled with a storefront that, according to the store manager, “…will be visible from I-225.” photo date August 2009

What do the experts say about the financial status of the grocery chains? While admitting the current quarter is challenging, Credit Suisse analyst Edward J. Kelly is “positive on supermarkets,” predicting improved fundamentals next year. He believes that Kroger “is the best company in the sector, given its focus on value.” Kelly rates Kroger and Safeway stocks as “Outperform,” adding that Safeway “has the right strategy for the long-term and generates cash.”

http://www.washingtonexaminer….

With many consumers saving money by cooking at home rather than spending at restaurants, Safeway and King Soopers are very profitable in this recession, yet they choose not to share the wealth with employees. Rather, both companies have been spending significant funds on remodeling stores. According to Wikipedia (and other sources), Safeway invested $100 million in “Lifestyle” stores in 2005, which coincided with the company securing a two tier pay system for its Colorado workers, dramatically lowering labor costs. Hundreds of Safeway stores have been remodeled since this program began.

King Soopers has followed suit, adding towering false storefronts in its own effort to enhance image. One King Soopers store manager told me a few weeks ago that his newly remodeled store will now be visible for miles. (If the recession really is hurting King Soopers, as they claim, then why the extravagance?)

The companies’ negotiators have been particularly stone-faced and stingy during negotiations. Contract improvements seem more calculated to offer the least that will keep the workers talking, rather than rewarding them for their service.

Some significant issues for the workers are: preserving the existing pension plan, which the companies propose to cut by half or more; eliminating the five year old two tier wage system, which starts new hires at or near the equivalent of fast food wages, delays benefits for years, and provides no future path out of the second tier; and, insuring that all workers get a pay raise, not just the workers who have made it through all of their progressions. Workers who would not get any pay increase from the proposed contract significantly outnumber those who would receive a $0.25 per hour increase the first year, under the companies’ proposals.

Colorado grocery workers have a website here:

http://www.alwayshereforcolora…

Disclosure: I am not a public spokesperson for the grocery workers. I am one of a number of “deputy secretaries” on staff with UFCW Local 7, primarily tasked with the responsibility to keep all members informed about negotiations.