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September 14, 2009 06:27 AM UTC

Grocery workers struggle for a fair contract

  • 22 Comments
  • 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.  

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22 thoughts on “Grocery workers struggle for a fair contract”

  1. There are too many stores (in the nice areas) in Denver metro and thus too many employees.  You’re a commodity.

    As the union overseeing multiple businesses you job is to limit competition and drive up prices.  This strategy should come naturally to you.  Drive up the businesses margins and you drive up their incentive to cave on the out-sized pay increases you seek for members.

    Of course if this hurts the overall Union Presidents scope of control (members and their forced dues) it might not be the strategy the President wants to seek.

    1. What responsibility and accountability does management have? Worker’s are now no better than the products on the shelves.

      Is this President pro-labor? Yes. Is that a bad thing? I’ll always argue no.

      According to your “logic”….ahem, It is the unions fault that there are too many stores!? It is labors role to drive up prices by limiting competition?

      I don’t know how to respond without outright dismissing you.

      But, it wouldn’t matter.

      How does it feel to be the blog site dunce?

      2. Look what a great job they have done with GM.  I wouldn’t buy a car from those jokers right now.  When they go under, who is going to be providing the parts, backing up the work???

        Their lacky, Obama only has another three years left and even during that time he might not have the push to save Government/Union Motors.

  2. 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?

    Employees are easy to replace and cheap.

    Real estate not so much.

    P = F  land, labor, capital

      1. I’m suggesting management has no incentive to stop building.

        The site doesn’t let me post the formula- but in English, “profit is some positive function of land, labor and capital.”

        Management has limited supplies of land and capital. But more employees is no problem. So they invest in land.

        And, btw, capital has some significant and permanent advantages

        it doesn’t eat it never sleeps and it doesn’t need healthcare. It moves across borders very easily and has very good to great access to lawmakers. Also, the returns to capital (interest, dividends and capital gains) are taxed way more favorably than the return to labor- wages.

        The US labor movement and our unions have some imperfections, but in the macro picture they are attempting a balancing act against the advantages of capital. The only way I would support breaking the UFCW or any other organized labor would be if a better organization would replace it, and by better I mean an organization that better balances.

        1. That does not mean “breaking” the Union, its more of an opportunity for free choice in association.  I am glad to hear you have similar feelings.

          As the monopoly supplier of labor the UFCW can work within the NLRB processes and the existing contract.  I don’t want to suggest the “S” word, but there is one way to impact your comment below.

          But more employees is no problem

  3. the chains are trying to use the economic downturn as an excuse to screw the workers.  The fact is they are doing extremely well because people are eating out less and buying more groceries. The recession has been very good to the grocery chans.  

    Instead of allowing their workers any benefit from their increasing profits, they see only an opportunity to take more from them.  They know people are very worried about keeping their jobs in this economy so why let the companies’ good fortune be the workers good fortune? Why not take this as an opportunity to put the screws to their employees?  

    That’s what this is all about, not keeping prices down for consumers or remaining competitive. Their profits show they are competing just fine, tight budgets are keeping prices down but the lowest prices aren’t going to be low enough if we don’t get this economy off life support. Well paid workers putting money into the economy is exactly what we need more of.

  4. References to Wikipedia should be banned.

    Secondly, I think that people should stop looking at corporations the same way that they look at individuals.  Expecting a company to share profits out of the goodness of their heart is a waste of time.  They exist for a singular reason; to make money.  

    This is not meant to diminish the goals of the worker.  They have every right to make a claim for higher wages, but basing that claim on the hope that a corporation will suddenly be overcome with a wave of altruism is silly.  

    Lets get real.

    1. Wikipedia is generally not allowed as a source for term papers. That is understandable; it is an encyclopedia, and no encyclopedia is a proper source for a term paper.

      But you make a good point; how can we be sure that Wikipedia is correct in its estimation that Safeway has spent a ton of money on lifestyle stores?

      One possible method is to witness with one’s own eyes. I’ve been in perhaps 25 Safeway stores in the Denver area. Many (but not all) have been updated with the Lifestyle theme.

      Another method is to prowl through back issues of http://www.progressivegrocer.com . I’ve done that as well.

      But the best method would be to follow the Wikipedia source information. We can discover that the footnoted Wikipedia article cites Supermarket News, March 2005.

      Unfortunately, one must sign in to an article retrieval service to go further. OK, I’ve done that for you. Here’s the new source, and a quotation from that source:

      Safeway plans to convert Colorado stores to “lifestyle store” format.

      The Denver Post (Denver, CO) | April 21, 2005

      [excerpt] “Nationally, Safeway is pumping $100 million into a brand repositioning campaign that touts the stores’ new emphasis. Featuring the tag line “Ingredients for Life,” the campaign debuted in newspaper advertising and in-store materials this week.”

      Ahhh, so Wikipedia does provide a worthwhile service. It sometimes (frequently?) offers easy access to information that can be verified with a minimum level of perseverance, without the requirement to subscribe to a retrieval service.

      Hope that helps.

  5. I suggest the discussion stop revolving around the paradigms Karl Marx created.

    Pure and simple, grocery stores are an extremely competitive environment.  Despite the fact that consumers are spending more at the store than eating out, some chains can’t make it (Albertson’s).  The rest face competition from specialty stores like Whole Foods.

    So, the survivors have to invest in their businesses to keep them up to par, attractive diverse places to shop.  That means spending large amounts of money on them.  I suppose the “workers” (ie. employees) would rather work in places that they freqently complain of respiratory problems, or perhaps stores that don’t do well so they have to shut down because consumers go elsewhere because the stores aren’t attractive and provide a pleasant shopping environment?

    I suggest the union folks and union sympathizers take a business course.

    1. Good employers equate to happy employees which benefits everyone.

      You are proposing nothing more than unfettered, fuck the worker capitalism.  Should an economic system work for us, or do we owe it our all with compensation?  If a business has to keep wages low to succeed, they shouldn’t be in business.  Without such Republican Low Wage Capitalists, it’s not that jobs don’t exist, but they shouldn’t have been there in the first place.

      If Albertson’s can’t make it, they are doing something wrong. I think that’s one of those business principles that you suggest we union people need to learn. Stop blaming fair wages for their failures and business decisions.  Albertson’s is doing fine here in FL.

      Safeway and Kroger, being the dominant grocers in the Denver area are only competing with each other.  That’s good for the consumer.  But when their profits are up and they are pleading poverty, gimme a fucking break.

      1. MRD isn’t so much proposing FTW capitalism, as joining the vast pro-employer alliance that is defending and promoting FTW capitalism. One of the Google Ads that comes up with this discussion on some blogs is for the Workforce Fairness Institute (google it). This anti-union organization’s website pops up a splash screen graphic vaguely (and perhaps falsely) implying that 48,000 workers have petitioned congress not to pass the Employee Free Choice Act. When you check their ABOUT page, it explains that,

        WFI is funded by and advocates on behalf of business owners …

        This isn’t promoting fairness for the workforce, it is promoting union-free privilege for the employers who fund the organization. And this is one of dozens of such organizations that so deceive.

        Such organized and widespread deception calls into question whether there aren’t people (perhaps like MRD?) who are employed by these pro-business organizations to troll blogs for the sole purpose of “educating” the public to the employers’ point of view.

    2. Red-baiting union workers is so Twentieth Century. Can we not get real?

      The question of union is an interesting one. The grocery chains are competitors, except when it is time for negotiations. At the bargaining table, the grocery chains act in unison; i.e., they effectively have their own union.

      They bargain together, at the same table. King Soopers is always present at Safeway negotiations, for example.

      They make the same contractual offers.

      They introduce these offers at the same time.

      They have a behind-the-scenes agreement, which Safeway has described, but has not released to the union, nor to the public: if Safeway workers strike, says Safeway, then according to provisions of this agreement, King Soopers will lock out its workers.

      This is no idle threat. In 1996, when King Soopers workers voted to strike, Safeway locked out its workers.

      It appears that the grocery chains see the value in union, even when they are fierce competitors.

      So why shouldn’t unionized workers be free to carry out their own best strategy to get a good contract?

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