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Negotiators representing Southern California's top three supermarket chains and 70,000 striking members of the United Food and Commercial Workers (UFCW) union have agreed to meet this morning with a federal mediator - the first time that they have met since the strike/lockout began more than four weeks ago.

"We will go into mediation on Monday with an open mind and some level of flexibility," John Arnold, a UFCW spokesman told Reuters.

However, even as the two sides planned a meeting, the Sacramento Bee reported that the UFCW planned to ask residents of both San Francisco and Sacramento to boycott Safeway stores - believing that this move could increase pressure on the chain to capitulate to union demands.

The anti-Safeway message is being delivered via radio commercials in Northern California. The UFCW also reportedly plans to do some informational picketing at selected Safeway stores.

It was just about a month ago that union members of the UFCW walked off the job at Safeway's Vons and Pavilions units, followed quickly by a lockout of union employees at Kroger's Ralphs units and Albertsons' stores, in what was termed a "show of corporate solidarity."

The face-off is over the union's desire to preserve or improve current wage and benefit packages, while the chains are looking for a wage freeze, cuts to health and pension benefits for current employees and a substantially lower wage and benefit package for new hires.

As often is the case in these disputes, much of the conflict is being driven by the arrival of new Wal-Mart Supercenters, which are non-unionized and therefore boast lower cost structures, and therefore lower prices.

In an effort to break apart the union of the three chains, and get into a position where it can negotiate separately with the three companies, a little over a week ago the UFCW decided to stop picketing Ralphs stores in Southern California, preferring to concentrate and expand its efforts on Safeway's Vons units and Albertsons. The union said that Ralphs was not taking as hard a line in negotiations as the other two companies, and that it believed that it could reach a deal with Ralphs if it were dealing with that company individually.

To this point, it does not appear that this strategy has worked.

The New York Times this morning reports that despite the decision to meet, both sides seem more entrenched than ever. "For the cashiers and stockers on the picket lines, the fight to fend off large-scale concessions is a struggle to avoid being thrown into one of America's lowest castes, the working poor," the NYT writes. "But for the supermarkets, the confrontation, the biggest labor dispute in the nation in recent years, is a painful investment to ensure that they can survive against Wal-Mart and other low-cost rivals."

This is the first supermarket strike in Southern California in 25 years.
KC's View:
The strike may or may not settled soon, but the real question that both sides have to address is how they both are going to change in order to rehabilitate the traditional supermarket industry. A simple labor agreement is likely to be more of a band-aid…and the industry needs a helluva lot more than that.

In a piece of the weekend, The Los Angeles Times carried an analytical piece examining the future of the supermarket industry, suggesting that the successful supermarket of the future will have to be "smaller and more focused as its corporate parent learns how to operate with a lower cost structure."

Larry Del Santo, the retired chairman of Vons, told the paper that these stores "need to stay big but think small, think locally and entrepreneurially."

We agree. But we don't see a lot of evidence that major mainstream supermarket chains are doing this.

Inadvertently, The Los Angeles Times identifies one of the major problems facing the supermarket industry in an interesting piece this morning by a reporter who labored as a replacement worker at a Ralphs store in Santa Monica, Ca.

One angry shopper told the reporter, "This is unskilled work. They ought to be happy they have jobs and insurance."

Unskilled work. If food retailers positioned themselves and their employees as having specific skills - getting the best food into shoppers' hands, and giving them the best information about the food they eat - then maybe mainstream supermarkets would be more competitive against supercenters.