retail news in context, analysis with attitude

The San Diego Union-Tribune reports that while the shelves are not empty, there is increasing evidence that when the Teamsters decided to support striking members of the United Food and Commercial Workers (UFCW) union by respecting picket lines set up at area distribution centers, they managed to significantly slow down the shipment of goods to affected stores.

If the strike continues to next Thursday, it will be two months since union members 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.

While replacement workers are being used both in-store and to make deliveries, spokesmen for the three chains are not commenting on the impact of the Teamsters' move on their in-stock positions.

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. Some 70,000 employees have been affected by the labor action.

Negotiations, aided by a federal mediator, were restarted this week even as the state's Attorney General initiated an investigation into whether an agreement among the three supermarket chains that guarantees profit sharing and revenue sharing in the event of a labor strike violates state and federal antitrust laws.

Among some of the instances cited by the Union-Tribune:

  • Meat at Vons and bacon at Albertsons carrying already-passed expiration dates.

  • "Many of the more popular selections of Gerber baby food had been depleted, supplies of packaged deli meats were dwindling and shelves reserved for five brands of Emeril's spaghetti sauce and Health Harvest Apple Sauce were empty."

KC's View:
Heavens! No Emeril's sauce? That alone would send us scurrying to an independent store not being picketed.

There was an interesting column yesterday by Rick Nichols of the Philadelphia Inquirer, who wrote about the strike in terms of its causes and the economic impact on the state…and eventually, the country:

"Scared to death of crushing competition, the chains are preemptively asking unionized clerks for concessions, including steep health-benefit cuts," he wrote. "Wal-Mart's bargains, of course, come at a price. Its nonunion workforce makes roughly $9 an hour, about half the pay of the 70,000 organized clerks. By slashing wages, Wal-Mart can easily undercut competitors on grocery prices (often by as much as 20 percent), dominating the wage and retail landscape.

"But the state ultimately will end up poorer, two independent studies conclude - the result of generally lowered incomes and higher outlays for health and other services shifted to the public sector."

The question Nichols raises is one that Wal-Mart supporters will dispute has having any relevance, and that its detractors will say is the ultimate issue"

What is the price of a bargain?

We keep hearing that there is little evidence that either side is ready to make any movement to settle this thing. If anything, the UFCW seems energized by the Teamsters' support and the antitrust investigation (even if the latter is not expected to gain it any real advantage), and the chains seem to be in denial about the impact the strike is having on business.

And speaking of denial…