retail news in context, analysis with attitude

The Los Angeles Times this morning reports that Gelson’s has signed a contract with the United Food and Commercial Workers (UFCW), simultaneously alleviating any possibility of a strike that could affect its stores and ratcheting up the pressure on Safeway, Kroger and Supervalu’s Albertsons to come to a labor agreement before the exiting contract expires on March 5.

It was just a strike, combined with a lockout, that ravaged the Southern California market three years ago. Gelson’s is the second regional chain to get a deal with the UFCW; Stater Bros. signed a contract last month.

While neither management nor labor were discussing the specifics of the Gelson’s deal, sources were telling the Times that it eliminates some of the tiered pay and health care provisions that were put in place three years ago. The last time around, Gelson’s and Stater Bros. agreed to accept whatever deal was made by the UFCW and the big three grocers; when pickets disrupted business at Albertsons, Safeway’s Vons and Kroger’s Ralphs, Stater Bros. and Gelson’s saw enormous sales increases.

This time, the smaller retailers appear to be staying ahead of the wave.
KC's View:
First of all – and our thinking has evolved on this one – we believe firmly that any agreement that does not integrate Safeway CEO Steve Burd’s thinking on health care would be a foolish deal…because it will not grapple with the most serious problem facing both these companies and their employees.

Secondly, we would be shocked if there is a labor problem in Southern California…because with Tesco coming to town, it would not be wise for any of the food retailers there to be dealing with pickets and discord.