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The Sacramento Bee reports that embattled Raley's has finally achieved a measure of labor peace, coming to a contract agreement with the United Food and Commercial Workers (UFCW) that effectively ends a 10-day strike against the company.

According to the story, both sides got part of what they wanted - Raley's got wage concessions, and the union fought back an attempt by the retailer to restructure its health plan and "eliminate coverage for Medicare-eligible retirees." Specifics of the contract agreement have not been disclosed, and it still needs to be ratified by unionized Raley's employees.

However, as the story points out, what is unknown at this point is whether Raley's achieved enough savings to make it competitive in the long term with the non-union retailers invading its markets, such as Walmart, WinCo, Costco, and Tesco's Fresh & Easy neighborhood Markets.
KC's View:
Raley's already has taken a hit in terms of Thanksgiving business, and it is going to have to do some serious work to win back some of the good will it has lost.

The question that Raley's has to answer is whether it can really be effective long-term. Because if it is counting on reduce labor expenses as making the difference, I suspect that it could be making a mistake.

The real issue is making Raley's an evolving and compelling shopping experience. And cutting down on labor costs isn't the solution.