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Wednesday, Jul 24, 2024

Strike Would Be Disaster for Grocery Stores, Workers, Customers

Editor’s Notebook , Thomas York

It’s difficult to fathom exactly why, but we may be headed toward a devastating strike in the retail grocery industry , the second in three years.

As we all know, clerks and other workers walked out , and then thousands were locked out , after negotiations stalled with grocers in 2004.

The bitter dispute ended when workers finally agreed to a two-tiered wage pact, which features reduced pay and benefits for new hires.

The contract has been a labor sore spot since, and the union would love to take back concessions wrought from the largest operators in Southern California: Albertsons, owned by Supervalu Inc.; Ralphs, owned by Kroger Co.; and Vons, owned by Safeway Inc.

(It’s important to note that since the strike, the old Albertsons parent disappeared in a private buyout; the new owners have since closed or sold big chunks of stores acquired in the deal.)

Now let me say that even though I edit a conservative business newspaper, I have empathy for the plight of workers and their families.

I clearly remember walking the picket line with my dad, a union welder, when I was 4 or 5. Many wage earners in my family benefited from union jobs in southern Ohio, not to mention the coal mines in Appalachia, in the ’30s and ’40s.

It’s not easy wearing a blue collar.

Just look closely at the wages earned among the highest-paid store clerks, about $18 an hour for a 37.5-hour week, plus a few hours of overtime.


That’s less than $40,000 a year for veterans with 10, 20, 30 years in the business.

Retail store workers have become point men and women in the larger battle being fought in this country, and illustrate the tensions building between employer and employee in today’s rapidly devolving U.S. economy.

While I deeply sympathize with union workers, I also see the downside of organized labor and its leaders, who can be inflexible, given the emphasis on seniority and fossilized work rules rather than ability, initiative and skill.

The U.S. automobile industry has become a classic case study of a sector saddled with enormous health, pension and wage concessions made over the decades to keep peace in the rank and file.

So much so that Germany’s DaimlerChrysler wants to sell off majority interest in Chrysler, in large part because it’s saddled with overhead that makes it difficult to turn a profit.

Here in Southern California, the big three grocery chains say they need concessions because of looming competition, mostly from Wal-Mart’s 90,000-plus-square-foot “supercenters.”

Since the 2004 strike, the retail clerks’ union, stores and their local government cronies throughout the state have conspired to block Wal-Mart stores wherever possible, often claiming bigger stores create too much traffic congestion and pollution.

Thus, Wal-Mart’s impact hasn’t been felt as deeply as predicted three years ago.

Still, Wal-Mart has managed to open 20 super stores statewide, with plans for 22 more, including two in North County. (The San Diego City Council banned the construction of retail stores in excess of 90,000 square feet last winter.)

The point is that change is inevitable, and local government won’t be able to forever ban Big Box stores selling groceries. Protectionism won’t work, never has, never will. If not Wal-Mart, then there will be other entrants.

Another competitor on the horizon is the Tesco supermarkets, the very successful global food retailer from Great Britain that’s coming to town.

Middle Ground

I’d suggest the chains and workers seek the middle ground before the inevitable happens; before stores and their jobs disappear.

The chains will have to change how they do business, and clerks might have to offer concessions in terms of how they do work.

We’ve all been hit by change, and by competition, which is unrelenting.

The current contract talks between grocery stores and workers will have far-reaching implications, whatever the outcome.

But another strike will be an unmitigated financial disaster for the stores and workers, as well as millions of customers.

Thomas York is editor of the San Diego Business Journal.


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