Dive Brief:
- The United Food and Commercial Workers has announced plans to begin demonstrating and communicating directly with consumers as ongoing negotiations with Ralphs, Vons and Albertsons fail to make headway, according to union locals. More than 500 stores could be affected.
- The parties have been negotiating wage and healthcare-related aspects of their contract, which expired in March 2019. According to UFCW, the stores are offering most workers a 1% salary increase and changes to their healthcare plans, which they deem insufficient to afford the cost of living in Southern California.
- Ralphs posted a statement to its website stating that it has offered “top-rate” wage increases without making changes to healthcare benefits and while protecting current pensions.
Dive Insight:
UFCW announced its intention to begin consumer-focused demonstrations following its meeting with store officials on August 14, stating that the stores are only interested in offering “a nickel a year.” Local unions representing roughly 60,000 workers of Albertsons’ Vons and Kroger’s Ralphs voted to authorize a strike in June.
The union organized a rally last week at Ralphs in Mission Valley where clerks, butchers, deli employees, local politicians and union workers assembled, NBC San Diego reported.
A public display and increased consumer outreach could build sympathy for the union and the workers that it represents. Other residents in Southern California may be feeling a similar squeeze as inflation has increased at a rate of 4% each year in Los Angeles and Orange County compared to just 2.9% nationally. This could convince some shoppers to take their business elsewhere until the stores offer workers a different deal. Some shoppers, however, may worry that raising worker wages could translate to higher food prices.
Even if consumers remain neutral, they may choose to shop elsewhere to avoid the increased congestion and public attention until the demonstrations subside. Other prominent grocery retailers in the area include Trader Joe’s, Aldi, Sprouts Farmers Market and Walmart, providing put-off shoppers with other options.
Regardless, the optics are likely concerning for Ralphs, Vons and Albertsons. In April, 31,000 Stop & Shop workers led an 11-day strike that resulted in a $100 million loss for banner owner Ahold Delhaize. The strike garnered national attention, with Senator Elizabeth Warren showing up to a picket line with doughnuts and former vice president Joe Biden joining a rally.
But this is not the first time that this trio of retailers has found themselves involved in protracted union negotiations. In 2003, 70,000 Southern California workers engaged in a four-month strike that created $1.5 billion in lost revenue for the stores.
Ralphs, Vons and Albertsons will remain open during demonstrations and state they are committed to continuing negotiations.
"The negotiations process can take time to reach reasonable solutions that are best for our associates, our communities and our company," a Ralphs spokesperson wrote to Grocery Dive via email."Customers will find all Ralphs stores throughout Southern California accessible, fully stocked with fresh merchandise and staffed by our friendly associates. We will again meet with the unions Thursday, Aug. 22 through Sunday, Aug. 25 to continue to work toward a fair and balanced agreement for everyone involved."
