(Reuters circulated the following story by Kevin Krolicki on October 12.)
LOS ANGELES — The union representing some 70,000 Southern California grocery workers called a strike against Safeway Inc.’s Vons and two rival supermarket chains responded Sunday by locking out union workers.
Picket lines organized by the United Food and Commercial Workers Union formed at Vons across from Los Angeles to San Diego, one of the nation’s most populous regions and a key market for the grocery chains.
In response to the Vons strike, Albertsons Inc. and Kroger Co.’s Ralphs, which are covered by the same master contract, locked out union workers from the first shift on Sunday, a union spokeswoman said.
The contract between the United Food and Commercial Workers Union, the AFL-CIO affiliate that represents about 1.4 million workers, and the region’s three dominant supermarket chains expired on Oct. 5.
The labor dispute, which hinges on health-care costs, comes as unionized grocery workers across the United States have contracts up for a difficult renegotiation as their employers look to cut costs to offset weaker sales growth.
Union workers in Southern California voted 97 percent in favor of rejecting a two-month-old contract offer from the grocery chains and authorizing a strike Friday.
The United Food and Commercial Workers Union, also known as the UFCW, charges that the chains, using the competitive threat of Wal-Mart Stores Inc. as a stalking horse, are trying to shift hundreds of millions of dollars in health-care costs to workers through higher insurance co-payments and caps that would limit sharply limit reimbursement for surgery and other expensive treatment.
“There was just no progress,” UFCW spokeswoman Ellen Anreder said of negotiations that broke off on Saturday. “They have as yet failed to substantiate the need for these concessions.”
Representatives of the three grocery chains were not immediately available for comment.
A federal mediator had brought both sides back together for talks last week in Anaheim, California, as the strike vote loomed.
At one Vons in northeast Los Angeles on Sunday, a handful of shoppers crossed a picket line formed by about a dozen union workers carrying signs in English and Spanish, but as many turned around when strikers urged them to shop at a non-union grocery down the street.
Grocery store baggers covered by the UFCW start at $6 per hour while the most experienced workers who oversee departments make about $17.90, Andreder said. The average wage is between $12 and $14 per hour, she said.
Wal-Mart, besides being the world’s largest company, has expanded to become the biggest player in the fiercely competitive $680 billion U.S. grocery industry it joined only a decade ago. Wal-Mart is a non-union shop.
Wal-Mart’s massive scale has let it extract better terms from suppliers, widening the cost advantage between itself and traditional outlets like Kroger, Albertsons and Safeway.
Although Wal-Mart does not have grocery operations in Southern California, the company has announced plans to open about 40 hybrid grocery and general merchandise Supercenters in in the next several years.
Even after that expansion, Wal-Mart would control only about 1 percent of the grocery market in the region, Anreder said. The three dominant chains, taken together, have seen profits increase 91 percent over the past five years, she said.