Sunday, December 30, 2007

UFCW Union to Organize Fresh & Easy Clerks in 2008

Fresh & Easy Buzz has learned the United Food and Commercial Workers Union (UFCW), the retail supermarket clerks' union in California, Nevada and Arizona where Tesco's Fresh & Easy Neighborhood Market has its stores, plans to launch a union organizing campaign designed to sign-up workers at Fresh & Easy stores beginning shortly after the new year.

The retail clerks' union has already had representatives out in front of the stores at nearly every Fresh & Easy store grand opening, especially in Southern California where the majority of the grocer's 27 stores have been opened to date. The union representatives, joined by a coalition of labor groups, have been handing out literature and information to store employees and informing customers that Fresh & Easy stores aren't union like nearly all of the region's chain supermarkets and major independents are.

Additionally, a coalition of community groups in Southern California is working with the union, asking Tesco to among other things sign a pledge promising to meet certain neighborhood and community goals and criteria in return for being able to do business in the communities.

Most of the chain supermarkets in California, Nevada and Arizona are union stores. These chains include: Safeway Stores, Ralph's, Albertsons, Stater Bros., Save Mart/Lucky, Raley's Superstores, Basha's and others. Additionally, most multi-store independents in the three-state region are union stores as well. Even many large, single store independent supermarkets are union shops.

On the other hand, Tesco's Fresh & Easy joins a growing list of non-union food retailing chains in the three states. These include Wal-Mart, Whole Foods Market and Trader Joe's. The UFCW has been working on organizing Wal-Mart food retailing employees, especially in California where virtually 100% of chain, regional and large independents are union. To date, however, the union hasn't been successful in getting a pro-union vote from Wal-Mart employees.

The same is the case with Trader Joe's employees. In fact, the UFCW has pretty much given-up on trying to unionize TJ's retail clerks at this time.

With its rapid growth plans for the region, Fresh & Easy is a key target for the union. Additionally, all the major supermarket chains in the region recently signed a new multi-year contract with the UFCW. The union has publicly said the new contract is the best one for employees in many years. It includes decent pay raises, and in terms of the health benefits package, it actually provides for a reduction in the amount of co-pays workers pay out of pocket for doctors visits and prescription drugs. The supermarket clerks health insurance package is considered one of the best in the U.S.--not just for retail clerks but for workers in all fields and professions.

For example, a journey-level supermarket clerk in California (a clerk with one year of full-time work experience at 40 hours per-week under his or her belt), makes about $21 per hour. They also receive premium pay for any hours worked over a certain time at night. Additionally, they receive double-time for working on a Sunday (double the hourly wage) and triple-time when they work on a national holiday.

On top of this excellent pay package, the unionized retail clerks receive a very generous medical insurance plan. It includes full medical coverage, with minimal out-of-pocket expenses for doctors' office visits and prescription drugs. It also includes dental and vision benefits for a small premium relative to what most others have to pay. According to independent analysis of the health plan, when it is included along with the hourly salary (fully burdened) mentioned above, the total hourly wage of a journey-level clerk is about $35.

In contrast, Tesco's Fresh & Easy Neighborhood Market is currently paying an average hourly wage of $10 hour for retail clerks who do a similar job as the unionized supermarket clerks do. Fresh & Easy's retail managers are paid more.

Further, the majority (about 60%) of these clerks work part time, averaging 20-25 hours week. Tesco does offer a health plan for its employees, both for full-time and part-timers. However, it doesn't compare to the UFCW plan the union supermarkets like Safeway, Von's, Stater Bros. and others offer. Fresh & Easy's employee contributions are much higher, as are its co-pays for everything from office visits to prescription drugs. And, unlike the UFCW plan, dental and vision aren't available at as an affordable cost. Even adding in the benefits from the health plan to the hourly wage like we did with the union plan, the convenience-oriented grocer's fully-burdened hourly wage still doesn't come close to the unionized supermarket fully-burdened wage.

The UFCW Campaign

According to a number of sources inside and outside the union, the UFCW plans to make Southern California, where Tesco has the majority of its Fresh & Easy grocery markets, ground zero for it's campaign to organize store clerks. According to federal law, a retailer (or any other business) must allow employees to organize, create a petition and ballot, and ultimately vote amongst themselves as to if they want to join a union or not.

The UFCW also plans to organize in Arizona, and to a lesser degree in Nevada. Union plans also call for it to enlist a number of high profile California celebrities and local and national politicians in its campaign to organize the store-level workers. In fact, Democratic Presidential candidate John Edwards has already sent Tesco a letter requesting the retailer not try to stop union organizing.

California is a strong union state in the retail food sector. Whole Foods Market, Inc., which has about 45-50 stores in the state, has been able to avoid becoming union do to the fact that in those cases where store-level employees have voted on a union petition, the majority rejected it, choosing to remain non-union.

Wal-Mart, on the other hand, has been harder for the UFCW to crack in terms of getting a vote from it's store-level food clerks. Why? First, there aren't very many Wal-Mart Supercenters in California (or Nevada and Arizona for that matter). As such, it makes it more difficult for the union to organize workers.

Additionally, Wal-Mart has become very adept at keeping union workers at bay--and in encouraging its employees to vote non-union if a union ballot is voted on. We aren't suggesting the retailer has broken any federal laws we are aware of. Rather, there are provisions within the law that allow company's to do certain things, like hold sessions with workers on why they shouldn't join the union. By the same token, union organizers are allowed to meet with workers, as long as they follow certain provisions for doing so in the law.

Our sources tell us the UFCW organizing campaign targeting Fresh & Easy's store-level workers will be primarily grass-roots, as most union organizing campaigns are. However, we're told there also will be a heavy media component--especially public relations, targeting the print and broadcast media with stories about workers and comparing Tesco's salaries and benefits' plan to that offered by the unionized supermarkets, especially in California.

Speaking of these supermarket chains, they aren't too pleased with Tesco's non-union status at its Fresh & Easy grocery markets, just as they aren't real happy about Whole Foods, Wal-Mart and Trader Joe's.

In fact, Safeway, which a number of analysts are saying could be most hurt by the Fresh & Easy stores, just signed a very worker-friendly contract with the UFCW before Christmas. Considering how much more Safeway and the other chains are paying their store-level workers, the UFCW is determined to not let these grocers lose market share to non-union Tesco. Rather, they plan on bringing the British grocer into the union fold just as they have with nearly all the other "big boys" in the region.

Tesco is the fourth largest retailer in the world, and is actually bigger in terms of overall sales than any other food retailer in the state. And that includes some huge national players: Kroger Co., which owns the Ralph's chain, the market share leader in Southern California; Safeway Stores, Inc., which owns Safeway (number one market share) in Northern California, and Von's (number two market share) in Southern California; and Albertsons, which is owned by mega-grocer Supervalu, Inc., the second largest food retailer in the U.S.

Tesco also plans to enter Northern California with its Fresh & Easy stores in 2008. The retailer already has two confirmed sites, one in San Jose and another in San Francisco. The grocer's real estate representatives are locking up locations as we write this. Our sources tell us Tesco wants to open at least 50 stores in Northern California, from the Bay Area north to Sacramento, by the end of 2009.

Northern California, especially the San Francisco Bay Area, is the strongest region in the U.S. for the UFCW. Even many small, single store independents in the Bay Area are union stores. Additionally, local Bay Area governments are generally very pro-union. Tesco will find that when it comes time to choose a side, if that happens, these local legislators will go with the union hands down.

2008 is going to find Tesco dealing with a strong union movement and campaign, especially in California. The question will be how the retailer responds. Further, the retail prices in the Fresh & Easy stores are currently super-low; lower than most supermarkets in the three-state region. This is in fact a major positioning aspect of Tesco's marketing with the Fresh & Easy stores: a low-price leader on basic groceries, combined with being a fresh, prepared foods store.

The $64,000 question is: If Tesco has to pay the same union wages at its Fresh & Easy stores, and offer the same generous benefits package that Safeway, Ralph's, Save Mart and the likes currently do, can the retailer still offer the excellent low prices it is offering on basic grocery items in its stores, as well as the reasonable retails it currently has on most of it's fresh, prepared food items? If not, does this mean one leg of Fresh & Easy's two-legged retail marketing stool (Combined low-priced, convenient basic grocery store/semi-upscale fresh foods and specialty store) will be sawed off?

These are questions Tesco will soon have to answer if the company hasn't alread reached a conclusion. Beginning in a few weeks the UFCW will more fully develop their campaign to organize Fresh & Easy store workers. Then, later in 2008, the union plans to go full-throttle to organize and get the store workers to vote on joining the United Food and Commercial Workers union.

Friday, December 28, 2007

Fresh & Easy 101

We've selected a few linked articles (see Fresh & Easy Bibliography below) that provide a good background on Tesco's Fresh & Easy Neighborhood Market for you, our readers.

The first Fresh & Easy stores opened in early November in Southern California. In early December, five stores opened in the Las Vegas, Nevada metropolitan area. In mid-December the first Arizona Fresh & Easy grocery markets opened in suburban Phoenix.

We chose the articles linked below because they will provide you with a good overview of the Fresh & Easy venture, store format, operations, marketing plans and other issues. Not only will reading them qualify you to pass Fresh & Easy 101, but you will be on your way to completing Fresh & Easy 102 (advanced) as well. Happy reading!

Fresh & Easy Bibliography:

A clerk checks the perishable code dates on a package of products in the prepared foods section of the Fresh & Easy grocery market in Los Angeles. As you can see in the photo, the stores' merchandise a huge selection of prepared and refrigerated ready-to-eat, ready-to-heat and grab-and-go foods. (photo: Courtesy LA Times.)

'Food Chronicles' Blogger on Fresh & Easy

Fresh & Bumpy?

Food blog Food Chronicles offers its opinion on the look, format and product selection of Tesco's Fresh & Easy grocery markets.

The blogger, who has shopped in the stores, responds to an article titled "Fresh & Bumpy," and offers its own written "two-cents" about the piece, as well as the blogger's own analysis of the stores and Fresh & Easy's private label products.

Read the Food Chroniceles blog story here.

Natural~Specialty Foods Memo On Fresh & Easy

The food and grocery industry blog Natural~Specialty Foods Memo has been writing a lot about Tesco's Fresh & Easy Neighborhood Market.

The blog recently reported, and wrote about the grocer's plans to move into Northern California next year.

Additionally, they have a number of pieces about Fresh & Easy and other small format stores, including deep-discounter ALDI, the Giant Eagle Express stores, Whole Foods' Market, Inc.'s new Whole Foods Express prototype store and others.

The blog also has numerous stories about Wal-Mart's research and development efforts into a small format grocery market of their own. Natural~Specialty Foods Memo calls the format "Small Marts."

Further, the publication has a recent article about two small format natural foods stores--Sunflower Market, which is owned by supermarket industry giant Supervalu, and Sunflower Farmers Market, a fast-growing natural foods chain started by the former founder of Wild Oats Markets and based in Boulder, Colorado.

Both Sunflower Market and Colorado-based Sunflower Farmers Market plan on building numerous new stores in the next five years, posing a potential challenge to Whole Foods' dominance of the natural and organic products retail category, according to the blog.

Natural~Specialty Foods Memo calls these small format natural foods stores "Natural Born Category Killers." It calls them this because the small format natural and organic products stores are no frills in style, carry a smaller selection of products than Whole Foods--and put a major emphasis on low prices, which is the chains' key positioning element in the category.

The blog's address is:

After reading a couple pieces, we typed in Fresh & Easy Neighborhood Markets, Fresh and Easy, Wal-Mart, Small Marts, Express stores, small format revolution, Sunflower Farmers Market, Sunflower Market, ALDI and Tesco, and got access to numerous stories about Fresh & Easy and other small format grocery markets.

You can also find the Fresh & Easy and small format stories by looking at August through December in the blog archives.

CNBC Interviews Fresh & Easy CEO Tim Mason

Fresh & Easy CEO on TV

On December 19, Cable TV business channel CNBC interviewed Tesco's Fresh & Easy Neighborhood Market's CEO Tim Mason about the retailer's USA venture.

Joining Mason on the program were a panel of business experts to discuss Tesco's (the world's third-largest retailer) Fresh & Easy format, store performance to date, operations, and distribution chain, along with other issues.

You can read a brief synopsis of Mason's (pictured above) remarks here. Also, you can watch a video of Mason and the CNBC panel here.

Tesco currently has 27 Fresh & Easy Neighborhood Market stores in Southern California, Arizona and Nevada. The stores are a hybrid discount, convenience-oriented grocery store and fresh, prepared foods retailer.

Fresh & Easy grocery markets average 10,000 to 13,000 square feet. The store's offer a selection of Fresh & Easy brand private label and national brand basic groceries, along with an extensive selection of fresh, prepared foods. The stores also offer fresh produce, fresh meats, wines and craft beers, and a selection of natural, organic and specialty groceries.

Fresh & Easy to recycle holiday gift cards

Green post-holidays at Fresh & Easy stores

Taking a page from its parent company's Tesco branded stores in the United Kingdom (U.K.), Tesco's Fresh & Easy Neighborhood Markets in the USA is placing drop boxes in its 27 stores in Southern California, Arizona and Nevada, where customers can put gift cards for recycling.

The proceeds from the sale of the gift cards will be donated by Tesco's Fresh & Easy to American Forests, a non-profit organization that plants trees in restoration areas throughout the United States. for every dollar donated, American Forests will plant one tree, the group says.

Read more about Fresh & Easy's gift card recycling program here and here.

Tesco's Fresh & Easy Neighborhood Market has said a key aspect of its positioning as a food retailer in the U.S. is to be a "green" or environmental grocer. The gift card recycling program is just one of the many similar programs the retailer says it will do on a regular basis under its "green grocer" commitment.

Tesco's supermarkets and other format retail stores in the U.K. also are recycling gift cards and donating the proceeds from the sale of the cards to non-profit organizations.

One question: We didn't see anything on Fresh & Easy's news release about the grocer making a matching donation of any kind to American Forests? We're checking on that with the retailer--and will get back to you with their answer. Of course, if you know--let us know.

What is Fresh & Easy Buzz?

Welcome to Fresh & Easy Buzz: The Blog
About Fresh & Easy Buzz:

Fresh & Easy Buzz is a publication dedicated to reporting on, writing about and analyzing all that is Tesco's Fresh & Easy Neighborhood Markets.

British-based, international retailer Tesco plc. launched its Fresh & Easy Neighborhood Markets stores in the Western U.S. in November, 2007. To date, their are about 30 stores open in Southern California, Arizona and the Las Vegas, Nevada metropolitan region. Plans call for 200 Fresh & Easy stores by the end of 2008. Beginning in 2008, Tesco also will be branching out to Northern California with Fresh & Easy stores. The retailer also is looking at putting stores in New York, Florida and Chicago.

In addition to offering news stories and other pieces written by the international business press and grocery industry trade publications on the blog, we will be reporting and writing original news, features and analysis on Tesco's Fresh & Easy Neighborhood Markets. The blog is all Fresh & Easy, all the time.

We'll cover all the BUZZ about Fresh & Easy, from hard news to gossip. We invite Fresh & Easy Neighborhood Market employees, customers and others interested to email us at: with any information, news, ideas or thoughts you have on and about Fresh & Easy.

We especially want employees to write us about your experiences working for the grocer and at the stores. You need not give us your name. And we will protect your confidentiality 100 percent. We also encourage shoppers to write us about their experiences and offer their opinions about the stores. If you ask, we also will not publish your name. It's up to you. Use our "comments" feature as well to comment on any story you read, or to just offer your opinions regarding anything Fresh & Easy.

What's a Fresh & Easy Neighborhood Market:

Fresh & Easy stores are small format (average 10,000 to 13,000 square feet) grocery markets, designed to provide convenient service to shoppers. Think of the stores as sort of a cross between a small, neighborhood food store with low prices for basic grocery items, and a Trader Joe's.

Fresh & Easy stores sell a selection of private label and national branded basic grocery products. The stores that have thus far opened are offering these basic grocery items at retail prices far below convenience stores, and even lower than most supermarkets. The prices at present are comparable to discount or warehouse style grocery stores.

Fresh & Easy grocery markets also offer an extensive selection of ready-to-eat, ready-to-heat and grab-and-go fresh, prepared foods. These prepared foods range from bagged salad greens, to sandwiches, basic dinner entrees and side dishes like mac n' cheese, chicken salad, mashed potatoes and many other items, to more upscale prepared foods offerings like higher- end meat, seafood, meatless and ethnic foods entrees, side dishes and even complete dinners.

Fresh & Easy stores also sell a selection of natural and specialty groceries and some non-foods items. The stores have fresh produce departments which offer fresh fruits and vegetables. (Like Trader Joe's the fresh produce comes in containers or bags.) Fresh & Easy markets also offer wines and craft beers like Trader Joe's does. The small format grocery markets also sell fresh meats and poultry in self-service cases.

The format is a hybrid of Tesco's Express grocery markets in the United Kingdom (U.K), which are part convenience store and part upscale food store. The Fresh & Easy format stores offer a larger selection of prepared foods than do the Tesco Express stores in the U.K. Other than that, and a couple of other differences, the formats are very similar. Tesco's Express format has been very successful in the U.K and in other parts of Europe where the stores are located.

Why Tesco's Fresh & Easy Neighborhood Markets are Important:

Tesco plans to spend billions of dollars on its Fresh & Easy Neighborhood Markets venture in the USA. No foreign food retailer has ever launched such a massive retail venture in the U.S. Some sources say Tesco's plans are to have 500 Fresh & Easy stores in the USA in five years, with estimated sales of $6 billion.

The Fresh & Easy format also is totally experimental in terms of large-scale, national food retailing in the U.S. Its a combination basic, low price-focused, limited assortment grocery store on the one hand, and a semi-upscale, fresh and prepared foods store on the other. Additionally, the stores' are attempting to be what they are in a retail selling space of about 10,000 square feet.

Tesco's Fresh & Easy is by no means the first small format food store in the U.S.--nor is it currently the only one. Small format mom and pop grocery stores, neighborhood supermarkets, convenience stores and small-size, independent natural foods stores have existed in the USA for decades, even centuries in the case of the mom and pop food stores.

Further, large supermarket retailers like ALDI, which owns Trader Joe's and also has almost 900 ALDI small format discount stores in the U.S. have been around for years. However, Fresh & Easy's combination of a low-priced basic grocery store, and fresh, prepared foods retailer (it's hybrid format nature), it's small store size, and its scope in terms of the number of stores Tesco is building in such a short period of time, all make it revolutionary in U.S. food retailing history.

Welcome to Fresh & Easy Buzz: Join Us:
We plan on covering all the BUZZ on Fresh & Easy: hard news, original reporting, what others in the press are saying, gossip--and more.
We also want to be an interactive blog. We welcome comments from the blog's readers. We also ask for your input. Fresh & Easy employees, customers, supermarket industry employees and experts; we ask you to email us with any Fresh & Easy news, comments, opinions, tips and the like. It's only by harnessing the million-fold power of the web that we can bring our readers the BEST OF THE BUZZ about Tesco's Fresh & Easy Neighborhood Markets.

Our email address is:

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