Wednesday, June 4, 2008

News and Analysis: UFCW Union Takes its Tesco Union Organizing Campaign Across the Pond to the United Kingdom Beginning Today

The United Food and Commercial Workers Union (UFCW), the union for unionized retail food store clerks employed at union supermarkets in the United States, has taken its organizing campaign against Tesco's Fresh & Easy Neighborhood Market USA across the pond to the retailer's home country of the United Kingdom.

As we've regularly reported in Fresh & Easy Buzz, the UFCW has been attempting to unionize store-level employees at Tesco's Fresh & Easy grocery stores in Southern California, Arizona and Nevada since shortly after the first of the current 61 small-format, convenience-oriented grocery markets opened in late October, 2007.

To date, the union's organizing campaign has been on U.S. soil, in Southern California, the Phoenix Metropolitan region in Arizona and in the Las Vegas, Nevada Metropolitan area, where Tesco has its stores.

The UFCW organizing campaign to date has primarily consisted of a media relations campaign attempting to get stories published in the press about its efforts to organize Fresh & Easy employees and what it says is Tesco's "anti-union" position regarding Fresh & Easy, placing informational pickets outside the Fresh & Easy grocery stores, and leafleting neighborhoods where Fresh & Easy stores are located with flyers, including those with text describing two past situations where Tesco in the UK was caught selling out of date perishable foods and foods labeled "organic" that turned out to not be organic. Tesco settled both of those claims with UK government regulatory authorities.

However, as we were the first--and as far as we can find only publication--to report here, the UFCW had planned to intensify its union organizing campaign against Tesco beginning this summer.

UFCW's 'The Two Faces of Tesco' UK campaign

Today, the UFCW began the first phase of its more aggressive organization effort by launching what it calls its "The Two Faces of Tesco" campaign in the international retailer's backyard, in the UK.

A major thrust of the UFCW's UK campaign is to draw attention to what it says is Tesco's close relationship in the UK with labor unions, including USDAW, which represents workers in Tesco UK supermarkets.

Emily Steward, a campaign director, says Tesco's close relationship and cooperation with Britain's labor unions hasn't been replicated across the pond in the U.S. with its Fresh & Easy Neighborhood Market division. In fact, she argues Tesco is fighting any form of union representation in its Fresh & Easy grocery stores in the USA. (Hence the "two faces.")

"Tesco has a great reputation for employment rights and corporate responsibility in the UK, but this is sullied by its behavior in the US," Steward says.

Tesco says it isn't true the company is anti-union in the U.S. at its Fresh & Easy Neighborhood Market division. Fresh & Easy CEO Tim Mason has said the retailer's position is that store level workers have the right under U.S. laws to organize and to join a union if they choose to. In other words, it is up to them, according to Tesco's official position.

U.S. federal labor laws allow unions to organize store-level workers, and for companies to oppose such organization, as long as both parties follow a set of guidlines in doing so. Under these laws, employers can't prevent employees from talking with union representatives, organizing, and gathering signatures on a petition calling for union representation. If the appropriate number of signatures are gathered on the petition, and various procedures followed, the employees than can vote on union representation.

The U.S. labor laws offer lots of "wiggle room" for both sides in them though.

The law does allow employers to work against union representation in a variety of ways, including meeting with employees and encouraging them not to form a union, as well as using other techniques at their disposal to stop unions from forming at their stores.

One of these techniques, which has become popular in the U.S., is for companies to hire consulting firms which specialize in persuading employees not to join a union. Many of these firms are owned by former union organizers. What these firms do is legal under U.S. laws as long as they don't violate the laws.

In fact, last week Fresh & Easy Buzz received a solicitation email, either intentionally or unintentionally, from one such popular U.S. firm.

Below is the solicitation email we received on May 27:

UFCW Fresh and Easy Corporate Campaign Tuesday, May 27, 2008 9:06pm

From: "Walter Orechwa"

To Whom it may concern,

Please forward to management, HR or the Labor Relations group.

Projections, Inc. can assist Fresh and Easy in remaining Union Free and battling this corporate campaign. Check us out at for more information.

Best of luck, Walter Orechwa

Chief Executive Officer
Projections, Inc.
Award-winning Employee Communications

877-448-9741 Ext. 213

Since Fresh & Easy Buzz has a very long and complete description on the front page of the blog explaining the publication is independent and has nothing to do with Tesco or any competitors, we have no idea why we received the solicitation, unless the firm, which is perfectly above board in doing such a solicitation, wanted us to know about it and what it's up to for publicity reasons. If that's the case, I guess it worked; at least sort of.

Fresh & Easy Buzz has no idea if this firm has talked to Tesco to date. We doubt it though, based on the May 27 email to the blog. Additionally, to our knowledge, Tesco currently has no such firm employes to deal with the UFCW labor and unionization issue.

What the UFCW says it wants

According to UFCW campaign director Emily Stewart, what the union wants at present is to enter into a dialogue with Tesco about potential union representation for its Fresh & Easy Neighborhood Market store-level workers. She says the union has no specific demands at this point in time.

The majority of chain and independent supermarkets in California, Arizona and Nevada are union stores. This includes Safeway Stores, Inc.'s Vons' and Safeway banner operations in California, Arizona and Nevada, Kroger Co.'s Ralph's chain, SuperValue, Inc.'s Albertsons and Bristol Farms chains in the markets, Bashas in Arizona, Raley's in California and Nevada, and others, including most multi-store and large single-store independents

There are other major non-union food retailers in the market regions besides Tesco's Fresh & Easy. These include Wal-Mart, the largest retailer in the world and in the U.S., Whole Foods Market, Trader Joe's and Sprouts Farmers Markets, all with numerous stores in one or more of the three states where Tesco currently operates its 61 Fresh & Easy grocery stores.

British MP part of UFCW UK campaign

The UFCW has recruited a member of Britain's Parliament, MP John Cruddas, to help lead the union's campaign against Tesco in the UK.

MP Cruddas spoke at the campaign's launch today in the UK, voicing his support for the UFCW's union organizing of Fresh & Easy Neighborhood Market employees in the U.S.

“British companies which operate in the global marketplace should apply the highest standards in dealing with their workforce, both at home and abroad. What this dossier exposes about Tesco’s practices in the United States, in my view not only undermines Tesco’s reputation, but will also affect how people think about the fairness of British companies in general. I urge Tesco to put its stated principles and policies into practice and to start talking to these important stakeholders,” MP Gruddas said at today's UK campaign launch.

MP Cruddas also said today he plans to write a letter to Tesco PLC CEO Sir Terry Leahy, in it urging him to meet with UFCW officials. The MP also said he plans to lobby his fellow members of Parliament to join him in supporting the union's efforts to get Tesco to sit down and discuss the unionization issue with them.

At the campaign launch, the UFCW's Stewart said: “We (the UFCW) were genuinely excited at the prospect of building a partnership with Tesco (Fresh & Easy in the U.S.), so we are doubly appalled at the way it is behaving towards us and the many community groups which have tried and failed to meet with it.

“Our dossier exposes Tesco’s two faces, and we intend to campaign in Britain to show Tesco’s other face to British people, British investors and British politicians, in the hope that they will influence Tesco to stop and think again about how they conduct their business in America. We are asking for nothing more than Tesco already does here.”

The retail food store clerks' union has been attempting to meet with Tesco executives for about two years, since the retailer announced its plans to open the Fresh & Easy grocery stores in the U.S. Thus far however, Tesco PLC CEO Sir Terry Leahy has refused to meet with UFCW representatives or to have Fresh & Easy Neighborhood Market CEO Tim Mason, or any other members of the corporate executive team, meet with the leaders of the union.

Tesco hasn't publicly criticized or fought back against the UFCW's campaign to unionize Fresh & Easy store workers though. In fact, the retailer has essentially ignored the union and its effort publicly. Rather than fight back against some of the union's charges in the press, for example, all Tesco has stated publicly is that its position is that it's up to the retailer's workers to decide if they want to join the union.

California union cashier joins in UK campaign launch

Jackie Gitmead, a store cashier at Ralph's supermarket in Encino, in Southern California, attended today's launch along with British MP Cruddas, the union's Emily Stewart, and other supporters and campaign organizers.

“We’re never going to be rich working for a grocery store, but we all deserve a shot at earning a living wage and health insurance we can afford, as well as the peace of mind to know that we won’t be let go at a moment’s notice, Ralph's cashier Gitmead, who says she has been a union retail clerk for 32 years, said today in the UK.

“In my 32 years working with the protection of a union agreement, I have enjoyed job security and union-negotiated healthcare and pensions benefits. Our colleagues at Tesco’s Fresh & Easy stores don’t have this. I have flown from LA to London because this campaign is important. I hope it will make Tesco pay attention, so that my fellow workers in Tesco’s US stores can enjoy the benefits and opportunities they deserve.”

Kroger Co.-owned Ralph's, a unionized food retailer, is the leading supermarket chain in Southern California, along with Safeway Stores, Inc's Vons' divsion, which also is a 100% union shop.

State of the union movement in the U.S.

The UFCW currently has 1.3 million worker-members in the United States, Canada and Puerto Rico. The majority of those 1.3 million members of the union work in retail food and grocery stores. However, some also work in the related food processing and meat-packing industry.

The U.S. supermarket industry, like the U.S auto industry, is one of the few remaining majority-union industries in the United States. Nearly all of the country's top food and grocery chains are unionized. Additionally, in states like California, even most multi and single-store independent grocers are unionized, their employees being members of the UFCW.

Tesco has not issued a comment on the UFCW's "The Two Faces of Tesco" UK campaign at press time.

Intensified campaign comes at bad time for Tesco in U.S.

The energized campaign by the UFCW--both in the U.S. and now across the pond in the UK--comes at a bad time for Tesco's Fresh & Easy venture in the U.S.

The grocer is two-thirds the way thorough a three month new store opening pause which began in April and ends at the end on July 2, when the first new store in three months opens in Manhattan Beach, in Southern California.

After that opening, Fresh & Easy returns to a planned new store opening frenzy, like it has been doing since the first store opened in Hemet, (Southern) California in late October, 2007. Between November and April, 2007, Tesco opened 61 of its small-format, convenience-oriented Fresh & Easy grocery stores, which amounts to opening a new store about every three days during that time period.

The retailer's new store opening schedule starting on July 2 and for the remainder of the year and into 2009 will be at about the same pace. In addition to opening numerous new stores in its existing Southern California, Arizona and Las Vegas, Nevada markets (including 10 new stores in the Las Vegas region that are currently being remodeled for opening fairly soon), Tesco plans to enter the Northern California Market, opening Fresh & Easy stores in the Central Valley cities of Bakersfield (5 stores so far), Fresno (5 stores so far) and Modesto (1 store so far) ; along with opening 19 initial stores in the Sacramento Metropolitan region, and 20 stores in the San Francisco Bay Area. (18 of those Bay Area stores are confirmed by Tesco, two we just reported on last week here.)

Tesco's Fresh & Easy Neighborhood Market has been using its three month new store opening pause thus far to try to improve the operations, merchandising and marketing of its existing 61 stores, including attempting to bring in more new customers and increase sales and market basket size. That effort--although in fairness it's only 60 days old--has been a mixed success in our analysis, with very little especially done in the improved merchandising and marketing areas.

The retailer has recently announced its adding 250 new items to the stores, along with introducing an improved design package which thus far has been installed in its Laguna Hills market in Southern California, and is being rolled out to all of the chain's other stores--which is most of them to date--that are housed in remodeled retail buildings

The new interior package, which includes some brighter colors, a couple wall murals and increased and improved directional and product signage, is an improvement over what the original store interiors look like. As we've written about often--and as numerous Fresh & Easy customers have told the retailer--the stores have a sterile look, and in our words lack a "sense of place" to them.

Tesco hopes the new interior enhancements will solve that problem. There has been some positive consumer response to the improvements at the Laguna Hills store, according to employees and shoppers of the store we've talked with. However, the jury is still obviously out on the store interior improvements, which are fairly minor in scope.

A former Tesco Fresh & Easy employee who worked at the headquarters office in Southern California recently told Fresh & Easy Buzz "chaos" was a good word to describe the environment at HQ since the first stores opened late last year. The former employee also said it seemed it was impossible to focus on operational and merchandising issues and improvements because the rapid new store opening pace was consuming the majority of everyone's time in the office.

Adding the UFCW's intensified union organizing campaign--including its now cross-Atlantic efforts--to this chaotic mix could be difficult for Tesco and its Fresh & Easy Neighborhood Market, which already is juggling many balls in the air with the fledgling retail venture.

As we reported some time ago, the union also has plans to intensify its current unionization campaign efforts regarding Fresh & Easy in the U.S., including using more aggressive grass- roots tactics, along with an increased media relations program, as well as getting more U.S. political leaders to join in its efforts.

As we reported here, the UFCW was able to get then candidate now Democratic nominee for President of the United States Barack Obama, who the union is supporting, to send Tesco a letter asking it to meet with union officials about the unionization issue. Before that, the UFCW got then Democratic candidate, who it supported before he dropped out of the race, to send a similar letter to Tesco.

We can report the union is working on other national political leaders to do the same, including those from the states of California, Nevada and Arizona, where Tesco currently has its 61 Fresh & Easy grocery stores.

Meanwhile, Tesco has said it has no objection to the UFCW or any other union organizing store-level workers per U.S. federal labor law. Tesco's strategy towards the UFCW can be described as one of "benign neglect" in many ways.

However, those efforts by the union, happered they say by Tesco, haven't seemed to get anywhere for the UFCW since it started them late last year, dsepite the fact Fresh & Easy store workers only make $10 hour and are part time even if they choose to be full time, which isn't an option with the exception of the store manager and assisant manager.

By comparison, an entry-level retail clerk at a union supermarket like Safeway or Ralph's in California, starts out at about $13 - $14 an hour, and after one year for full time workers makes close to $20 hour. Part time workers working 20 hours a week take about two years to reach that level. Both full time and part time union supermarket workers get a raise about every three (for full time) to six (part timers) months until they reach that journylevel status and the nearly $20 an hour wage-level.

The retail food store clerk's union benefits also are among the best of any industry in the United States, with below average co-payments, and extremely reasonable employee contributions for dental, vision and mental health insurance coverage, which is available along with medical. For example, an executive at Safeway recently told us the retail clerk union health insurance is better than his corparate coverage, as well as having lower co-pays.

The union, through member dues and employer contributions, also has a retirement pension plan for workers. A union member with about 30 years service as a supermarket retail clerk can take home about $40,000 annually in retirement benefits after those three decades of sevice. This is in addition to collecting Social Security benefits thorugh the U.S. government program.

Most publicly-owned unionized U.S. grocery chains like Safeway, SuperValu, Kroger (the top three) and others also offer employees the ability to buy stock in the company at a substantial discounted share price. Some also have employee profit-sharing programs which the retailer contributeds to each year, as do many privately held U.S. unionized supermarket companies.

Summer sizzler

Its only June, and summer is just beginning.

Like the summer weather, which doesn't start getting really hot until about July 1 in most parts of California (San Francisco aside), Nevada and Arizona, the union issue between the UFCW and Tesco is also only just beginning to heat up. The union's campaign, both in the U.S. and now in the UK, will start to heat up even more as the summer progresses. Stay tuned.

You can download the UFCW's report, or dossier, "The Two Faces of Tesco," which is mentioned in our piece here. The report compares how Tesco does business at home in the UK versus how it does business in the U.S., according to the UFCW union.

Tesco had no response at press time to the UFCW report or launch today of its campaign in the United Kingdom. If and when Tesco has a response, Fresh & Easy Buzz will report on it and write about it.

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