Monday, November 10, 2008

Food Retailing & Organized Labor: Tesco's Fresh & Easy Gets Some Company as the UFCW Union Launches Campaign to Unionize Wakefern's PriceRight Banner

Southern California-based Tesco Fresh & Easy Neighborhood Market no longer is the only non-union food and grocery chain in the U.S. to be the subject of a direct, focused and aggressive campaign by the United Food & Commercial Workers (UFCW) union to unionize its chain's store-level employees.

On Friday the UFCW launched a major campaign to unionize store workers of the PriceRight discount supermarket chain, which is owned by Elizabeth, New Jersey based Wakefern Food Corp., the largest retailer-owned food and grocery cooperative in the United States.

Wakefern operates supermarkets in the eastern U.S. under two banners, PriceRight, which are price-impact, discount supermarkets, and ShopRight, which are more conventional supermarkets with a bit of an upscale flair.

The retail and wholesaler food co-ops ShopRight banner stores are unionized. However, the PriceRight banner stores aren't.

The UFCW union kicked off it campaign against Wakefern's PriceRight banner on Friday at a store in Providence, Rhode Island, where about 100 demonstrators picketed against the non-union status of the stores, Fresh & Easy Buzz has learned. The pro-union demonstrators held signs and distributed UFCW literature to store employees and shoppers.

Workers at the Providence store, and employees at a couple other PriceRight supermarkets, have expressed a desire to join the UFCW union like the workers at their sister banner ShopRight already are members of, according to UFCW spokesperson Amber Sparks. Therefore the union, which represents 1.3 million supermarket clerks in the U.S., Canada and Puerto Rico, decided to launch the unionization campaign at the Providence, Rhode Island PriceRight supermarket beginning last Friday, she says.

The UFCW's Sparks adds that after the workers expressed this desire to become unionized, Wakefern began distributing anti-union literature to their store employees, which further intensified the UFCW's decision to launch the campaign.

One of the reasons the PriceRight employees have said they want to join the union is because many of them are employed part time and therefore aren't eligible for Wakefern's health insurance plan, the UFCW's Sparks says. Under UFCW contracts with U.S. supermarket companies, part time as well as full time store-level workers are eligible for health insurance, which is paid primarily by the employer but also partially paid by workers through their union dues.

The UFCW also argues that since the ShopRight employees are unionized there exists a disparity between the workers at those stores and the PriceRight non-union supermarkets owned by the same company --Wakefern.

Wakefern Food Corp. did not have a reply to an inquiry we made regarding the UFCW campaign as of our press time today. The retailer-owned food cooperative hadn't issued a statement about the campaign as of the end of business today either.

The UFCW union's Amber Sparks says the PriceRight unionization campaign will be expanded in the coming days and weeks to other stores, both PriceRight and ShopRight units, in addition to the Providence Rhode Island supermarket.

Wakefern is owned by 43 members who individually own and operate the PriceRight and ShopRight banner supermarkets. Currently there are about 213 stores operating under the two banners. The PriceRight discount supermarkets and ShopRight supermarkets are located in New Jersey, New York, Connecticut, Pennsylvania, Rhode Island, Massachusetts and Delaware.

The retailer-owned cooperative has 2007 sales of about $10 billion.

Wakefern serves as the distribution, marketing and merchandising arm of the company. The food cooperative says the 213 stores serve over 4 ½ million customers weekly in their respective markets.

Based out of its headquarters in Elizabeth, New Jersey, Wakerfern has 2.5 million square feet of warehousing and distribution space, according to the company's Web site. It's transportation fleet is one of the largest private fleets on the east coast of the U.S. It consists of 400 tractors and 2,000 trailers, and traveled more than 35 million miles in 2007, the Web site says.

The first PriceRight discount supermarket opened in just 1995.

The PriceRight discount supermarkets average only 35,000 square feet and size, offering a limited assortment (compared to other discount supermarket chains which are generally much larger in size) of fresh foods and groceries positioned at everyday low prices.

Fresh produce is a major feature of the PriceRight stores. Each store's produce department averages 6,000 -to- 7,000 square feet, which represents about 20% of the total store's square footage. That's a high percentage compared to the supermarket industry average.

The independently-owned discount supermarkets operate on a no frills-type philosophy similar to SuperValu's Sav-A-Lot and Aldi's small-format discount stores. Sav-A-lot and Aldi stores are about half the size of the PriceRight discount supermarkets though, as are Tesco's Fresh & Easy Neighborhood Market stores.

An example of PriceRight's no-frills merchandising and operations philosophy is that the stores encourage shoppers to bring their own shopping bags. If a customer doesn't do so they must pay a nominal fee for each paper or plastic grocery bag the store uses to sack the shopper's grocery purchases in is charges the customer at checkout.

The stores also offer a limited assortment of grocery products. These include both national brands and store brands under the PriceRight private label brand.

The PriceRight banner's marketing slogan is: "To Offer Impossibly, Inconceivably, Incredibly Low Grocery Prices."

The UFCW's launch of its campaign to unionize store-level employees of Wakefern's PriceRight banner comes less than a week after Democratic candidate, and now President-Elect, Barack Obama won the Presidency of the United States by a substantial majority of votes.

As we wrote about in this November 4 election day story, "U.S. Organized Labor, Including the UFCW Union, is Feeling Good Tonight About A President Obama and Stronger Democratic Majority in Congress, "America's organized labor movement, including the UFCW, has a new bounce in its collective union organizing step following the victory of Barack Obama, along with the majority Democrat victories in the U.S. House of Representatives and U.S. Senate.

President-Elect Obama has said he favors the "Employee Free Choice Act," legislation supported by the majority of House and Senate Democrats. The act includes what's called the "Card Check Provision," which allows non-union company employees to merely check a "yes" box on a card if they want union representation rather than go through the long secret ballot voting process which is current U.S. labor law.

Organized labor is the major proponent of the "Employee Free Choice Act." The legislation passed the House by a majority but lost in the U.S. Senate by just two or three votes in 2007. Even if passed, President Bush, who opposes the measure, said he would have vetoed the act, preventing it from becoming law. He returns to Crawford, Texas as a private citizen in 72 days though, after Barack Obama is inaugurated in late January, 2009.

However, with a more pro-organized labor President, Barack Obama, who says he supports the legislation, along with a clear majority in the House and near (and possibly solid) veto-proof majority in the Senate, the unions, including the UFCW, feel sure the legislation can be passed and signed by the new President in 2009.

The majority of U.S. corporations and small businesses oppose the "Employee Free Choice Act," as do such trade organizations as the Food Marketing Institute (the supermarket industry trade group), the National Association of Retailers and the U.S. Chamber of Commerce, among others.

As we wrote about in this piece on October 28, "The UFCW Union, Tesco's Fresh & Easy, U.S. Labor Relations, and Next Week's Presidential and Congressional Election," the UFCW plans to organize numerous non-union supermarket chains beginning now and in the coming years.

In addition, we've been reporting and writing all year about the hope by the UFCW, which is one of the reasons the union worked so hard to get Barack Obama elected President even though they didn't support him in the Democratic Party primary, that if a Democratic President and Democratic majority won big in November, which they have, it, along with the other U.S. labor unions, would be able to get the "Employee Free Choice Act" passed through Congress and signed by a President Obama.

Based on recent comments by U.S. House of Representatives' Democratic Speaker of the House Nancy Pelosi, it sounds like the House will bring new legislation on the free choice act up either early in the 2009 session or towards the middle of the year.

With a now clear Democrat majority in the House of Representatives and at least 57-58 current (plus the two Senate seats still held by Obama and VP Joe Biden which the Democratic governors of both Illinois and Delaware will appoint Democrats to soon) Senate seats, which is a majority, it appears if it is brought up for a vote in 2009, which is very likely, the "Employee Free Choice Act" will pass by a majority in both houses.

The only thing Senate Democrats fear is if they don't end up with a 60 seat majority, the Republicans can filibuster the legislation, preventing it from passing. With a sure 59 seats (57 at present plus the Obama and Biden seats), but not 60 yet (there still are three close Senate races undecided though), the Democrats would have to get at least one Republican or one or two of the independents in the Senate to vote with them, which is a distinct possibility. One of those independents is former Democrat Joe Lieberman. He voted for the "Employee Free Choice Act" bill last year.

Meanwhile, we expect to see the UFCW announce a major campaign to unionize yet another U.S. supermarket chain either before this year is out or early in 2009.

The union has been trying for years to unionize Wal Mart, Whole Foods Market, Inc. and Trader Joe's. However the UFCW doesn't have strong, active campaigns targeting those three chains presently, like it does focusing on Tesco's Fresh & Easy Neighborhood Market and now Wakefern's PriceRight banner.

Additionally, there are a few other non-union chains in the UFCW's direct line of fire. Stay tuned to Fresh & Easy Buzz to find out which chain's those are.

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