Safeway May Sell Dominick’s

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Discussion
Nov 05, 2002

By George Anderson


Safeway has threatened to sell its Dominick’s Finer Foods supermarket chain rather than agree to a labor contract the company believes will put it at a competitive disadvantage in the Chicago-land market.


Dominick’s is facing a potential strike by 8,900 associates represented by the United Food and Commercial Workers (UFCW) union. The current labor agreement between the parties runs out on November 9.


Crain’s Chicago Business reports that Safeway is looking for concessions from the union to allow it to better compete with unionized and nonunion retailers. The chain claims that its hourly labor cost is $2 more than Albertson’s-owned Jewel and as much as $6 higher than competitors such as Meijer that operate stores without union labor.


The UFCW, for its part, claims that Safeway is simply looking to place the burden of the mistakes it has made since acquiring Dominick’s on its associates.


Moderator’s Comment: What is the real story when you
cut through the rhetoric surrounding the Safeway/UFCW labor negotiations?


The current labor negotiations appear to give Safeway
a ‘legitimate’ out for selling Dominick’s.


The company may be right that its labor contract puts
it at a disadvantage. That isn’t the reason that the grocery chain isn’t doing
well in Chicago, however. The responsibility for that resides squarely in Pleasanton,
California.
[George
Anderson – Moderator
]

 

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