Union, Grocers Need Reality Check

Mar 24, 2004
George Anderson

By George Anderson

A piece by Washington Post columnist Steven Pearlstein says reality has passed both parties by in the current negotiations taking place between the United Food and Commercial
Workers Union (UFCW) and the supermarket chains, Safeway and Giant Foods, in the Washington, DC area.

Mr. Pearlstein points out that the union is out of touch in believing its workers, like so many others in a variety of industries, shouldn’t have to bear a greater burden of
escalating health care costs either through payroll deductions, higher co-pays, etc.

He also says the chains are losing the battle for customers, not because of high labor costs, but because operators such as Safeway and Giant take a back seat to competitors
such as Wal-Mart, Whole Foods and Food Lion in areas including, not just pricing, but “quality, service and overall shopping experience.”

Mr. Pearlstein sees the challenge for supermarkets as figuring out “how to improve quality, service and the overall shopping experience in ways that justify higher prices, higher
wages and higher profits.”

“To my mind, such efforts would include pushing the technology envelope to further automate checkout and restocking. It probably means coming up with a greater variety of store
formats and giving individual managers greater flexibility in deciding what to sell, how to sell it and even what to charge. And it certainly involves more flexible pay systems
that provide big incentives for employees who find ways to build customer loyalty. While the companies have made some moves in those directions, the efforts so far have been marked
by timidity and a stunning lack of imagination.”

Moderator’s Comment: How would you redefine the relationship between management and organized labor to help supermarkets
regain their competitive edge?

We still believe that any discussion of wage or benefit concessions that doesn’t involve looking at non-union labor at the chains at the same time is a
mistake. There simply is no justification for the income some execs are taking in when they’re asking lower-paid workers to shoulder a greater, albeit small, financial burden.

Anderson – Moderator

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