abs is losing the groicery war 1 day at a time. wmt is beginning to squeeze the pants off them. That's just on the grocery side. On the drug side they are being counterattacked by walgreens, cvs, and a improving picture at riteaid. sell sell sell. The competition here is too heavy and abs is getting skinnier.
Grocery giant taking hard line in talks, union says
By Delroy Alexander
Tribune staff reporter
June 21, 2003
With the deadline for the sale of local grocery chain Dominick's looming, the labor unrest that led its parent company to propose an ownership change may spread to rival Jewel Food Stores.
Union officials based in Milwaukee say Jewel management is taking a harder line in pay talks that have been deadlocked for 14 months. The company is pressing the United Food & Commercial Workers union to agree to salary and health benefit cuts like those that Dominick's management tried unsuccessfully to implement in Chicago last year.
The first test at Jewel's 130-plus Chicago stores is expected to coincide with the proposed sale of Dominick's by the end of July, when workers from Jewel's deli counters begin fresh pay talks over a new long-term contract.
Dominick's parent Safeway Inc. put the beleaguered grocery chain up for sale late last year after the union threatened to strike over the company's attempts to slash wages, cut health benefits and bring in more flexible working hours.
Instead of pushing through its changes, Safeway was forced to look for a buyer, agreeing instead to maintain status quo contract terms for eight months--a deadline that ends July 28.
"These talks are definitely not the same as in the past," said Daniel Welch, president of Milwaukee-based UFCW Local 1444, which represents around 1,600 Jewel workers who have been trying to agree on a new contract.
"I'm sure Jewel will likely try to impose similar conditions when contracts become due" in Chicago, he said.
Welch and other union leaders believe Jewel's tough pay talks are part of a company-wide strategy to cut pay and benefits for new employees.
"What we are seeing is coming from Jewel's parent company, Albertson's Inc.," said Welch. "It's clear to me that local management is only acting on orders."
Jewel executives did not return several calls.
Welch will meet with Jewel management and an independent arbitrator Monday in an attempt to reach common ground, but he said the two sides are poles apart.
Just as Dominick's tried, Jewel wants to start a two-tier wage system, with new employees coming on board at lesser rates than existing workers. The company also wants to cut health benefits and freeze pay retroactively to avoid shelling out large sums when and if a deal is reached, according to Welch.
"That would mean members going without a wage increase for two years," said the union leader. "That's unacceptable. We need an immediate wage increase and we want it back dated."
Jewel has also offered bonus payments in lieu of annual percentage increases of between $100 and $500, depending on seniority. A bonus would be paid immediately if a deal is ratified by union members.
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You know, upper management should lead by example and take a pay cut as well as a cut in benefits.
They can afford it the most, and deserve the least yet they will have the associates making 20 - 30 thousand a year take cuts.
Cmon Larry, get all VPs and Directors a 15% pay cut. If you are trying to cut labor costs start at the top. They will still all be making over 120,000 a year!
Lets see 150+ VPs, 300+ directors, at an average annual pay of 150,000 a year. A 15% pay cut for all your high priced employees would save the company over $10,000,000 a year. This does not even count Larry's millions.
Chicago UFCW leaders, who represent about 9,000 Dominick's workers and a similar number of workers at market leader Jewel, said they are watching talks closely.
One union leader involved in coming negotiations with Jewel, who asked not to be named, said "we didn't put up with it at Dominick's and we will not at Jewel if management tries it there."
He said labor relations generally in the food retail business had deteriorated due to the sluggish economy and growing competition.
Companies such as Pleasanton, Calif-based Safeway and Jewel parent Albertson's, based in Boise, Idaho, have been facing an increasingly tough challenge from low-cost dollar stores and general retailers such as Wal-Mart Stores Inc., which has used its Supercenter concept to rapidly gain market share in food.
Chains such as Target Corp. and Meijer have increased local presence, but Wal-Mart, with its huge buying power and low cost of operations, is the king of the big-box format, with more than 1,000 Supercenters nationwide.
Grocery sales at Wal-Mart, including its discount and club stores, are increasing at the fastest rate in the industry and are expected to top $45 billion this year.
Earlier this month, Safeway said it was cutting 940 administrative jobs--or 13 percent of its back office staff--to offset a persistent sales slump triggered by more frugal shoppers and tougher competition.
"Because of a prolonged economic downturn and a difficult operating environment, we need to lower our cost of doing business," said Steve Burd, chief executive of the nation's third-largest grocer.
Burd, who has come under fire over the past year for acquisitions such as Dominick's that have failed to work out, has been among the most outspoken industry leaders on the need to restructure wages and benefits if supermarket chains are to fend off the growing competitive threats.
Meanwhile, the sale of Dominick's is proceeding.
"We're still in a process and when we have something to announce, we'll announce it," said Safeway spokesman Brian Dowling.
The leading candidates include Los Angeles-based Yucaipa Cos., the private equity vehicle of Ronald Burkle, a billionaire backer of former President Bill Clinton, and former owner of Dominick's, and Wisconsin-based Roundy's Inc., run by former Dominick's boss Bob Mariano.
The bidders declined to comment on the talks publicly, citing confidentiality agreements.
Copyright � 2003, Chicago Tribune
You are correct and it is sad as ABS was once a great company but just unable to cope without inflation to cover up management weakness! Survival is becomming the real question today.