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But now a different type of company is moving into their vacated spaces: grocery stores.
“Food retail is one thing helping struggling malls survive,” June Williamson, an architecture professor at the City College of New York who cowrote “Retrofitting Suburbia,” told Business Insider.
Kroger, the largest US grocer, with nearly 4,000 locations, recently purchased a former Macy’s at Kingsdale Shopping Center in Upper Arlington, Ohio, for $10.5 million, not long after the department store announced it would close the 45-year-old location. 365 by Whole Foods (a smaller, more economical version of the well-known chain) will open at College Mall in Bloomington, Indiana, in late 2017, according to Indiana Public Media.
And Wegmans Food Markets is moving into a former J.C. Penney at the Natick Mall in Massachusetts. The shop is set to open in 2018. The grocer decided to move into the mall because the vacant department store has a lot of space and ample parking, Wegmans spokeswoman Valerie Fox told Business Insider. The mall’s location, near numerous housing developments, is also convenient for shoppers.
Wegmans already operates a location in Montgomery Mall in Pennsylvania, and another at Hunt Valley mall in Baltimore County, Maryland (which was redeveloped into an outdoor shopping center in 2000). “Because our business model is predicated on high volume, we need a lot of customers to shop in our stores,” Fox said of the decision to move into Natick Mall. “While we don’t specifically seek out shopping malls, we consider them if they meet the things we’re looking for … Natick Mall met all our criteria for a store site.”
Natick Mall started expanding in late 2006, adding nearly 100 stores as well as a connected condo complex over the next the two years. But the 2008 financial crisis affected the mall’s sales, The Boston Globe reported at the time. The center, renamed Natick Collection, was envisioned as a luxury destination for suburban shoppers, but upscale stores like Neiman Marcus and Gucci had trouble catching on. The mall’s J.C. Penney closed in August 2015 because of declining sales.
Losing an anchor store can make it difficult for a mall to survive, since department stores often pay a large part of the lease, Williamson said. But mall department stores have an opportunity to fulfill other community needs besides traditional clothing retail. Suburban malls are convenient for grocery shoppers because they often are already close to housing or accessible by public transportation. In the digital age, supermarkets or other food-related businesses, like indoor farms and farmers markets, could prove to be more financially viable for shopping centers than traditional anchors.
“Part of it is a survival tactic,” Calvin Schnure, an economist with the National Association of Real Estate Investment Trusts, told The Washington Post. “E-commerce is changing people’s spending patterns. But in the process, they are changing the shopping experience in a mall.”
Beyond indoor supermarkets, Williamson predicts, some shopping malls could also be good homes for other types of food preparation and retail. This can be seen in the recent growth of suburban farmers markets, often held weekly in mall parking lots from Everett Mall in Washington to Greece Ridge Mall in Rochester, New York.
Retrofitting malls for food production, in addition to retail, would create more jobs that are resistant to outsourcing, she added.
“Construction is one of those not-so-easy-to-outsource fields,” Williamson said. “That’s partly why new house starts, which bring labor and have to happen on the ground, are so important to our economy. Another area is food. By moving into malls, agricultural operations could be more integrated into already built communities. And a lot of these suburban areas were agricultural landscapes not that long ago, before they were developed. There could be a premium for things grown locally.”
There are no American malls, to Williamson’s knowledge, that grow fresh food themselves. (Food courts usually heat up frozen items that are shipped to them.) But some malls abroad are experimenting with food production. The Shanghai K11 mall, for example, has an indoor farm that grows vegetables, raises pigs, and sells its own produce. In late 2016, a rooftop farm was also built on top of Israel’s oldest shopping mall, in Tel Aviv.
“There are too many malls” in the US, Williamson said. “Conventional department stores are under threat, partly from online shopping and people wanting to go to the specialty boutique rather than the Macy’s. People still want to go out, and food is a real draw for the social part of consumption. So you may buy your socks online, but you might want to go out with your friends to eat or grocery shop at the mall.”
Source: Business Insider
Imagine going to the grocery store for dinner, not to pick up a rotisserie chicken to take home, but to actually eat at the store. As online grocery shopping grows, many supermarkets are adding sit-down restaurants in a move to attract more millennials. And it seems to be working.
Kyle Riggs, who manages Market Grille, the restaurant at a Hy-Vee grocery store in Columbia, Mo., says most people don’t expect to find this level of food service next to the produce aisle.
“And then when they walk in here, they’re just amazed at the full wine wall with the ladder that slides,” he says. “We have 20 beers on tap and a lot of high-end alcohol, whiskeys and things like that, and great food.”
The ingredients come from the store. They are cooked in the store’s kitchen and served here. Riggs says football games can pack the 148-seat restaurant with college students and young professionals.
Indeed, Rob Hunt, 30, and Aaron Hadlow, 28, have been stopping by all summer for happy hour after work. Hunt says the variety of food, the local, craft beer on tap and ultimately the price are a big draw.
“You can’t get $2 pints of beer anywhere else and that’s honestly the biggest thing,” he says. “We tried a couple of other places this summer and they were fun, but it’s just cheaper over here.”
Across the country, supermarkets like Whole Foods have been offering sit-down dining and drink deals for years. The trend of adding full restaurants, sometimes called “groceraunts,” falls in line with the uptick in prepared store meals, which has grown 30 percent since 2008 and driven $10 billion in sales last year, according to the NPD group.
Hy-Vee, which was one of the early adopters of the groceraunt model, has added 115 Market Grilles to date.
While grocery stores had been losing customers in recent years to smaller markets and online food shopping, groceraunts have helped bring back foot traffic to the old-school grocers.
“It’s really made a big difference for us in the evening,” says Jeremy Gosch, executive vice president strategy and chief merchandising officer, at Hy-Vee, Inc. “That’s where most traditional grocery store food service had oppurtunity.”
Gosch says creating an in-house restaurant, different ambiance and different lighting were important to draw in diners. “I think we’re capturing business that we didn’t have before in our food service department,” he says.
While people are looking for more options in prepared foods, the traditional center of the store, with cans of beans and boxes of cereal, has had to make room. That means space on the shelf is becoming more competitive.
“As … we continue to roll out into existing stores some food service updates and expansion, especially on meals to go for consumption at home, I think you’ll see a little bit of that compression,” Gosch says. That could mean a future with only one size and brand of canned tomatoes on the shelf.
A large part of this shift is thanks to millennials, like Hunt and Hadlow, who are more likely to dine out than older generations. More than half of millennials surveyed by financial services firm Morgan Stanley said they had eaten out in the past week, compared to 43 percent of previous generations.
Today, groceraunts are featuring seasonal menus and hiring graduates of the Culinary Institute of America as chefs. Food industry analyst Phil Lempert says this appeals to millennials, too.
“What these groceraunts can do is give them a convenient location where they can meet their friends, where they can have great food, and have it at a great value,” he says. “That becomes a terrific formula to attract this generation.”
Millennials are also turning away from slumping restaurant chains, like Chili’s or Applebee’s, which plans to close up to 60 locations this year.
That’s forcing some restaurant chains to look toward grocery stores as potential partners. Think of Starbucks and Caribou coffee kiosks in grocery stores, except in this case, Wolfgang Puck wants his cafe to become the in-house restaurant, says Lempert.
“Now these restaurateurs want their space in the supermarket as well, because they know that it’s more convenient for people, it’s more of a one-stop-shop, and it’s hurting their traditional restaurants,” he says.
The next step for grocery stores may be to add home meal-delivery options, Lempert says, as digital orders ramp up with tech-savvy, young adults. Market analysts are looking at the Amazon-Whole Foods merger and expect both more restaurants to be added to grocery stores, and more people to order their groceries and dinner together online.
“This is a trend that’s going to continue to grow,” Lemeprt says. “Grocers are putting more money and more effort in this. They see it as their culinary mark, if you would, on society. So this is here to stay.”
Nick Martinez arrived two hours too late. He had hoped to buy diapers for his 2-year-old son on the way home after his work shift ended at 2 a.m.
But he didn’t know the Smith’s grocery store at Sahara Avenue and Durango Drive had shortened its hours to close at midnight.
In the 25 years he’s lived in the valley, shopping at such late hours gets harder and harder in a so-called “24-hour” town, Martinez said. He ended up getting diapers about five miles away at a 24-hour Walmart.
“I was surprised,” Martinez said of the Smith’s incident. “I always counted on them.”
This year, at least 11 grocers have stopped 24-hour service. The valley may continue to see cuts.
Without the sales volume to justify 24 hours, Smith’s has decided over the past six to eight weeks to shorten hours at four former 24-hour stores, spokeswoman Aubriana Martindale said.
Three of those stores now close at midnight. They are located at:
— 7130 N. Durango Drive
— 6855 Aliante Parkway North
— 2211 N. Rampart Blvd.
The store at 9851 W. Charleston Blvd. closes at 1 a.m.
Smith’s operates 35 stores in Clark County. According to the company’s website, 15 stores in the valley remain open 24 hours.
In January, Albertsons, which also owns Vons, changed some store hours. Three former 24-hour Albertsons and five Vons now close at midnight and reopen at 5 a.m., spokeswoman Nancy Keane said.
About 20 Albertsons and Vons are in the valley. Five Vons and three Albertsons remain open 24 hours, according to the company’s website.
Changes in customers, Vegas
Smith’s in particular may be saving money for the two new supermarkets announced to open in the valley, said Dan Hubbard, senior retail services director with real estate firm Cushman & Wakefield.
One could assume the store changed hours at the locations that performed worst after midnight, he said. The ones still open have the sales to justify those hours.
Poor sales may not be the only factor. Thieves like to strike grocery stores after midnight for products they can easily resell, said Derek Belanus, a commercial real estate adviser with real estate firm Northcap Commercial.
The changing hours could also speak to greater trends, said Hayim Mizrachi, president of real estate firm MDL Group.
More people are interested in buying groceries online, he said. Earlier this year, five Walmarts announced an online ordering service, and grocery delivery service Instacart started work in the valley.
The hours shift may also speak to Las Vegas growth, Mizrachi said.
The area is beyond a 24-hour gaming town, including more industries and more people who work traditional hours. As a result, locals have become more accepting of changes that in the past would cause chaos.
“It’s kind of like how the casinos are able to charge for parking without riots in the streets,” Mizrachi said. “It’s because we’ve matured from a town to a city. Not one local is happy about casinos charging for parking. But we accepted it and either Uber to the Strip when we go or pay.”
As for Nick Martinez, he said he’s gotten used to the shifts he works as an events coordinator for a local clothing and nightlife company, a job he’s held for about six months.
By starting at 6 p.m. and ending at 2 a.m., he misses out on daytime fun and errands. He can’t go hiking at night or visit bricks-and-mortar banks. He shops at grocery stores multiple times a week for meals and for quick eats and usually sees about 15 other people in the store, he said.
His free time after work is spent with other friends in local nightlife. But given their livelihoods, meeting at a bar feels like hanging out in someone else’s office.
“You can’t do anything at night out here,” he said, “except drink.”
Source: Las Vegas Review-Journal
Only a handful of Whole Foods Market stores are open in Canada. My records indicate there are 13 stores. Meanwhile the current grocery landscape in Canada is shared between Loblaw Companies with over 1000 supermarkets nationwide. After Sobeys (a subsidiary of Empire Company Limited), Metro Inc is the third largest grocer in Canada, with nearly 400 stores. Each of these grocers operate under different franchise names, making it hard to keep track of who is who. But it is also hard to see how the acquisition of WFM by Amazon.com could put a big dent into the Canadian grocery market. This article focuses on LBLCF and MTRAF as two of the three biggest grocery chains in Canada. Both of performed well in recent years. Both have also dropped around 10% in the last 3 months, inviting entry points for investors that want to pick up some consumer discretionary stocks.
Current comparison of Loblaw and Metro grocer chains
Current valuation for these two companies is provided in the following table. LBLCF has almost 3 times the market cap, which is consistent with the number of stores it has over MTRAF. That is where the differences stop. There are more similarities than differences, it seems. The dividend yields are virtually the same and the dividend payouts are low, below 40%. Enterprise value over Earnings Before Interest, Taxes, Depreciation and Amortization (EV/EBITDA) are both low at 10 and 11. Price to book is between 2 and 4, while debt to equity levels are also modest. These valuations look good. It is hard to say which of these two edges ahead. The last column has “Favors Loblaw” based on the direct comparison. For this LBLCF gets the nod with a score of 4 out of 6 in this head to head comparison.
Source: Seeking Alpha
Wal-Mart’s story as a retailer is “fresher than it’s been in years,” according to Oppenheimer & Co. analyst Rupesh Parikh.
And much of the latest momentum around the big-box retailer stems from Wal-Mart’s position to take an even larger share of the grocery market, Parikh wrote in a Wednesday note to clients.
Already, groceries comprise more than 55 percent of Wal-Mart’s U.S. sales. And by adding e-retailer Jet.com to its portfolio in 2016, Wal-Mart has set itself up to go “toe-to-toe” with any competition — both offline and online — today, Parikh said.
“In our view, in acquiring eCommerce operators, WMT is much more focused upon purchasing key, unique capabilities and technologies, rather than upon simply adding sales.”
Oppenheimer has initiated an outperform rating on the stock, with a $90 price target. Wal-Mart’s shares closed Tuesday at $80.50, up about 6.4 percent from a month ago.
It’s no surprise the grocery wars have been heating up in the U.S., with internet giant Amazon announcing plans to acquire Whole Foods, German grocer Lidl entering the market, rival Target quietly making changes to its supermarket strategies and other companies, like Kroger, trying to do more with its private-label brands.
Being the behemoths of companies that they are, though, Wal-Mart and Amazon stand out above the rest. Oppenheimer said the worries over private-player Lidl’s expansion and encroachment are especially “overblown.”
“It feels as if the battles have only started between WMT and AMZN,” Parikh said. Looking ahead to the Amazon-Whole Foods deal, “we still do not know AMZN’s intentions, and it is still unclear how the company plans to sell conventional products in a brick & mortar setting. … This remains a big unknown and an area of intense focus for us.”
That being said, Wal-Mart has made great strides in the grocery department of late and continues to evolve, as evidenced by a shake-up of its food leadership team. Reuters reported the news recently, citing an internal memo. Wal-Mart didn’t immediately respond to CNBC’s request for comment.
Some of Wal-Mart’s key changes include one for Shawn Baldwin, senior vice president and general merchandise manager for produce and global food sourcing, who will focus on a new initiative for Hispanic customers. Wal-Mart will also split leadership in its bakery and deli departments, the memo said.
Meantime, Wal-Mart’s main initiatives in grocery — as pointed out by Oppenheimer — include improving its “fresh” offerings, making online grocery pick-up services more accessible, growing SKUs on Jet.com, increasing focus on private-label brands — especially at Sam’s Club and continuing to invest in keeping prices low.
After completing comprehensive store checks, it also appears Wal-Mart is trying to improve customer service and the overall experience for shoppers picking up groceries at its stores, Parikh said.
Notably, Wal-Mart’s expansive U.S. brick-and-mortar footprint also sets the company up to benefit from the many other retailers — such as Sports Authority, Gymboree, Sears and RadioShack — announcing store closures this year. According to Oppenheimer, there is now more than $18 billion in sales up for grabs, with shoppers being forced to ring up purchases elsewhere.
Wal-Mart shares have climbed 10 percent over the past 12 months, and the stock is up more than 16 percent since the start of the year. These gains far outpace the S&P 500 Retail ETF’s loss of about 6 percent for the year-to-date period.
Notably, Wal-Mart is set to report second-quarter earnings before the bell on Thursday, Aug. 17. Oppenheimer & Co. has said it expects Wal-Mart to “at least match Street forecasts.”
“Key metrics such as traffic and comp sales have picked up lately. We look toward FY18 as the first year of more meaningful positive [earnings] growth for WMT since .”
Americans are less enamored today of the one-stop-shop supermarkets that dominated the grocery industry a generation ago, a trend that analysts say provides an opening for Amazon and other digital disruptors to fundamentally remake the way people shop in the future.
Although Amazon became an e-commerce giant in part on the promise of offering everything from books to breakfast cereal under one virtual roof, the flip side of these technological innovations is a consumer preference that actually harkens back not just to a pre-ecommerce, but a pre-supermarket era.
“We’re kind of returning to the way shopping used to be in the 50s — those individual specialty players are starting to be more in vogue,” Matt Sargent, senior vice president at consumer market research firm Magid, told NBC News. “More retailers are being shopped, on average, and are being shopped more frequently.”
Half of today’s shoppers patronize three or more grocery stores, including roughly one in six who shop at five different stores, according to Magid research.
This is due, in part, to the proliferation of options available to consumers as the grocery category gets more crowded. According to market research firm IBISWorld, supermarket and grocery revenue grew by 1 percent over the past five years. A strengthening economy and shoppers with more disposable income have helped traditional supermarkets as well as their rivals, which range from warehouse clubs and fast-growing “limited assortment” stores like Trader Joe’s to emerging competitors like convenience stores and Amazon.
Perhaps counterintuitively, shoppers today see the use of multiple storefronts, both brick-and-mortar and virtual, as faster and easier than pushing a laden cart through nearly 50,000 square feet of merchandise.
“Consumers have to spend a lot of time at these stores with each trip,” Darren Seifer, food and beverage analyst at The NPD Group, said of traditional supermarkets. “They’re using a range of ways to minimize their time in-store,” he said, including technologies that let people buy online for home delivery or click and pick up, and innovations like smaller-format stores and meal kits such as Blue Apron.
Millennials Have a Love Affair with Food
“We as consumers changed,” said Phil Lempert, founder and editor of SupermarketGuru.com. “We decided that what we wanted was more than piling groceries high and selling them cheap. We wanted more of a relationship with our food. Now we’re passionate about food, and the retail environment has to change to accommodate that.”
This trend of visiting more stores, along with a correlating one of more frequent visits, is driven by younger shoppers, Magid found. More than one in five Americans grocery shop more than once a week, including nearly a quarter of 35 to 54-year-olds.
“It’s significantly millennial-driven because millennials right now are in their peak grocery-shopping phase,” said Jason Dorsey, president and founder of the Center for Generational Kinetics. “They realized they don’t have to settle when it comes to groceries and food.”
For a generation that never knew a world without thousands of mobile apps at their fingertips or dozens of different ways to customize a morning cup of coffee, that means literal and figurative cherry-picking.
Along with changing demographics, where Americans choose to live today is shifting how and how often they shop for groceries. “Consumers living in urban populations tend to purchase groceries more frequently from industry establishments instead of wholesale clubs and supercenters,” IBISWorld said in a January report.
“What’s different about it is there were probably people living in these urban areas, but they weren’t of the same affluence — that affluence is driving money back into the core,” Sargent said.
Growing interest in health and nutrition, driven both by millennials with young families and aging baby boomers, also plays a role. IBISWorld noted the “growing demand for all-natural and organic products” over the last five years.
Men Don’t Like to Linger
And grocery-shopping today is more of an equal-opportunity chore, Seifer pointed out, with men’s shopping habits driving some of the changes. “Men spend less time in stores. They’re more likely to use online services and they actually spend less money per trip,” he said. Making food shopping as painless as possible can deliver a competitive advantage.
This is where Amazon, which announced plans to purchase Whole Foods Market for nearly $14 billion last month, has a sizable, although not foolproof edge, analysts say.
“We should probably expect there to be some technological changes down the road when it comes to grocery shopping,” Seifer said. “Amazon has already been working on technology” to make shopping less of a hassle, he said, such as Amazon Fresh delivery and a storefront prototype that eliminates cashiers.
“Online grocery shopping is going to become normalized with millennials,” Dorsey predicted, but retailers will have to find a way to get people comfortable with the idea of ordering perishables sight unseen.
“In the grocery store, you can easily spot a rotten apple or examine meat product color. In the online model, someone or something else is being trusted to make your selection,” Ananda Chakravarty, a senior analyst at Forrester Research, told NBC News.
“Amazon’s logistics network with short-term delivery provides possible opportunity but this would need outfitting with refrigeration and special packaging to accommodate food handling,” he said.
Although its robust analytics capabilities combined with Whole Foods’ retail footprint will give it an operational edge, one challenge is that Amazon is running up against today’s customer expectation of being able to buy anything, at any time — a trend it had a significant role in creating.
“People who shop Amazon in general — outside of grocery — shop multiple stores,” Seifer said. “You’ve got the Amazon shoppers who want choice.”
Source: NBC News
One reason that Wal-Mart workers have always had difficulty improving their lot is that they’ve never been able to form a union. At its core, Wal-Mart’s rationale for being against organized labor was not unlike that of Kodak, say, or General Electric under Lem Boulware: management had an open door policy, by which any worker could ostensibly walk in and discuss anything. Therefore, as Wal-Mart laid out in its “Manager’s Toolbox to Remaining Union Free,” “we do not believe there is a need for third-party representation. It is our position every associate can speak for him/herself without having to pay his/her hard-earned money to a union in order to be listened to and have issues resolved.”
Yet unlike Kodak, which tried to frustrate union organizers by keeping its workers happy with good wages and princely benefits, Wal-Mart has been reliably ungenerous. And unlike GE, which fought tooth and nail against the International Union of Electrical Workers but ultimately honored its right to exist, Wal-Mart has never allowed so much as a single one of its stores to be organized. Indeed, ever since Mr. Sam’s time, the company has done everything it can to crush the unions, painting them in the most Manichean terms. They are “nothing but blood-sucking parasites living off the productive labor of people who work for a living!” said attorney John Tate, an iron-willed right-winger whom Walton had hired to help beat back the Retail Clerks in the early 1970s and who then stuck around at Wal-Mart where he developed an array of antiunion techniques.
In the early 1980s, when the Teamsters attempted to represent employees at two Wal-Mart distribution centers in Arkansas, Walton himself showed up with a warning—US labor law be damned. Recalled one worker: “He told us that if the union got in, the warehouse would be closed. … He said people could vote any way they wanted, but he’d close her right up.” The Teamsters lost the election.
But it wasn’t just top executives who were expected to resist being organized. “Staying union free is a full-time commitment,” read a manual given out at a Wal-Mart distribution center in Indiana in 1991, the year before Walton died. “Unless union prevention is a goal equal to other objectives within an organization, the goal will usually not be attained. The commitment to stay union free must exist at all levels of management—from the chairperson of the ‘board’ down to the front-line manager. Therefore, no one in management is immune from carrying his or her ‘own weight’ in the union prevention effort. The entire management staff should fully comprehend and appreciate exactly what is expected of their individual efforts to meet the union free objective. The union organizer is a ‘potential opponent’ for our center.”
The main thing that a Wal-Mart manager was supposed to do when he or she caught even a hint of union activity was to contact corporate headquarters via a special hotline. Immediately, a “labor team” would be sent from Bentonville to the store where union organizers might be gaining even the slightest toehold. This squad from HQ would then take over the running of the place, putting workers on a steady diet of antiunion propaganda videos; weighing whether local managers were too timid or sympathetic to labor and should be ousted; and keeping a close eye on any employees agitating for a union or simply disposed to having one. “As soon as they determine you’re prounion, they go after you,” said Jon Lehman, who was a Wal-Mart manager in Kentucky for seventeen years. “It’s almost like a neurosurgeon going after a brain tumor: we got to get that thing out before it infects the rest of the store, the rest of the body.”
Much of this strategy evoked the way that GM and other companies deployed Pinkertons to bully the unions way back in the 1930s. “I had so many bosses around me, I couldn’t believe it,” said Larry Adams, who worked in the tire and lube express department at a Wal-Mart in Kingman, Arizona, which grabbed the labor team’s attention in the summer of 2000. With temperatures soaring well above a hundred degrees, Adams and some of his fellow automotive technicians got angry when their boss wouldn’t spend the $200 needed to fix a broken air conditioner. So they reached out to the United Food and Commercial Workers union. Within forty-eight hours, twenty outside managers were crawling all over the store. “It was very intimidating,” said Adams. The UFCW’s organizing push in Kingman would end in defeat; within a year or so, nearly every one of the union supporters would be fired or compelled to quit.
At a Wal-Mart Supercenter in Jacksonville, Texas, a group of meat-cutters had better luck at organizing—though not for long. A week or two after they voted to join the UFCW in February 2000, the company announced that it would cease cutting meat and switch instead to selling prepackaged beef and pork at all of its stores. Wal-Mart said that the butchers’ seven-to-three vote in favor of the UFCW had nothing whatsoever to do with its decision to stock “case-ready” meat. Yet it was all but impossible to miss that the move essentially eviscerated the union’s first ever victory at the company, as Wal-Mart successfully argued that the changes to the meat department made it so that collective bargaining wasn’t appropriate going forward. The UFCW challenged the company’s stance before the National Labor Relations Board, but after eight years of rulings by the agency and the courts, the union could claim only a partial win; Wal-Mart would escape being unionized.
The dust-up in Texas was far from unusual. In all, unions filed 288 unfair-labor-practice charges against Wal-Mart between 1998 and 2003. Most alleged that the company had engaged in improper firings, threatened employees if they tried to organize, carried out surveillance, or illegally interrogated workers to determine their views on labor-related matters. Of these charges, the NLRB found ninety-four of them to be substantive enough to issue a formal complaint against the company. Still, none of it was enough to shake Wal-Mart’s conviction that organized labor needed to be stopped at all costs. “I’ve never seen a company that will go to the lengths that Wal-Mart goes to, to avoid a union,” said consultant Martin Levitt, who helped the company hone its attack before writing a book titled Confessions of a Union Buster. “They have zero tolerance.”
But if Wal-Mart was particularly strong-minded in its opposition to organized labor, most other companies weren’t too far behind. For example, at a Coca-Cola bottling plant in Yuma, Arizona, a manager told employees in 2002 that they’d lose their 401(k)s if they voted to be represented by the United Industrial, Service, Transportation, Professional, and Government Workers of North America. The union lost the election by a vote of eleven to ten. At a General Electric subsidiary in Muskegon, Michigan, which hadn’t been organized, a machine operator named Michael Crane began to hand out literature promoting the Electrical Workers and wear a union T-shirt on the job, only to find his manager repeatedly asking him, “Don’t you have a better shirt to wear?” If this was overly subtle, the company’s subsequent action wasn’t: it fired Crane on a bogus accusation of substandard workmanship.
It wasn’t always like this. In the 1960s, when some 30 percent of the private-sector workforce in America was still unionized, employers were generally cautious about how far they’d go in trying to repel organized labor. “They were as nervous as whores in church,” said one corporate adviser. “The posture of major company managers was, ‘Let’s not make the union mad at us during the organizing drive or they’ll take it out at the bargaining table.’” By the 1980s, a whole industry had sprung up to assist business: “union avoidance” consultants, lawyers, psychologists, and strike-management firms. The more enfeebled the unions became, the more forcefully employers then acted. By the 1990s, even companies that had once accepted unions as a fact of life were now totally defiant.
“The most intense and aggressive antiunion campaign strategies, the kind previously found only at employers like Wal-Mart, are no longer reserved for a select coterie of extreme antiunion employers,” Cornell University’s Kate Bronfenbrenner wrote in an analysis of how business conducted itself during representation elections from 1999 through 2003. Specifically, she discovered that companies threatened to close the facilities where employees were trying to organize in 57 percent of elections, raised the possibility of cuts to wages and benefits in nearly half, and went so far as to actually discharge workers a third of the time. Over the years, employers also became adept at delaying union elections so that they had more time to coerce workers to see things their way.
All of this proved highly effective. Even if the NLRB ruled that a company had illegally dissuaded employees from organizing, the price to pay was typically small—about $200,000 in penalties—compared with the many millions of dollars that could be saved by ensuring that union negotiators never got a shot to bolster workers’ earnings, retirement plans, and health-care benefits.
Grocery workers in the Washington, D.C., area have reversed concessionary bargaining in the industry for the first time in a generation. Last November 17,000 workers at Giant Food and Safeway stores ratified a contract that:
- substantially increased starting pay
- cut in half the time it takes for part-timers to reach top pay
- protected health benefits with no cost increases
- strengthened pension funding
Members of Food and Commercial Workers (UFCW) Local 400 won these gains with an escalating contract campaign, ultimately demonstrating that they were willing to strike during the all-important Thanksgiving week.
Decades of Backsliding
In 1983, newly hired grocery workers in D.C. earned $6.95 an hour—more than twice the federal minimum wage at the time, and worth nearly $17 in today’s dollars. It took just two years to reach top pay of $10.44 an hour, worth $25.45 today.
“Back then you had to know someone to get hired at Safeway,” said Jibril Wallace, a Safeway file maintenance clerk in D.C. “My sister was my ticket to getting a job.”
But beginning in 1996, Local 400 agreed to create new tiers featuring lower pay and benefits in four of its next five contracts. By 2013, starting wages had plummeted to $7.60 an hour—a mere 35 cents above the federal minimum wage, and only 65 cents more than starting pay 30 years earlier.
By then the union had also given up its pay progression based on months of service. Instead workers progressed up the scale based on hours worked. Most part-time workers would not see the top rate of $14.50 for 10 years or longer.
This decline was hardly unique to Local 400. UFCW has done a poor job organizing regional nonunion competitors such as Food Lion and Harris Teeter and national ones such as Walmart and Whole Foods. We also failed to line up contracts across locals as our employers grew from regional chains to national and multinational corporations. And members weren’t active participants in contract fights.
The result has been a hollowing out of the union. Fewer and fewer members regarded grocery jobs as careers. By last year, fewer than 600 of the 17,000 members at Giant and Safeway were on the top tier. Almost 40 percent had been hired since the last contract negotiations.
Minimum Wage Groundwork
But the union has begun to change direction since a new president took the helm in 2012.
To gain back the wages and benefits our predecessors bargained away, we will need to restore union density in the grocery industry. In the meantime, after stopping the bleeding with the 2013 contract, Local 400 leaders began to identify ways to blunt the impact of declining density before our next contract campaign.
One obvious way was to use our political power. The Giant-Safeway master agreement covers workers in higher-wage, closed-shop Maryland and D.C. as well as low-wage, right-to-work Virginia. A Republican legislative majority and state preemption law prevented us from raising the minimum wage in Virginia, so we decided to focus on D.C. and the Maryland counties that border it: Montgomery and Prince George’s.
Between 2014 and 2016, we partnered with union, community, and faith allies to win minimum wage increases in all three jurisdictions, along with paid sick days in D.C. and Montgomery County. Now a Safeway worker making $7.60 an hour in Alexandria, Virginia, could hop on a Metro train, ride one stop, and make $11.50 an hour at a store in D.C.
We believed this huge disparity created hiring and retention problems for Safeway and Giant. Our plan going into negotiations was to use those problems as leverage to lift wages higher in Virginia, too.
Members Kick it Off
Our contract mobilization kicked off in summer 2016 with conferences that brought together nearly 300 Safeway and Giant stewards. They were tasked with turning out members for 12 big meetings held around the region, since traffic here is notorious.
More than 1,500 members attended the area meetings—the largest turnout of Giant and Safeway workers our local had ever recorded, outside of a contract ratification vote. They signed up for text-message alerts and took flyers to sign up their co-workers. These text alerts proved highly effective at cutting down on rumors and getting contract updates out.
“The mobilization meetings, as we called them, were really instrumental in setting the tone for the entire campaign,” said Beverly McFarland, a floral manager at Giant in Silver Spring, Maryland. “We reviewed Safeway and Giant’s financials and discussed bargaining demands. We left the meeting feeling united and ready for the fight.”
Union reps recruited 12 Giant and Safeway members to serve on the bargaining committee and 24 more for the contract action team (CAT). These members were released from work and paid by the union one day per week, but were also expected to volunteer additional time.
To communicate across this geographically dispersed team, we created a private Facebook group for members of the CAT and bargaining committee. The page quickly filled up with solidarity selfies and pictures of actions from stores around the region. With permission we shared the best photos on our public Local 400 page.
Enforcing What We Had
We launched the campaign with action to enforce our contract. One commonly violated provision required management to post the following week’s schedule every Friday by noon.
On a single day, CAT members, reps, and stewards executed simultaneous schedule checks in nearly half the Safeway and Giant stores in the region. More than half reported violations.
The online reporting form we set up for this (ufcw400.org/1pm) was so popular that we expanded it to allow members to report a variety of schedule violations. In fact, we still regularly receive submissions from grocery workers represented by other locals who stumble across it online.
The enforcement campaign gave members a huge morale boost. Many happily reported that their managers were now scrambling to make sure schedules were posted—and even informing stewards that they had the schedule up early!
Next came a series of actions to build solidarity. Workers joined group huddles to hear the latest contract updates, then marched on their bosses to deliver a petition supporting our contract demands. Members at different stores vied to see who could hold the largest in-store meeting.
And since many Local 400 members have longstanding relationships with their customers, they asked customers to sign cards supporting their fight. More than 5,000 signed.
Our efforts were aided by corporate disunity. For the first time anyone can remember, Giant and Safeway did not bargain together. We were able to play both sides off each other, while members stayed united across employers. Each CAT member’s turf included both companies.
The master contract expired on October 29. We agreed to extend it briefly, but not beyond Thanksgiving. This was something we had heard loud and clear during mobilization meetings. Members know how important Thanksgiving is to their employers, and correctly believed that the threat of disruption leading into the holiday would create a powerful incentive to settle.
During the extension we maintained our picketing but added a wrinkle: we took the picket line inside. A long line of workers and community allies snaked around the stores, chanting. Members who were working at the time loved it. Some even thought we were on strike and began shutting down their departments to join the “walkout.”
We also scheduled a vote on November 16, a week before Thanksgiving. Our message was simple: we would be voting on either a contract or a strike. We started circulating a public strike petition that surpassed 1,000 signatures on its first day.
On November 13, Safeway became the first company to settle. The next day bargaining committee member John Ruiz, a Safeway night crew captain, went to his store and took pictures of members holding handwritten signs expressing solidarity with Giant members, which we then shared on Facebook. Inspired by Ruiz, stewards from other Safeway stores began posting their own solidarity messages, lifting morale for the final push at Giant.
On November 15 we marched in and out of a shiny new Giant store in a rapidly gentrifying D.C. neighborhood. Our chants were echoing off the walls of the surrounding luxury condos, reporters were on their way, and rush-hour traffic was starting to snarl when Giant capitulated.
Members’ hard work paid off in a contract that replaced raises based on hours worked with raises every six months. Virginia members saw the largest gains: starting pay for a Safeway food clerk moved from $7.60 to $9.25 an hour, and $10 after completing a 90-day probation. Giant food clerks’ starting pay moved to $8.75, then to $9.25 on April 30, 2017, and $10 after six months on the job.
As proud as we are of our victories, there’s more to do. Legislative efforts can mask declining union density, but not solve it. We couldn’t improve the ratio of part-time to full-time workers. Although we eliminated two wage tiers, new hires still have far less generous health care and retirement benefits than top-tier members.
And management still has far too much control over staffing and scheduling. In the same jurisdictions that passed minimum wage increases and paid sick days, we’re exploring legislation for fairer hours.
We’re also looking to build campaigns to enforce our existing hours and scheduling language. Organizing and mobilizing cannot stop when a contract fight ends, and the leaders of our local are committed to making it a central part of our daily work.
Source: Labor Notes
Supervalu Inc. plans a 1 for 7 reverse stock split at the close of business on Aug. 1, slashing the number of its common stock to 57.1 million, the grocery store chain said Thursday.
Its total outstanding shares will also shrink to 38.4 million from 268.5 million. The company does not plan to issue fractional Supervalu Inc. plans a 1 for 7 reverse stock split at the close of business on Aug. 1, slashing the number of its common stock to 57.1 million, the grocery store chain said Thursday. Its total outstanding shares will also shrink to 38.4 million from 268.5 million.
The company does not plan to issue fractional shares and will instead offer cash redemption. The reverse split will not affect the number of preferred shares and Supervalu will continue to trade on the New York Stock Exchange. Supervalu shares were flat in the extended session after closing up 2.4% to $3.38. shares and will instead offer cash redemption. The reverse split will not affect the number of preferred shares and Supervalu will continue to trade on the New York Stock Exchange.
Supervalu shares were flat in the extended session after closing up 2.4% to $3.38.