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As the supermarket showdown in California wears on, labor unions
across the country are at a crossroads.
By Nora Maculso
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Special to SunSpot
December 29
Negotiations to end a months-old strike against two grocery store
chains owned by Safeway Inc., Vons and Pavilion are at an impasse.
Meanwhile, contracts for workers in other regions -- including
Baltimore -- are set to expire early next year.If, in the end,
grocery store clerks prevail on the retailers to continue to pay for
health-insurance coverage, union negotiators in other areas will
have an advantage.
But if Safeway -- which is based in Pleasanton, Calif., and has
about 6,000 workers in Maryland -- is able to successfully shift
most of the costs to workers, "it's going to be like raw meat for
the chains here," said Bill Barry, director of labor studies at
Baltimore County Community College.
At the center of the dispute with the United Food and Commercial
Workers Union is the growing influence of Wal-Mart Stores Inc., the
world's largest retailer. Based in Bentonville, Ark., Wal-Mart is
squeezing retailers' profit margins on products ranging from toys to
groceries.
The company, the parent of the Sam's Club wholesale grocery
chain, plans to open food stores in California next year.
And as supermarkets prepare to battle Wal-Mart, they are
struggling to find ways to keep costs low without cutting payrolls.
Self-checkout machines and weekly specials, however, can only go so
far.
More broadly, the California labor struggle is considered a
microcosm of the current state of the nation's economy and for that
reason it is being watched by both union leaders and industry
officials.
The latest round of talks with a federal mediator ended in
impasse on Dec. 19. Workers have been on strike at the Safeway-owned
stores since Oct. 11. In addition, Albertson's Inc., a grocery chain
based in Boise, Idaho, and Ralphs, owned by Cincinnati-based Kroger
Co., bargain with Safeway. They locked out their union workers the
next day.
Neither Albertson's nor Kroger has Maryland stores. The UFCW has
1.4 million members nationwide, including about 50,000 locally.
The strike "has profound implications for consumers that go
beyond just having your supermarket picketed on a Saturday
afternoon," said John Brouder, managing consultant with Boston
Benefit Partners, an employee benefit consulting firm that works
with employers and labor unions.
Baltimore area eyed
Locally, striking California workers have picketed some Safeway
supermarkets in the Washington area to bring national attention to
their cause. Contracts in the Baltimore-Washington region expire in
March, and union leaders have told members to expect a strike if the
California dispute is not resolved and management here wants workers
to make similar concessions.
The Washington pickets have received a good response so far, and
there are plans to expand the campaign to Baltimore soon, said Jill
Cashen, a local UFCW spokeswoman. The union also represents
employees at Giant Food Inc. and Super Fresh here.
"Every contract is different," said Craig Muckle, public affairs
manager for Safeway's Eastern region. "I don't know what the issues
are on the table, and what they might end up being here. It's
difficult to speculate on what's going to occur in March."
While some stores are being picketed, "customers are still coming
in," Muckle said.
At Giant, the Landover-based subsidiary of Dutch grocer Royal
Ahold N.V., spokesman Barry Scher said officials are monitoring
developments in California.
"As a matter of course, we always follow labor contract
discussions involving the food industry, and other industries, too,"
he said. "It provides us with an opportunity to follow issues and
how they are resolved."
The Teamsters union added its support to strike last month,
stopping work at 10 distribution centers in Central and Southern
California. The pressure on the companies is stepped up, said
Brouder of Boston Benefit Partners.
"The stores have been facing an economic loss, but they still
have food on the shelves," he said. "If it gets to the point where
there's no food on the shelves, then I think the real question is:
'Are they going to settle? Is there ground for compromise?'
"The next two weeks are going to be telling," Brouder speculated.
"It's also going to tell what's going to happen in the
Baltimore-Washington area.
"Both sides claim to be hunkering down for a long job action," he
said. "If the California job actions are still ongoing, as other
affiliates of the companies have contracts come up they're probably
going to have to take the same strong stand.
"Both parties will," Brouder added. "It's conceivable you could
see this sort of job action go from coast to coast."
'Wal-Mart is the killer'
The steady advance of Wal-Mart, with its cheap prices and low
wage-and-benefit packages, has so far not had a big effect on the
Baltimore region, where shoppers have a number of alternatives.
But with its move in recent years into groceries, Wal-Mart has
become a direct competitor to Safeway, Giant and the other chains,
putting pressure on those companies to cut costs and offer lower
prices.
"The same issues that we're seeing in California we're going to
see here," said BCCC's Barry. "It's the Wal-Marting of America.
Wal-Mart is the killer."
Health-insurance costs are at the center of the California
dispute. In the early 1990s, the supermarket operators changed the
way they financed health benefits contributing to a trust fund to
ensure that benefits would be available to workers.
But the change also meant that the trust could be operated with a
smaller cash reserve, and the supermarket chains withdrew hundreds
of millions of dollars from that reserve fund.
Meanwhile, health-insurance costs have skyrocketed in recent
years, and the supermarket chains have proposed doing away with the
trust fund altogether. This would make workers responsible for
paying for any increased benefit costs.
"Over the last four years, we've seen the return of very
significant health-care inflation," Brouder said. Health-care costs
generally have grown at three to four times the inflation rate, and
"lots of employers have been making people pay more for insurance,"
he said.
Cashen, of the UFCW, sees the issue differently.
"Safeway is pushing an agenda in California and across the
country to eliminate health benefits for workers at its stores," she
said. "Chief Executive Officer Steve Burd has publicly proclaimed
this is a priority for them."
But Cashen pointed to a recently reached settlement between
Kroger and workers in West Virginia, who also had been striking over
health-care benefits. They are protected in the final agreement,
reached Dec. 9 and approved two days later.
"Hopefully, [the settlement] sends a message that when an
employer is looking to sit down and negotiate and work out an
agreement, you can bring an end to disruption."
Wake-up call for unions
BCCC's Barry says unions should view the California standoff as a
wake-up call to increase their ranks.
"For a long time, Wal-Mart was not a competitor for the unionized
grocery stores," he said. As a result, "unions have been kind of
slow about getting out to organize."
While the Baltimore area has greater union penetration than much
of the country, "that balance has been tipped," Barry said.
At Giant Food, its structure includes "tiers" of employee
benefits, with newer workers receiving lower wages and fewer
benefits than those with more seniority, Barry said.
Ahold, Giant's parent, could face pressure to cut costs at the
grocery chain as it recoups from a $1.1 billion accounting scandal
at its Columbia-based US Foodservice Inc. subsidiary, Barry said.
Meanwhile, Scher, the Giant spokesman, said the advance of
Wal-Mart and other "big-box" retailers in the grocery business is
having some impact.
"These new, non-union, lower-cost retailers are trying to take
our customers away not with better service or better-products but
with lower operating costs and a constant emphasis on advertised
pricing specials," he said. "These tactics ultimately hurt us and
other established local food stores by challenging our ability to
grow our business and continually provide good jobs."
Cost issues loom
Safeway has declined to estimate the strike's potential cost.
Mark Hugh Sam, an equity analyst at Morningstar Inc. in Chicago,
said the company could lose about $40 million per month. That
amount, he added, is "not a lot for a company like Safeway," with
$800 million in free cash flow.
The health-care issue, however, is "huge," he added. "What
exacerbates Safeway's problems in California in particular and
throughout the supermarket industry is the competitive pressures
placed by the continued expansion of Wal-Mart."
Giant expects health-care costs will rise 24 percent next year,"
Scher said. And even as costs rise, Giant, like other supermarket
chains, is under relentless pressure to cut prices. The retailer's
efforts include stepped-up promotional activities in recent months
to attract and keep customers, he said.
Mustering support
If local supermarket employees end up on strike, public support
could be tough to muster. Many people at the Safeway stores being
picketed in the D.C. area seemed unaware of the California dispute.
But store managers aren't taking any chances. One Safeway store
in Bowie in Prince George's County that recently was picketed had a
sign immediately inside the store saying, "Safeway employees here
are not on strike."
"I don't think they're going to get that much sympathy here,"
said David C. Martin, professor of human resource management at the
Kogod School of Business at American University in Washington.
Shoppers in the Baltimore-Washington area can shop at such non-union
chains as Sam's Club, Food Lion or Costco Wholesale Corp.
Yet Jackie Mills, a union worker from California in town just
before Christmas for the Washington effort, said local shoppers'
reaction to the strikers' presence at the stores has been "really,
really good.
"They're really surprised," she said. "They heard about this in
California and the other states. They didn't realize they were going
to be affected by it."
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A foot soldier's march to unionize
By Adam Fifield -Philadelphia Inquirer Staff Writer
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December 26,
2003
You might call her South Jersey's Norma Rae.
For several weeks in the summer, from 7 p.m. until midnight, a
pregnant Donna DiIenno sat in a parking lot in front of the
Washington Township Wal-Mart, where she had once worked.
Managers stepped out of the store and asked her to leave.
Occasionally, a former coworker walked over and surreptitiously
picked up a union authorization card.
DiIenno, who had worked at the store for nine years and once was
an ardent Wal-Mart defender, became troubled in recent years by what
she described as the unfair treatment and intimidation of employees.
When the 40-year-old Monroe Township woman voiced concerns over
staff changes, she was called into a meeting with a manager and
subsequently fired for "insubordination."
It was then that she became a foot soldier in the growing battle
between the nation's largest corporation and the United Food and
Commercial Workers International Union, which is striving to
organize Wal-Mart's 1.2 million employees.
"Somebody needs to fight the fight," DiIenno said this month.
A national Wal-Mart spokeswoman said the company prohibited the
mistreatment of employees - called associates - and listened to
their concerns.
The union acknowledges that taking on the retail colossus will be
an uphill battle, but says it has no choice because the stakes are
enormously high.
"We can't just walk away and let Wal-Mart take over working
America as we know it," said Peg Michalowski, the Wal-Mart
coordinator for the union's Local 1360, based in West Berlin. If
Wal-Mart expands unchecked, union officials say, it will threaten
labor's livelihood and lead other companies in a "race to the
bottom" of wages, benefits and worker treatment.
Wal-Mart says that is not the case. "There's a lot of
misinformation out there," national spokeswoman Christie Gallagher
said. "Because of our size, we're a target. There are numerous
groups out there who do not want us to succeed for their own
reasons."
Describing the company as "pro-associate," Gallagher said
Wal-Mart provided very competitive wages and benefits as well as a
401(k) plan, a profit-sharing program and stock purchases.
"There are many industries where unions are right for the
industry," Gallagher said. "But, honestly, unions are certainly not
right for Wal-Mart. We don't believe that a third-party
representation would improve anything with our relationships. And we
value our culture, and we don't think it would add anything to our
culture."
With $244.5 billion in sales during fiscal 2003, Wal-Mart Stores
Inc. is the country's top private employer, with more than 3,000
stores nationwide, including 25 in the Philadelphia area. Although
it has earned the admiration of many economists and consumers,
critics say it shutters mom-and-pop stores and sends manufacturing
jobs overseas.
The drive to unionize reaches across the Philadelphia region. The
United Food and Commercial Workers Union has targeted three other
stores in southern and central New Jersey - Burlington Township,
Pennsville, and Hamilton Township in Mercer County - and three in
Pennsylvania, including a South Philadelphia Wal-Mart.
Leonard Purnell, who oversees the union's organizing efforts at
eastern Pennsylvania Wal-Marts, said that if it secured a contract
at one store, others might follow suit. "Winning one store wall to
wall and then getting a contract would create a domino effect," he
said. "It would show people, 'Hey, yes, it can be done.' "
In Washington Township, DiIenno and local organizers say a union
could provide better pay and benefits for employees, and give them a
common voice to help set up grievance procedures and job-protection
rules. She said that if she had union protection, her termination
"would never have happened."
In August, her position as support manager was eliminated and she
was offered a choice of new jobs with the same pay and hours. She
was upset, she said, because she had worked so loyally and felt the
company didn't appreciate the work she had done. So she used
Wal-Mart's "open-door" policy and wrote a letter to the store
manager expressing her frustrations.
Less than a week later, she was summoned to the district
manager's office. According to DiIenno's exit interview, signed by
another manager who was present, "Donna showed disrespect and
insubordination by refusing to speak with [the district manager].
Donna was asked to please sit down two times and then instructed to
sit by [the district manager] or speak with him. Donna stormed out
the door and was very disrespectful."
DiIenno said the district manager would not tell her why she was
there, so she said she'd rather stand. " 'Tell me why I'm in here so
I can decide if I have to get somebody else in here,' " DiIenno
said. "He said, 'Why are you being insubordinate?' I said, 'I'm not
being insubordinate for refusing to sit down.' He pushed the door
shut and said, 'You're not leaving until you sit down.' "
DiIenno opened the door and left, saying she had to finish her
job. At that, the manager yelled: "You don't have a job."
DiIenno, whose baby is due next month, still does not know why
she was called in for a meeting, but figures her letter was a
factor. She said a Wal-Mart manager who has moved to a different
store told her that the letter had "screamed union."
Store manager Frank Pellicori and district manager Don Fann did
not return calls seeking comment. Gallagher, the national
spokeswoman, said she could not comment on current or former
employees but stressed that Wal-Mart was not antiunion and did not
prohibit workers from discussing unions or retaliate against those
who did.
Gallagher said Wal-Mart's open-door policy permitted workers to
"go to any level of management, up to and including the CEO, and to
discuss any ideas they have, any concerns, without fear of
retaliation."
She added that Wal-Mart employees were free to unionize but had
chosen not to.
The 1.4 million-member United Food and Commercial Workers Union
sees it differently. Members say Wal-Mart has kept labor out with an
aggressive strategy, including videos shown to new employees that
portray unions as greedy and dishonest. And at the first hint of
union activity, they say, the company dispatches special teams from
corporate headquarters in Bentonville, Ark., to dissuade workers
from signing up.
"Once you start organizing, they put the hammer down, and the
suits come in from Bentonville," said Brian Covely of Local 1360.
Gallagher acknowledged that such teams were used, but said their
purpose was not to browbeat workers but rather "to answer questions
the associates might have about the promises the union has made to
them." She added that the meetings were voluntary.
A half-dozen employees at the Washington Township store, who did
not want to be identified for fear of reprisal, said they had
attended some of those gatherings. "It was mandatory that you go to
these meetings," one said. "They said the union's going to come in
and take your money and talk for you because they think you can't
talk for yourself."
The union's effort to organize Wal-Mart comes amid a backdrop of
labor complaints against the company and steadily declining
membership among American unions.
Wal-Mart is facing about 40 lawsuits contending it forced
employees to work off the clock, and a grand jury is investigating
whether the company knew about alleged undocumented immigrants
working in its stores.
Off-the-clock work is strictly prohibited by Wal-Mart, Gallagher
said in response. The company is cooperating with the grand jury's
investigation, another representative said.
As for organized labor, membership has dropped from 20.1 percent
of the national workforce in 1983 to 13.2 percent last year,
according to the Bureau of Labor Statistics.
Local organizers, who began the Washington Township effort in
July, said they would keep trying to get a foothold. Representatives
handed out cards at the store last week and will visit workers'
homes. DiIenno plans to continue her union work once the baby is
born and she gets settled.
They hope to petition for an election with the National Labor
Relations Board by the summer.
Michalowski said that even if the union did not prevail, it would
still have an effect.
"As long as we're campaigning, it keeps Wal-Mart accountable,"
she said. "They're going to have to watch their p's and q's a lot
more closely."
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Wal-Mart rollout - or rollback?
By
Daniel B. Wood Staff writer of The Christian Science Monitor
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23
December 2003
LOS ANGELES – It is the world's
largest company and America's top private employer. Analysts say it
saved US consumers $20 billion last year in its stores alone and
another $100 billion by forcing other retailers to slash prices to
compete.
But as Wal-Mart stores continue to
spread across the US, community opposition is also mounting from
critics who say its "always low prices" mean always low wages for
nonunion workers and that its famous "rollbacks" on goods roll over
local businesses and economies.
The latest legal battleground is
California. The retail giant wants to place the first of several
dozen grocery/retail superstores in California. Faced with a rebuff
in Inglewood, near Los Angeles, the company got enough signatures to
put its plans to a special ballot vote. But last week, two community
groups filed suit to stop the vote, which would bypass the usual
City Council oversight of such developments.
Analysts say the skirmish is a
window into the kind of fights Wal-Mart can expect elsewhere in
coming years. Already, the firm faces some 40 lawsuits regarding
allegations such as forced overtime without pay and gender
discrimination. But such backlashes may not stop the larger trend
that Wal-Mart represents: catering to consumers that flock to
big-box stores for deep-discount values.
"Whatever the skirmishes look like
on the surface, the vast majority of people vote with their purses,"
says Ira Kalish, global director for Deloitte Research. "The
American and global consumer has internalized discounting as
important to them."
Fearing the foothold of Wal-Mart in
Inglewood, the city last year attempted to pass an ordinance that
would have blocked the company from building a combination grocery
and discount store. Such superstores are typically twice the size -
180,000 to 225,000 square feet - of a typical Wal-Mart. Under
pressure of a Wal-Mart lawsuit, the ordinance was rescinded and
pro-Wal-Mart groups qualified an initiative for an April vote.
Critics say it is a violation of
state law for the retailer to go around elected officials to the
voters and worry that the special election sets a dangerous national
precedent for companies to circumvent long-established rules on
matters such as environmental oversight and public hearings.
Wal-Mart officials say the
Inglewood fight is not backed by the majority of residents, but
rather is fueled by money and union activists who don't like the
store's nonunion policies.
More fights are coming within
California alone, San Diego next month will consider a ban on retail
stores that exceed 130,000 square feet. Contra Costa County in
northern California already passed one, though it is being
challenged by Wal-Mart officials. And San Marcos recently deadlocked
on whether or not to rescind approval of a second Wal-Mart there,
forcing a referendum on the issue to a March vote.
"So far a disproportionate amount
of Wal-Mart's country-wide expansion has been in the South, which is
fairly non-union," says Mr. Kalish. "Now that they are moving into
more populated, industrialized and more unionized regions, they are
going to come up against ... opposition."
All this moves the giant retailer
into unknown territory, because no other American retailer has ever
gotten so big. But they say the disputes not likely to deter
Wal-Mart from growing, because Americans have gotten used to the
giant "rollback" discounts offered by the store.
"Many workers might make less
money, but to the extent that millions of consumers pay less, they
free up money to buy other stuff - making them and society in a
sense wealthier," says Kalish.
Such assessments are anathema to
labor unions and social justice organizations who say that
Wal-Mart's cheap prices come at the expense of decent wages and
benefits for workers. "Wal-Mart has a track record of decimating
locally owned small business," says Lizette Hernandez, of the
Coalition for a Better Inglewood.
Joining the fight are other
citizens and area officials who say they are concerned about the
preservation of neighborhoods, traffic congestion, and retail
sprawl. They say the Inglewood initiative requires only a majority
for approval, but will require a higher standard - two-thirds of
voters - to challenge specifics of the building phase once it
begins.
"Wal-Mart is trying to muscle its
way into the community by taking advantage of loopholes in the law
that are inappropriate," says Gerome Horton, state assemblyman from
Inglewood.
Part of the increased spotlight on
Wal-Mart in California has come because of protracted contract
disputes between southern California grocery workers and three major
supermarket chains. Vons, Ralphs, and Albertsons have repeatedly
said union concessions are needed for them to compete favorably with
Wal-Mart's new grocery stores. Wal-Mart sales clerks reportedly make
$8.23 to $10.00 per hour, compared with a reported $17.90 for senior
clerks at Vons, Ralphs, and Albertsons.
Strikers have won much public
support. Similar grocery strikes are in planning stages in other
states, making the California confrontation with Wal-Mart a sort of
national battleground.
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Lumps of Coal Piling Up for Wal-Mart
Maquila Solidarity Network
(MSN)
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December 22, 2003
For Immediate Release
TORONTO - With three days remaining in its "Send Coal to
Wal-Mart" campaign, the Toronto-based Maquila Solidarity Network
(MSN) announced today that close to 4,000 people have already sent a
virtual lump of coal to the world's biggest retailer and largest US
employer. Wal-Mart is the target of an on-line campaign calling on
the retail giant to respect the rights of women and men who toil for
"everyday low wages" making and selling Wal-Mart products.
According to MSN spokesperson, Ian Thomson, people concerned
about Wal-Mart's treatment of workers around the world have until
midnight Christmas Eve to send their virtual lump of coal and
holiday greetings to Wal-Mart. "We're hoping these holiday messages
will serve as a wake-up call to this modern-day Scrooge and convince
it to treat its workers fairly in 2004," says Thomson.
On December 9, MSN declared Wal-Mart the winner of its fourth
annual "Sweatshop Retailer of the Year" award. According to Thomson,
Wal-Mart was this year' overwhelming favourite because of its
"disregard for the rights of workers who make and sell its
products."
While most of the coal sent to Wal-Mart has come from consumers
and workers in the US and Canada, according to Thomson, virtual
lumps of coal have also been sent from several other countries,
including Kenya, India, Israel, Hong Kong, the UK, and Germany.
"Wal-Mart is well-known worldwide for its exploitation of immigrant
workers, intolerance of worker organizing, and use of sweatshop
labour to make its bargain basement products," says Thomson.
To access MSN's Wal-Mart holiday season campaign, and to read a
short selection of holiday protest messages sent to the company by
concerned consumers, go to:
www.SendCoalToWalmart.com
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City must go back, assess urban decay issue related to
supercenter, judge rules
By JAMES BURGER, Californian staff writer
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Monday December 22nd, 2003
A yearlong battle over a Wal-Mart Supercenter in south
Bakersfield ended in defeat for the city and developer Monday.
Kern Superior Court Judge Kenneth Twisselman ruled that the city
of Bakersfield didn't do an adequate job evaluating the
environmental impacts of a major shopping center at Panama Lane and
Highway 99 early this year. He ruled the project's environmental report invalid, and sent the
city back to fix its mistake.
A 220,000-square-foot Wal-Mart Supercenter was the most
controversial of the two big-box stores proposed for the shopping
center. The other store will be a Lowe's.
Members of the United Food and Commercial Workers union and other
Wal-Mart opponents mounted a spirited opposition to the supercenter
on Panama and a second one at Gosford and Harris roads.
They said the mega-retail centers -- which would include a
full-service grocery store in addition to a regular Wal-Mart --
would steal jobs from grocery workers and the city's small-business
community. Even so, the City Council approved the supercenters in February.
Both projects have since been challenged in court.
Twisselman said the environmental report for the Panama shopping
center had done a good job of reviewing the project's impact on air,
traffic, general health and the San Joaquin kit fox.
But, he said, the city failed to study whether the huge stores
planned for the project would cause an economic chain reaction that
would leave other "big box" buildings around Bakersfield vacant.
City staff had argued, at the time the two Wal-Marts went before
the council, that economic impacts of a project were not an
environmental concern.
But Twisselman ruled that vacant, unattractive buildings have an
environmental impact -- an urban decay that the City Council should
have evaluated before clearing the Wal-Mart project for
construction.
Lawyers for the Bakersfield Citizens for Local Control, the group
that filed the lawsuit, cheered Twisselman's decision and hailed it
as a critical step in fighting similar mega-projects in California's
Central Valley.
"The judge has rebuked the city and said they can't play 'zoning
for dollars,'" said Bakersfield Citizens' lawyer Steven Herum.
"Major retail developers cannot promise sales tax and low-paying
jobs without considering the impact to long-term businesses."
Panama and Highway 99 project developer Lee Jamieson, who also
built the Northwest Promenade project on Rosedale Highway, would not
comment about Twisselman's decision on Monday.
City Attorney Ginny Gennaro said the city will need to study the
impacts outlined in Twisselman's decision, add them to the original
environmental report and bring it back to the Bakersfield City
Council for re-certification.
"This isn't the first time an EIR has been invalidated and it
won't be the last," said City Councilman Mark Salvaggio, referring
to the report. "We just have to go back to the well and do better on
that point."
She also said that the city will have to re-evaluate the way it
looks at all major commercial projects in light of Twisselman's
decision.
"We'll begin to look at 'urban decay'" as an environmental
impact, she said.
Monday's decision might also affect the second Wal-Mart
Supercenter project at Gosford and Harris roads.
Bakersfield Citizens for Local Control has also sued the city
over that project, which goes before Twisselman on Jan. 16.
In the meantime, construction on the Panama Lane and Highway 99
project is continuing. Herum asked Twisselman, as soon as the ruling against the project
was handed down, to halt ongoing construction at the site. But Twisselman refused to block construction immediately.
Instead, he scheduled arguments on a temporary restraining order
for a Wednesday morning hearing. Gennaro said the city doesn't want to see 250 jobs frozen by such
a restraining order.
"We think it would be a shame to put these workers out of
business at any time of the year -- but especially this time of
year."
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Grocery industry's labor woes are rooted in Wal-Mart expansion
By
Alan Zibel BUSINESS WRITER - Oakland Tribune
[back to top]
Sunday, December 21, 2003
FROM OAKLAND to Contra Costa County to
the Central Valley city of Turlock, Wal-Mart is facing off against
unions, government officials and community groups as it tries to
roll out 40 new mega-stores in California.
It's a battle that the Arkansas-based discount giant is taking
very seriously. California is the largest American market in which
Wal-Mart has no Supercenter stores, which contain Wal-Mart's
traditional discount department store and a full-fledged
supermarket.
These monster stores range from 180,000 to 225,000 square feet,
employ about 500 people and sell everything from ground beef to lawn
chairs. The first in California is scheduled to open early next year
in La Quinta, near Palm Springs.
In Northern California, three Wal-Mart Supercenters have been
approved by local officials in Stockton, Redding and Chico. The
company has filed applications for stores in Tracy, Lodi, Turlock,
Gilroy, Willows, Red Bluff and Yuba City.
The implications for California's supermarket industry are
serious.
Wal-Mart already sells more groceries than any of the nation's
largest food retailers, according to a study by consulting firm
Retail Forward. The company recorded $82 billion in grocery and drug
sales in 2002, compared to $52 billion for Kroger, the country's
largest grocer, and $29 billion for Pleasanton-based Safeway Inc.,
the study said.
Unlike grocery competitors such as Safeway and Albertsons,
Wal-Mart is not unionized and has lower labor costs than
conventional grocers. Lou Mellet, a retail analyst with the New
York-based Strategic Resource Group, said the prospect of competing
with Wal-Mart is the underlying reason behind grocery companies'
hard line in their ongoing labor dispute with the food workers union
in Southern California.
Executives at leading grocers such as Pleasanton-based Safeway
Inc., must reduce their labor costs to be able to compete with
Wal-Mart, Mellet said.
"It's not coincidental that the strike is happening right before
Wal-Mart starts to invade," Mellet said. A Safeway spokesman did not
respond to calls for comment.
For each Wal-Mart Supercenter that opens in the next five years,
two conventional supermarkets will shut their doors, Retail Forward
said. The study projected that Wal-Mart's rapid expansion of
Supercenters will increase its share of the nationwide supermarket
business from 19 percent last year to 35 percent in 2007.
"They're coming," said analyst Jason Whitmer of FTN Midwest
Research. "It's inevitable, they'll find their way in."
When a Wal-Mart Supercenter enters a market, Whitmer said, prices
tend to drop as existing supermarkets start price wars.
While these lower prices may be good for consumers, Bay Area
labor groups, environmentalists and some elected officials argue
that the benefits aren't worth what they see as the negative social
impacts of a giant Supercenter.
An increasing number of local governments have decided to
confront Wal-Mart. On Tuesday, the Alameda County Board of
Supervisors followed the lead of Martinez, Contra Costa County and
Oakland in passing an ordinance that restricts superstores. It bans
stores of more than 100,000 square feet that devote more than 10
percent of their space to non-taxable items such as food. The ban
would apply to unincorporated Alameda County communities such as
Castro Valley and San Lorenzo.
While Wal-Mart is not specifically named in the ordinance, the
company's plans to expand its Supercenter business in California
clearly were the impetus behind the measure, as well as similar
ordinances in other communities.
"We're really concerned about these large-scale retail stores,"
said Supervisor Alice Lai-Bitker. Traffic congestion that would
result from a super-store is worrisome, she said, and local small
businesses should be protected.
Wal-Mart spokeswoman Amy Hill said the company is considering
taking the issue to Alameda County voters in a referendum as well as
suing the county.
In neighboring Contra Costa County, county officials' battle with
Wal-Mart will hit the ballot box in March. Last summer, supervisors
passed an ordinance that would ban retail stores of more than 90,000
square from devoting more than 5 percent of their space to
non-taxable goods in unincorporated areas.
Wal-Mart successfully blocked the measure from taking effect,
obtaining more than 30,000 signatures to force a March referendum on
the measure. "I think both sides are taking it very seriously and
investing a lot of time and resources," Hill said. "These types of
ordinances are anti-competitive and anti-consumer ... and clearly
aimed at preventing the growth of our company."
John Gioia, a Contra Costa supervisor and co-author of the
ordinance, said he expects Wal-Mart could spend up to $1 million on
the ballot measure. Public records show that the company gave
$175,000 in the first half of the year to a group the company formed
to oppose the county's restrictions.
"This is really about local control," Gioia said. "Do you want
your zoning decisions to be made by a corporation in Arkansas?"
Gioia and other supporters of the Contra Costa ordinance say a
Wal-Mart Supercenter or a similar store owned by Target or Kmart,
would not raise enough sales tax revenue to compensate for the
increase in traffic that would come from customers making several
trips a week.
Jeremy Madsen, field director of San-Francisco-based
environmental group Greenbelt Alliance, argues that so-called
big-box superstores are inherently troublesome because they increase
auto traffic, take up a lot of land and tend to be put on the edge
of communities.
"Let's put the facilities that people need where the people are,"
Madsen said. He called it "offensive" that Wal-Mart would hire paid
signature-gatherers to put Contra Costa County's ordinance on the
March ballot.
But some officials don't have a problem with Wal-Mart. David
Hudson, a member of the San Ramon City Council, opposes the Contra
Costa ballot measure. He believes the county would benefit from
increased sales tax revenues Wal-Mart would bring for non-grocery
items and said traffic would be mostly during non-commute hours such
as Friday nights and weekends.
"I'm trying to figure out where the citizens are benefiting from
this," he said. "Competition brings prices down and protectionism
brings prices up."
The Contra Costa ballot measure does not affect conventional
supermarkets, discount stores that don't sell groceries and
warehouse clubs such as Costco. While supporters of the ordinance
argue that the super-store format causes more traffic jams than
warehouse stores, Wal-Mart says it is being unfairly singled out.
Wal-Mart, which has long been hostile to labor unions, says
unionized workers at competing grocers such as Safeway and
Albertsons are the real force behind efforts to block its expansion
plans.
"In reality, this is really about one thing, and that's labor
unions and their efforts to stop Wal-Mart's growth," Hill said.
Richard Benson, president of United Food & Commercial Workers
union Local 870 in Hayward, emphasized that a broad coalition of
groups are opposed to Wal-Mart's expansion plans.
"It will take business away from union and non-union stores," he
said. "You're taking dollars from existing businesses and not
creating new businesses."
Benson said an average unionized grocery worker in Northern
California makes about $14.50 an hour, and receives a benefit
package worth more than $5 an hour. By contrast, Wal-Mart workers in
Northern California make about $8.50 an hour, Benson said, and many
workers don't receive health benefits because they can't afford the
required co-payments.
Hill said that all of Wal-Mart's employees qualify for health
benefits, and more than 50 percent participate in the health plan,
with another 40 percent receiving health insurance through a spouse
or parents. The company's health plan costs $13 every two weeks for
an individual and $57 every two weeks for a family, she said.
"People are joining our company for the benefits despite what the
unions may say," she said.
Wal-Mart says that in many of its markets with Supercenters,
wages are higher than its union competitors. In Las Vegas, for
example, a Wal-Mart bakery worker starts at $8 an hour, while a
comparable position at a unionized supermarket pays $7.10, according
to the company.
Mark Wolfe, a lawyer who represents unions and other groups
opposed to Wal-Mart's expansion plans, calls the company's tactics
"heavy-handed and bullying." "This is a corporation that is the
largest and richest in the world that is used to getting its way,"
Wolfe said.
In Turlock, Wal-Mart's plans for a Supercenter met resistance
from city officials who argued that it would increase traffic and
put existing supermarkets out of business, which could lead to
economic blight at neighborhood shopping centers. On Tuesday night,
the Turlock City Council approved an ordinance that would block the
Supercenter.
Charlie Woods, the Central Valley city's community development
director, accused Wal-Mart of "attempting to intimidate and
overwhelm the (city) council" by meeting with council members,
reviewing their financial disclosure forms and asking when they were
running for re-election.
Wal-Mart spokesman Peter Kanelos said the company had not asked
local officials when they are running for re-election and said that
disclosure forms are public documents that anyone may examine.
In Tracy, officials are studying the company's proposal as well
as a plan for a WinCo mega-supermarket near Interstate 205, but the
plan hasn't generated much controversy so far.
In Gilroy, Wal-Mart was a major issue in the Nov. 4 city council
election. The company sent a flier to all registered voters urging
them not to support candidates supported by a union group critical
of a proposed Supercenter.
"Don't be fooled by the union propaganda," the flier read,
criticizing "outside labor groups that do not serve the citizens of
Gilroy."
The company's plans for its conventional department stores also
are not without controversy. In Richmond, community groups are
opposing the company's plans to convert a former Macy's into a
conventional Wal-Mart store. In Fremont, the city council voted 3-2
for a conventional Wal-Mart store, but the proposal is tied up in
its second round of litigation.
"They don't give a whole lot back to the community, and they
force out local merchants who have been part of the community for
years," said Fremont Mayor Gus Morrison, who opposed Wal-Mart's
plans.
Bob Wasserman, a member of the Fremont City Council, voted for
the Wal-Mart in his city, but said he would oppose turning that
store into a Supercenter. A combined grocery and department store
would threaten competing supermarkets that anchor the city's
successful Irvington and Warm Springs shopping districts, he said.
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Turlock council fights good fight vs. Wal-Mart
Modesto Bee
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December 18, 2003
The Turlock City Council stood behind local business and with a
lot of popular sentiment in its unanimous vote Tuesday to try to
prevent Wal-Mart from building a supercenter at the north end of the
city.
While the company already has threatened to sue or try to take
the issue to a citizen vote -- as it has in other cities -- the
council appears firm, recognizing the serious issues and impacts
associated with the arrival of such a huge retailer. These are the
same concerns surfacing around California as Wal-Mart pushes its
plan to open 40 supercenters in the state.
Communities that have few shopping opportunities welcome a
supercenter. But in most towns, the Wal-Mart supercenter enters as
an economic bully. While its low prices appeal to many consumers,
they come at a tremendously high price for the community as a whole.
Supercenters drive out other supermarkets, reducing the choices
for shoppers and eliminating good-paying, benefited jobs. One reason
that Wal-Mart prices are low is that it pays some of its workers so
poorly that they qualify for -- and need -- food stamps and
taxpayer-supported Medi-Cal coverage. The fallout extends beyond
other supermarkets to flower shops, bakeries and even to wholesalers
whose economic well-being hinges on whether they do or do not sell
to Wal-Mart.
All these fears have been expressed about the Turlock project,
along with concerns about increased traffic at the already-busy
Monte Vista Avenue interchange.
But local planning issues are only a small facet. The company has
gotten so big and so powerful that it is changing the face of retail
trade and the generally strong track record of the supermarket
industry as an employer. Those should be matters for deliberation at
the state and federal levels, not just the City Council in Turlock,
and food for thought for consumers.
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Suit Against Wal-Mart Can Proceed, Court Says
Carolyn Carlson Journal Staff Writer -Albuquerque Journal
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18
December 2003
Wal-Mart can be held liable for alleged malicious abuse of
process even though it was not a party to a lawsuit filed against
several West Side neighborhood associations, the state Court of
Appeals has ruled.
Ten individuals and Geltmore Inc., developer of the West Bluff
Shopping Center at Coors and I-40 that includes a Wal-Mart
Supercenter, in June 2000 filed a Strategic Litigation Against
Public Participation, or SLAPP, lawsuit against the neighborhood
associations and four opponents of the center.
A SLAPP lawsuit is a civil complaint in which an alleged injury
is the result of petitioning or free speech activities protected by
the First Amendment.
Geltmore's lawsuit claimed the neighborhood groups were used as a
front by Wal-Mart competitors to prevent the retailer from locating
in the center. Named in the lawsuit were the Grande Heights
Neighborhood, West Bluff Neighborhood and West Area Residents for
Aesthetic and Responsible Expansion associations.
In October 2000, District Judge William F. Lang threw out
Geltmore's lawsuit, saying the First Amendment protects the people's
right to petition the government for redress of grievances.
A year later, the four individual opponents filed a SLAPP-back
lawsuit against Geltmore, the 10 individuals who had sued them and
Wal-Mart.
Their claims included allegations that Wal-Mart was behind the
scenes in the 2000 Geltmore lawsuit, according to one of the
attorneys representing the individuals.
Wal-Mart's attorneys filed motions to dismiss the claims, saying
it could not be liable for malicious abuse of process because it was
not a party in the SLAPP lawsuit and the plaintiffs failed to state
a claim.
District Judge W. Daniel Schneider agreed, dismissing Wal-Mart
from the lawsuit.
In April, the four individuals appealed Schneider's ruling to the
Court of Appeals.
Friday's ruling reverses Schneider's decision and allows the
SLAPP-back lawsuit to move forward in district court with Wal-Mart
as a party.
The ruling said there are sufficient allegations against Wal-
Mart to state a claim for civil malicious abuse of process and for
civil conspiracy.
The opinion said allegations that Wal-Mart sanctioned, encouraged
and funded the Geltmore SLAPP lawsuit, together could be interpreted
as stating a claim that Wal-Mart played an active role in initiating
the underlying SLAPP lawsuit by providing the funding.
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