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REAP…A REVIEW OF THE U.S. GROCERY STORE INDUSTRYMarch 2006 E-MAIL: INFO@REAPINC.ORG WEBSITE: WWW.REAPINC.ORG
Grocery stores are ranked among the largest industries in the U.S. , providing 3.4 million jobs in 2002. During this same year there were about 86,000 grocery stores throughout the nation, down from 131,000 in 1998. With the exception of the large supermarket chains most grocery stores are small. In 2004, 34,352 stores each had annual sales of $2 million or more.
In 2004, total supermarket sales were $457.4 billion. Just Kroger, Albertson's, Safeway, COSTCO, AHOLD, SUPERVAL and Publix alone had 60 percent of the total industry sales in 2004. By sales the largest supermarkets in the grocery store industry are: Wal-Mart, Kroger, Costco, Alberstons, Safeway, Ahold USA , Supervalu, Publix, Delhaize America , Meijer, H.E. Butt, A&P.
Source: SEC Reports 1 / Sales for entire operation including non-food, stores and employees worldwide
Operation Under the Umbrella Of:
Kroger: Kroger is the nation's number one pure grocery chain and operates 2,532 stores coast to coast under several different names. Ralphs, King Sopoer, City Market, Dillions, Gerbes, Owens, Smith's, OFC, Fry's, Food 4 Less, Fred Meyer, Barclay, Kwik Shop, Quick Stop, Turkey Hill, Tom Thumb
Albertson:. Albertson's is the number two U.S. supermarket chain behind Kroger. The company operates 2,500 stores in 37 states; it also runs discount warehouse stores under the Super Saver and Max Foods banners. Albertson , ACME, Jewel-OSCO, OSCO DRUG, SAVON, Shaws
SAFEWAY: Safeway is one of North America 's largest food retailers with about 1,800 stores located mostly in the western, Midwest , mid-Atlantic regions of the U.S. as well as western Canada . Safeway, Vons Companies, Dominck's, Carr-Gottstein Foods, Genuardi's, Randall's
COSTCO: Costco is the largest wholesale club in the U.S. and Operates in 36 States with 415 warehouses and 42 million club card holders
SUPERVAL: SUPERVAL stores is one of the nation's largest food wholesalers which supplies about 2,300 retail grocery stores in 48 states with brand-name and private-label goods. SUPERVALU is also a major retailer with 1,550 stores in 40 states. Shoppers Food Warehouse, Cub Foods, Shop'n Save, Darm Fresh and Scott's Foods.
Publix: Publix Super Markets is the largest privately-owned supermarket operation in the U.S. Most of its 850 stores are in Florida , but it also operates in Alabama , Georgia , South Carolina and Tennessee .
AHOLD: Giant Foods, Tops Markets, Stop & Shop. Netherlands-based Royal Ahold is the world's third largest grocery retailer. It has about 1,000 supermarkets in four chains in the U.S. the largest Stop & Shop, in New England runs about 340 stores. Other chains include Tops Markets which are mostly in New York and Giant Food Stores which service the Baltimore-Washington, D.C. area of Maryland , Virginia and the District of Columbia .
Wal-Mart: In 2001, Wal-Mart had 5, 000 stores of which 3,800 were in the U.S. Wal-Mart Stores 1,651, 1,026 supercenters, 486 Sam's Clubs, 26 Neighborhood Markets,
MAKEUP OF THE WORKERS IN THE RETAIL GROCERY STORE INDUSTRY
Cashiers, stock and order fillers make up 50 percent of all grocery store workers. The retail grocery store sector of retail was in relative terms a higher paid industry however, over the past two and one-half decades the grocery industry has become one of the lower wage industries. Years of multi-tiered wage structures, long-term wage progression systems, erosion of higher wage job classifications to newly created low wage job classifications, and the rapid expansion of low wage part time jobs have served to drag wages down in the grocery store industry.
In addition to lower wages, less than a 40-hour week also contributes to low earning power. Part-time employees work 20 hours or less a week. The average number of work hours in a week for full-time workers in 2003 was 30 hours. The 29 or 30 hour work week has remained at such numbers since 1995.
UFCW and the Retail Grocery Industry
As mentioned before, the retail grocery store sector is part of a bigger industry classified by the Bureau of Labor Statistics as the retail industry. The retail industry as a whole is six percent organized by unions. In other words the retail industry is considered highly unorganized. On the other hand many of the biggest supermarket chains which produce two-thirds of the total industry sales are highly organized. Nearly 70 percent of the industry sales are completed by companies that are unionized in the 27 largest market areas in the country according to UFCW International Union reports. Over the past 25-years the union density in the 27 largest markets was in relative terms high – in some markets as high as 90 percent. Therefore, UFCW is the dominant union in the grocery industry and asserts major bargaining influence on wages and benefits in this sector of the retail industry.
Over the past three decades – 1980 to the present, the wage differential between the mainly non-union retail industry compared to the more unionized grocery store sector has been closing. According to the U.S. Department of Labor, Bureau of Labor Statistics average hourly earnings in the grocery store sector in 1980 were $1.57 an hour above the rest of the retail highly non-union industry. As the following chart shows the grocery store wage advantage has largely disappeared.
Average Hourly Earnings Comparison all Retail Industry Compared to Grocery Sector of Retail
Source: Bureau of Labor Statistics/2003 is the latest wage figures available from BLS
A LONG-TERM DECLINE IN WAGES AND BENEFITS IN THE RETAIL GROCERY INDUSTRY
It widely believed that the 2003 UFCW retail strike/lockout in Southern California involving 70,000 Kroger, Albertsons and Safeway workers was the beginning of the decline of decent wages and benefits in the retail grocery store industry and certainly in Southern California . It is also widely believed that UFCW completely failed in its overall bargaining/strike strategy and in the challenge of waging an effective struggle against the employer greed.
For sure, the worker concessions in Southern California amounts to hundreds of millions of dollars. But across the country the substantial erosion of UFCW wages and benefits had been taking place for two decades prior to the Southern California clash. Even in Southern and Northern California the retail chain companies had been for years siphoning hundreds of millions of dollars from the workers' pension fund to pay for health care benefits that clearly was the employer's obligation to pay for. Given such a national erosion of UFCW wages and benefits over such a long period of time, it was not surprising that any strategy could avert what amounted to a mop up operation in Southern California to a successful national employer strategy to bludgeon workers into concessions around the country for some two decades.
In the mid 1980s, Kroger was successfully getting major concession from workers in Ohio and bordering states. From Ohio , Kroger clobbered the workers in Atlanta . During the mid 1980s, Safeway and Giant in the Washington , D.C. area and Baltimore were forcing UFCW into two tier wage structures. During the late 1980s and early 1990s, Safeway smashed UFCW wages and benefits in Texas . In the early to mid-1990s Safeway and other retail chains rolled wages and benefits back in Denver and than marched into Western Canada and did the same thing. Again in the late 1980s retail chains dismantled wages and benefits in Omaha , Nebraska . In the early to mid1990s, retail employers crushed UFCW wages in Kansas City , Missouri and throughout the state of Kansas . In the 1990s, the employers obtained roll backs in wages and benefits in Louisville .
The reality is that such employers' assaults and greed played out throughout the nation over two decades before the Southern California clash would be a reality. The other realities are that a union cannot apply a local or regional bargaining strategy or contract campaign on a local by local basis when the employers are using a national strategy. When there is a need to protect industry standards there is no such thing as a local or regional fight. Equally important, the union cannot protect industry standards when those standards have been smashed everyplace else. It is also worth mentioning that when the employer assaults were launched many of the areas in questioned were highly organized and there was no Wal-Mart to compete against.
The challenge to UFCW leadership is to figure out how to regroup and come up with an enforceable national bargaining strategy and battle plan to address employers who resist said strategy and establish a minimum set of industry standards that must be expanded on industry wide. No small feat given the present circumstances. REAP E-MAIL: INFO@REAPINC.ORG WEBSITE: REAPINC.ORG Home
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