Clarence Fanto: I'm registering my support for a win by striking grocery workers
LENOX — "This strike is hard for all of us. It shouldn't be happening."
That's the rather obvious conclusion of Stop & Shop President Mark McGowan, who doesn't take questions from reporters but communicates through spokespeople, full-page ads in The Boston Globe and on the supermarket's website.
"We're trying to be fair. We care about our associates' health care. Our associates' pay is a priority." Those were the day-by-day messages designed to paint the Netherlands-based Ahold Delhaize parent company as the good guys in the labor dispute involving about 31,000 unionized supermarket employees at the chain's 240 stores in Massachusetts, Connecticut and Rhode Island.
If the company with a $2 billion profit on sales of over $70 billion last year is trying to do right by its workers, not to mention its once-loyal customers, why is the strike that began April 11 still dragging on?
Even though the economy is at full employment and jobs are going begging here in the Berkshires, statewide and nationally, service industry workers are caught in a squeeze, even the few represented by unions. Rising health insurance costs are a prime culprit.
Nationwide, 34% of public sector workers are in unions, but in the private sector, only 6.4% are unionized. In Massachusetts, nearly 14% of employees are members (private and public sector combined).
At Stop & Shop, the region's only supermarket chain with union workers, average hourly pay ranges from minimum wage ($12 currently) for entry-level jobs to $17 per hour for store security personnel. Full-time store clerk salaries start at an average hourly rate of $15.90 while the overall hourly pay rate, including managers, is $21.30, according to the company. Annual salaries for cashiers average just under $16,000.
According to the trade publication Supermarket News, the impasse centers on what the union calls unreasonable cuts in pay and benefits versus what the company describes as a fair offer in a rapidly changing grocery market, especially rising competition from nonunionized retailers.
The United Food & Commercial Workers locals at Stop & Shop complain of cuts affecting part-time employees, 75% of the chain's workforce.
A 30-cent hourly pay increase would not offset proposed cuts such as the elimination of Sunday and holiday pay, a hike in weekly premium costs for employee-only health care coverage by up to 90% over three years, and a doubling of out-of-pocket insurance responsibilities for many employees, from $1,000 to $2,000 for individuals and from $2,500 to $5,000 for families.
The union also contends that Stop & Shop's proposal would reduce monthly pension benefits. The locals, too, described the retailer's efforts to deploy more self-checkout stations in stores as a threat to jobs.
Stop & Shop faces competition from nonunion chains, though it controls 68% of the grocery shopping pie in Berkshire County and nearby counties, but only 23% in Eastern Massachusetts.
On the company's website, a rosy picture is painted:
- A wage package among the best United Food & Commercial Workers retail contracts in the country;
- No changes to Sunday time-and-a-half premiums for current and future full-time associates;
- Keeping the defined benefit pension for all associates, totally funded by the company, while only 4% of privately employed Americans have only a defined benefit pension for retirement.
- No cuts to pension benefits associates already have earned.
- Stop & Shop would pay at least 92% of health premiums for family coverage and at least 88% for individual coverage — much more than what other large retail employers pay. The federal government only pays 72% of its employees' health premiums.
- Health insurance increases held to $2 to $4 per week each year, with deductibles remaining at $200 to $300, as first set in 2007.
The company must be losing more during the strike — an estimated $20 million since it started 10 days ago — than a sweetened offer would cost. The busy shopping week leading up to Easter and Passover has been a nearly total wipeout.
"They'll see big inventory losses, especially on profitable, perishable products like produce, flowers, meat and seafood that will go unsold,'' said Burt Flickinger, a grocery industry analyst for the Strategic Research Group.
For the long run, the chain risks losing loyal customers. I've found the large, well-stocked Price Chopper in Lenox around the corner from Stop & Shop a more pleasant, if somewhat pricier destination, even though it lacks an on-site service station to redeem "gas points." Many other shoppers must feel the same way, and some have defected to Big Y.
Besides, it's worth supporting organized labor, weakened as it has become in recent years. The widespread backing for the striking store employees, who are familiar faces to regular shoppers, is encouraging. Crossing the picket line seems unthinkable.
So, for unionized grocery workers, it's a last stand at New England's largest supermarket chain.
Another retail industry specialist, Sterling Hawkins, sees Stop & Shop's hard-line position as a symptom of "the pressures that legacy physical stores have that are now through the roof, and they're responding by trying to cut some of their overhead" and allocate those savings toward new tools to compete in the market. "Hence the strike." he says.
The old-line supermarkets like Stop & Shop, founded 120 years ago, face rising competition from cut-rate, nonunion, low-overhead chains like Aldi and Price Rite as well as behemoths like Costco, BJ's, Walmart and Target. Even drugstores like CVS are selling cereal, tea, coffee, canned foods and other staples.
In New England, residents are especially loyal to their grocery stores, as seen when Market Basket bounced back after its 2014 strike. Especially if Stop & Shop workers gain a better deal after taking a paycheck hit during the strike, shoppers might return as a show of support for the employees.
Maybe compulsory mediation is the only solution. Whatever the outcome, as someone tech-challenged who studiously avoids the self-service checkout lines in favor of the personal touch, I'm rooting for a victory by the union workers through a fair settlement that the company can well afford.
Clarence Fanto can be reached at email@example.com or on Twitter @BE_cfanto. The opinions expressed by columnists do not necessarily reflect the views of The Berkshire Eagle.
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