Warren, Biden Side With Workers in Massive Grocery Strike

(Bloomberg) -- Some 31,000 Stop & Shop workers are headed into their second week on the picket line, buoyed by national attention and, on Thursday, a planned visit from Joe Biden. But the people with the most at stake may be the ones who don’t even work for the grocery chain yet.

In part, the workers are fighting to protect their own pay and benefits from the cost-cutting demands of Dutch-Belgian parent Ahold Delhaize. They’re also resisting the company’s proposal to establish less generous terms for tomorrow’s workers, saying they’ll hold out to defend future employees’ compensation.

“We’re in this for the long haul,” said Framingham, Massachusetts, employee Celine Blaisdell, who has worked at Stop & Shop for 29 years. “People that went before me fought for me before I was a union member. It’s important for me to do the same.”

With no end in sight, the strike -- the biggest in the U.S. private sector in years -- underscores the pressures faced by Stop & Shop and other retailers. The labor market is tight, and workers have been encouraged by successful work stoppages around the country and across industries. At the same time, the grocery industry, already known for razor-thin profit margins, only gets more competitive.

Stop & Shop is trying to balance “rewarding our associates, protecting jobs and serving our customers in a dramatically changing, mostly non-union environment,” company president Mark McGowan said in message to employees posted online on April 12.

Walmart Inc. and Kroger Co., the two largest grocers in the U.S, have been spending billions to improve their technology while keeping prices low. Discount grocer Aldi has been expanding. And Amazon.com Inc. is squeezing competitors on price and at the same time daring them to match the company’s recent increase to a $15 minimum hourly wage. “Better yet, go to $16 and throw the gauntlet back at us,” Chief Executive Officer Jeff Bezos wrote this month in his annual letter to shareholders.

Warren, Biden Side With Workers in Massive Grocery Strike

Stop & Shop points out that it’s the only large, fully unionized grocery chain in New England. “Competing almost exclusively with non-union food retailers, Stop & Shop’s labor costs are no longer competitive,” the company said in an email.

The union already has contracts that provide more perks to workers with longer tenure, the company says: “This is nothing new. Moreover, our offer for new associates is better than what those associates would receive at almost any of our competitors.”

In 2016, the union did allow the company to be less generous with newer hires, for example providing fewer holidays, said Jeff Bollen, president of one of the five UFCW locals now on strike. He would have preferred to strike then, he said, rather than make those concessions, which seem to have emboldened management’s demands this time around.

UFCW also argues that Ahold doesn’t have grounds to demand these concessions, pointing to the company’s $2 billion profit last year and $4 billion in stock buybacks over the past three.

‘Just Wrong’

Cutting wages for future workers has been a persistent flashpoint in union negotiations across industries. In 2015, the UAW struck agreements to phase out the two-tier system it had agreed to during the auto industry’s 2007 crisis. Grocery workers in Southern California ended a similar system at Safeway Inc. and Kroger Inc. in 2007, three years after management had argued cuts were necessary to compete with Walmart.

The two-tier system creates a “second, lesser class of employee,” said John Grant, a local UFCW president in California who was involved in the grocery workers’ negotiations there several years ago. “The increased turnover it creates makes it harder to do our jobs and harms the customer experience. It’s just wrong.”

Shifting Sacrifices

For union leaders focused on their current members, shifting sacrifices to future coworkers sometimes looks like the least painful option, said City University of New York sociologist Ruth Milkman. Last year, for example, UPS secured an agreement with the Teamsters -- over many workers’ objections -- that created a different pay structure for weekend drivers.

Such systems can engender “tremendous resentment,” Milkman said. Newer workers bridle at getting permanently paid less for doing the same work as their peers, while veteran employees worry management will find ways to replace them with cheaper counterparts.

“In both cases, it’s a total drag, and it’s very hard to build solidarity across lines like that,” said Milkman. While that dynamic weakens unions, she said, it can also backfire for management by making employees bitter and less productive.

Wilted Lettuce

For now, Stop & Shop has been keeping its stores open with managers and temporary staff, but in solidarity with the strikers, many unionized truck drivers are refusing to cross the picket line to make deliveries.

Politicians are paying attention too. A week before Biden’s planned visit, Massachusetts Senator and 2020 Presidential candidate Elizabeth Warren brought doughnuts and coffee to picketers in Somerville, Mass. Other Democratic presidential candidates, including Bernie Sanders, Kamala Harris, Kirsten Gillibrand, Julian Castro and Cory Booker have also declared support for the strikers on social media.

Many customers seem to be heeding the workers’ call to keep away ahead of Easter, traditionally the third-biggest week of the year for supermarket sales, according to Bloomberg Intelligence.

A store in South Boston was quiet Tuesday, with a pair of cashiers on duty and just a handful of shoppers. The produce section was nearly empty, with just a few heads of wilted organic lettuce on display. The beef and poultry departments were blank, cool white rows, refrigerating pretty much nothing.

Stop & Shop strikers say that even if the company agrees to preserve their own benefits, they’re prepared to keep picketing until management abandons its two-tier proposal.

“We should have stood up against this company a very long time ago,” said Richard Libby, an employee at a store in Worcester, Massachusetts, and a union shop steward. “I’m tired of watching the new people, for lack of a better term, getting screwed.”

©2019 Bloomberg L.P.