Wal-Mart, Driving Workers and Supermarkets Crazy

NYTIMES ^ | 10-19-03 | STEVEN GREENHOUSE

[Pikamax]

October 19, 2003 Wal-Mart, Driving Workers and Supermarkets Crazy By STEVEN GREENHOUSE

n February Wal-Mart will open its first grocery supercenter in California, offering everything from tires to prime meats, and that could be a blessing for middle-class consumers. The reason is simple: Wal-Mart's prices are 14 percent lower than its competitors', according to a study by the investment bank UBS Warburg.

But not everyone is rejoicing about Wal-Mart's five-year plan to open 40 supercenters in California, stores combining general merchandise and groceries that are expected to gobble up $3.2 billion in sales. California's three largest supermarket chains, Ralphs, Vons and Albertsons, are scared, and so are tens of thousands of supermarket workers whose union contracts have put them solidly in the middle class. The three grocers' fears of fierce competition from Wal-Mart and their related drive to cut costs are widely seen as the main reason behind the week-old strike by 70,000 workers at 859 supermarkets in Southern California.

Wal-Mart has already helped push more than two dozen national supermarket chains into bankruptcy over the past decade. That list includes names like Grand Union; Bruno's, once Alabama's largest supermarket chain; and Homeland Stores, formerly Oklahoma's largest. And unionized supermarket workers fear that Wal-Mart's invasion will oust them from the middle class by pulling down their wages and benefits, which, taken together, are more than 50 percent higher than those of Wal-Mart workers. At Wal-Mart, the average wage is about $8.50 an hour, compared with $13 at unionized supermarkets.

"Wal-Mart's superstores are going to have a devastating impact on California's supermarkets," said Burt Flickinger III, a retailing consultant, noting that union wages and prices are higher in California than in most of the country.

[Kay Soze]

"Now, when I go into Wal Mart, I feel like I have stepped into a third world piss pot."

I had lunch with Duan Knapp ( "Brand Mindset" MCGraw Hill NY) and we both predict Wal Mart will go the way of K Mart eventually.

But in the mean time good luck to any Safeway (Vons), Ralph’s (Kroger) or Albertsons employee.

40 super centers in So cal in the next two years and Taget Super centers on the way.

People vote with their wallets.

Even the Liberals shop non union.

I was talking with local liberal radio host here in Palm Desert his name is Gary Stone and he shops non union Stater Bros!

[Kay Soze]

"How were you saying they should get along on $8.50 an hour?"

Agreed noone but a live at home student could survive on 8.50 hr.

So why then do you shop Non Union Stater Bros?

If their labor is worth $8.50 they had better upgrade their skills beyond waving packages above a beam of infra red light.

[river rat]

Ditto!

I visited our local WalMart -- once!

I didn't hear the English language in the store - with the exception of the constantly screaming public address system, until I asked a question about a product, and the clerk didn't know enough about the product or English to answer my question....

The place was poorly lit, cluttered and unclean....
How can such a place be so successful?

San Jose, CA.....

Semper Fi

[BobS]

Have you tried Jons? I'm going there early tomottow to bu Melenesa steak and a few T-Bones!

[Radix]

What is at stake for the union is the desire by the companies to set a two-tier wage rate: new hires start at a lower starting rate of pay. Union leadership do not like this even if it leaves present employees unaffected.

I happen to know a bit about things concerning unions and companies. I work for one or the other. I won't say here which it is, but in my view, one is simply superior to the other.

I know that there is at least one company that negotiated a three tiered pay system for the Union workers. This particular company ran into a problem when jobs were plentiful, and readily available. It really got tough there for a while, when the situation changed. The management of that Company will have to think again about what is truly most best long term for the commercial enterprise. I could enunciate on many things concerning the matter.

I prefer instead to say, that it is my belief that free markets work, and capitalism is a very good thing.

I know of only one example where Communism (or similar notion) has ever worked. In that special place, it was indeed a matter of life and death.

That is the only way that communism could ever work. It would have to be about Life and Death. In one more of my opinions, I will say, that every single day, is about life and death. It seems to me that most persons are unwilling to know such concepts, or perhaps they are simply ignorant and are desirous to remain so.

I will not in this world, likely ever understand certain notions, that others hold with great intensity.

[polyiguana]

Stater Brothers is union.

I stopped shopping at the big three a few years ago when they went with the club card (Albertson's still hasn't introduced it in SoCal, but have it in Northern California). Club cards suck, and Stater's doesn't do them. Neither does Wal-Mart.

I do have to say, though, that the Super KMarts were a complete failure when they were tried in California. I can't see how Wal-Mart would be any different. Let the Super Wal-Marts in and let the market decide.

[Kay Soze]

Your right.

Stater Brothers, which is not affected by the strike because its union members are under a different UFCW pact.

But isnt shopping there "crossing the picket line"?

[nmh]

Actually Wal Mart is doing EXTREMELEY well. Have you check out a recent issue if Business Week? They are the envy of that class of store.

[BJungNan]

So why then do you shop Non Union Stater Bros?

I originally started shopping at Stater Bros becuase they do not have the club card - you know, that stupid silly card you have to carry around in your wallet to get a discount. Stater Bros does not have that.

As for union store, non-union store, I don't pay attention to that in where I shop. If I thought about it on those terms, I would shop at Stater Bros because it is an independent. There are far too few grocery companies here.

Kind of interesting to think about what has happened to the grocery industry in the Western U.S...Three companies buy up a bunch of independents. Eventually prices rise, overhead creeps up. Whamo, you have a situation ripe for someone like Walmart to come in.

[riri]

When Super Wal Mart came in to Phoenix I remember reading an article that said our grocery prices here averaged 10 percent above the natinal average. It also said that generally whenever a Super WalMart came in it forced the local food stores to lower prices to be competetive. That never happened far as I can tell.

I buy many of my packages type things at Super Walmart. It is considerably cheaper. I can think of two products off the top of my head for example. I buy six packs of Yoplait yogurt. $2.19 at Super Walmart, $2.79 at Fry's or Safeway. A box of Nutri Grain cereal bars, $2.50 at Super Walmart -up to $3.79 at other supermarkets.

I generally buy two of each a week total at WalMart 9.38 vs 13.16 at other grocery store. Or in percentages about a 40 percent savings.

Ofcourse, the pain of actually being there has to count for something.

[oceanview]

in case you haven't noticed, we have a very progressive tax system here in the US. Either Walmart can pay their healthcare out of their billions in profits, or those of us who earn more money will pay for it. Our society simply isn't going to let these people die in the gutter, and surely even you don't believe anyone making $8 can afford to pay for even a minor medical bill.

[redheadtoo]

or using the emergency room as their medical plan. so we are paying for that,

The store workers, even the part time ones, are currently getting free medical benefits. They are striking because the stores want them to contribute to their medical insurance.

Because of the rising cost of medical insurance, and the stiff competition that Wal-Mart will be bringing in a few years the stores can no longer afford to give their workers free insurance.

[oceanview]

yes, but the answer to this problem isn't a "race to the bottom", with walmart being the bottom.

we've got to be realistic about this. we have lost a huge number of jobs to offshore labor, but we create alot of service jobs in this country that are "captive". so now, when our fellow citizens are taking those jobs, should we then jump in and say they should all earn walmart wages with no health benefits?

[riri]

Did you read a thread a few weeks back that made the claim that Wal-mart actually handed out a packet to their new hires that gave some sort of instruction about federal financial assistance programs?

[oceanview]

no, i didn't catch that one. for which programs I wonder?

[riri]

With an average starting salary of $7-8 an hour for workers, as well as a full time position being approximately 28 hours a week, workers who pay for health benefits do not have much money left over to support themselves let alone their families. It is far below what is considered a living wage. According to Mr. Bowman, Wal-Mart actually encourages its employees to apply for state and federal assistance, so that they can get health benefits that the company is not providing for them. This leads to every state and federal taxpayer actually subsidizing the profits of Wal-Mart. These profits reached over 7 Billion dollars in the last fiscal year. Despite this fact, the wages and benefits are not consistent with a job that working people could support their families on.

excerpted from http://newjersey.indymedia.org

[A CA Guy]

We are talking a new market in California if they are going to open grocery markets here.

At a reported 14% lower cost with Wal Mart to the consumer, all the union shops are gone IMO!

[The Chief]

Have you tried Jons? I'm going there early tomottow to buy Melenesa steak and a few T-Bones!

I have never heard of them. Here in NY I goto Shop Rite, Stop & Shop, and Price Chopper most of the time to do my food shopping. I most of the time goto Shop Rite as it's only about 5 minutes away. There are a few more supermarkets moving into the area as well that I'm sure I will check out.

[polyiguana]

Don't trust anything on indymedia. That's worse than DU.

[riri]

Don't trust anything on indymedia. That's worse than DU

Agreed. That is why I posted the source.

However, I don't think anything in that particular paragraph can be cited as untrue.