US supermarket group Raley’s Family of Fine Stores has reached an agreement with the United Food and Commercial Workers union that will end a nine-day strike shortly before the crucial Thanksgiving trading period.
The agreement, which will not be made public until it is ratified by UFCW members, ends 15 months of negotiations between the two sides.
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Unionised grocers are facing increasing competition from non-unionised retailers, including retail giant Wal-Mart. Non-unionised retailers are able to keep labour costs down by offering low wages and few benefits. As well as feeding through to the bottom line, the lower cost base is used to fund lower prices, which drives increased competition around price at a time when recession is influencing consumer spending patterns.
“In recent years, there has been a huge increase of more than 240 non-union retailers either opening or expanding their stores specifically to sell groceries. This, coupled with the recession and skyrocketing health care costs, created a number of issues which both the store and the union had to work through,” the company said.
Management said that the deal provided cost savings necessary “to fund our vision” and “make us more competitive” while the UFCW said that it had been successful in preserving health benefits for workers.
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By GlobalData
