The union representing many of the 62,000 workers at Ralphs, Vons and Albertsons supermarkets in southern California issued a required 72-hour notice of its plan to cancel its extended contract, a move that could pave the way for a strike.
The union and the supermarkets are at an impasse over healthcare coverage. Employees, who have been without a contract since it expired in March, have given the union the go-ahead to call a strike if an acceptable deal for a new contract cannot be reached.
In 2003, southern California played host to the longest work stoppage in the history of the U.S. grocery industry. That bitter, four-and-a-half-month standoff shifted more than $1 billion in sales, and the loyalty of some shoppers, to competitors.
We're ready to fight to preserve good jobs, said Rick Icaza, president of the United Food and Commercial Workers Local 770, the largest of the seven union locals representing the Southern California supermarket workers.
The union accused the supermarkets of stonewalling, being
unwilling to compromise and squeezing workers who live paycheck to paycheck.
We don't want to strike, but if they won't negotiate, we have no choice, Icaza said.
Kroger Co owns Ralphs, Safeway Inc owns Vons and Supervalu is the parent of Albertsons.
We are disappointed that union leadership decided to take this step, Supervalu spokesman Jeff Swanson told Reuters.
Swanson, speaking on behalf of Supervalu, said the two sides are still in active negotiations and have made progress during our talks this past week and a half.
We don't want a strike, and we hope to continue bargaining rather than continue to alarm our associates and our customers, Swanson said.
Representatives from Safeway and Kroger were not immediately available for comment. The three supermarket companies are negotiating as a group.
The union said grocery workers will begin final strike preparations following the 72-hour notice to cancel the contract.
Canceling the contract does not mean grocery workers will walk out in 72 hours.
After the contract is no longer in force, the union has the option to call a strike at any time. A nullified contract also would give supermarket owners the choice to lock out union workers.
Southern California workers and management side-stepped a strike in 2007, but the threat of another stoppage has anxieties running high in what many experts see as one of the most competitive grocery markets in the United States.
Unionized supermarkets like Ralphs, Vons and Albertsons have seen their Southern California market share shrink over the last few decades, contributing to a decline in the number of union retail workers.
At the same time, non-union rivals including Hispanic supermarkets, dollar stores and big players like Wal-Mart, Costco and Whole Foods Market have been on the rise.
Persistent unemployment and the weak economy have been hard on supermarkets, which operate on razor thin margins.
While Kroger has outperformed Safeway and Supervalu, analysts said supermarket profits are not growing.
I don't think the strike is in either party's interest, said Walter Stackow, senior research analyst at Manning & Napier, which holds shares in Kroger and Supervalu.