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Raley's seeking union concessions to cut costs, become more competitive
Contract negotiations under way as Walmart Neighborhood Market nears approval

As Walmart appears to be successfully battling opposition from several unions and at least one City Councilman to its bid to open a Neighborhood Market grocery in Pleasanton, Raley's is seeking agreements from its unionized employees to cut health care and other benefits to stay competitive.

In an announcement out of Pleasanton, the UFCW Local 5 and UFCW 8-Golden State said that they have agreed to an extension of their previous labor contract with Raley's/Nob Hill while an independent review of Raley's financial status is under way.

The extension agreement with Raley's/Nob Hill averts a possible labor dispute with the company and allows time for the independent review to examine Raley's books. Save Mart, which owns the Lucky supermarket in Pleasanton, also has agreed to accept an independent review of its financial status.

The Solidarity Alliance partners, UFCW Locals 5, 8 and 648, have been negotiating a new contract with Raley's/Nob Hill, Safeway/Vons and Save Mart/Lucky since last summer. The companies are proposing cutbacks in employee health benefits, elimination of health care for retirees, reductions in take-home pay and other takeaways.

The previous contract for 62,000 unionized supermarket workers in Northern and Central California expired last October, but the workers have been covered by a series of extension agreements since then.

Union members at stores owned by Safeway and Save Mart are still covered by an ongoing extension of the previous contract. Either side may cancel this arrangement after giving notice seven days in advance.

A week ago, Raley's refused to extend its contract with Local 5, which mainly covers about 1,700 workers at the chain's Nob Hill Foods subsidiary in the Bay Area, saying it didn't think the local was serious about reaching agreement.

Although those employees continued to work under terms of the old contract, the move was an attempt by Raley's to ramp up the pressure on the local to make a deal.

Both locals reacted by accusing Raley's of behaving recklessly. Local 5 brought up the idea of scheduling a strike vote. Local 8, based in Roseville and covering thousands of workers in the Central Valley, vowed to stand in solidarity with the Bay Area local.

Meanwhile, the Sacramento Bee reported that Raley's is following through on its threat to close more stores as it tries to pressure its union workforce into accepting concessions. The West Sacramento-based grocer said it will close a Raley's in Rancho Cordova near Sacramento in mid-April, and plans to close a Nob Hill Foods store in Milpitas sometime later.

"The decision to close the stores was made following a review by the company to identify under-performing stores and determine the future sales volume," Raley's said in a statement.

Raley's closed its Nob Hill supermarket in Pleasanton two years ago. That building, located in the Meadow Plaza shopping center on Santa Rita Road near West Las Positas Boulevard, is where Walmart plans to open its Neighborhood Market, possibly this summer.