UFCW Local Unions from Stop the Merger Coalition Oppose Kroger’s Wall Street Giveaway

Press Release

UFCW Locals 7, 324, 770, 1564 and 3000
For Immediate Release: December 13, 2024 - 9 AM ET/6 AM PT
Contact: Tom Geiger, UFCW 3000, 206-604-3421

UFCW Local Unions from Stop the Merger Coalition Oppose Kroger’s Wall Street Giveaway, Call On Board of Directors to Immediately Replace CEO Rodney McMullen

Seattle, WA - A day after failing in its bid to merge with Albertsons and dominate the traditional supermarket industry, Kroger abruptly announced a massive giveaway to shareholders—a $7.5 billion stock buyback, $5 billion of which is slated to be paid out on an accelerated timetable. The massive shareholder payout towers above the commitments the company had promised to reduce prices for consumers and to invest in wages during the recent merger fight. Flip-flopping in less than a day’s time from a strategy of aggressive growth through Albertson’s acquisition on Tuesday to one of dramatic downsizing through shedding $7.5 billion on Wednesday should be seen for what it seems to be - an attempt to buy shareholders’ mercy through a short-term boost to the stock price in order to save CEO Rodney McMullen’s job.

“At a time when our stores need significant investments in staffing, repairs and remodels and our customers need relief from high prices, it is outrageous that Rodney McMullen would try to distract attention from his multiple failures as CEO by announcing a massive one-time giveaway to shareholders,” said Kim Cordova, President of UFCW Local 7 in Colorado and Wyoming.

During the recent three trials to block the merger, Kroger officials repeatedly expressed concern that rising competition from Amazon, Walmart and other nontraditional retailers represented an “existential” threat to Kroger’s market share. Within hours of that merger’s failure, it appears that Mr. McMullen’s first substantive action—apart from deciding to sue Albertsons—is to fleece $7.5 billion from the company’s treasury instead of making investments that would build market share. This $7.5 billion is on top the nearly $1 billion the Company already wasted on the failed merger. Apparently, in McMullen’s view, the threats to Kroger’s survival are not so great that the company needs these resources.

What could a competent CEO do with $7.5 billion? At the most basic level, these funds could be used to: 1) invest in lower prices for consumers, making Kroger more price competitive; 2) invest in higher wages and more staffing to reduce turnover; 3) remedy chronically empty shelves; and, 4) provide better customer service. The $7.5 billion in share buybacks announced Wednesday are approximately 10 times the value of the promised investments in price reductions the company had said it would make if the merger were approved. The Company made a similar billion-dollar commitment to invest in wages. Workers know all too well just how badly needed these additional wages and hours are for the stores’ operations, and how they would allow the company to grow its market share.

What else could a competent executive do to grow market share? They could do what Amazon, Walmart, Costco and Trader Joe’s have done: build new stores. Those other retailers have consistently grown their grocery store count each year over the past decade, but there are fewer Kroger stores today than there were in January of 2016. How many new Kroger stores could $7.5 billion buy? Based on an average pre-tax cost of $35 million per store, Kroger could build 280 new combination stores (such as Ralphs, King Soopers or QFC) each with an average square footage of 71,000 sq ft, for a total of approximately 20 million new square feet—the equivalent of over 1,300 Trader Joe’s stores, about 2.2 times as many Trader Joe’s as currently exist.

What could $7.5 billion buy?
New stores: 280
Store remodels: 3,268*
Discounts per loyal household: $158.13
New FTEs: 125,691
New FTEs per store: 46
New FTE's per store for 3 yrs: 15.4
* This is actually larger than the total number of stores currently operated by Kroger.

“These stores are part of our community—millions of consumers shop there for their families' food, and hundreds of thousands of union members work there. These billions could be used to improve our food supply, reduce prices, reduce food deserts and more,” said Kathy Finn, President of UFCW 770 in Southern California. “That money is not a personal piggy bank that Rodney McMullen can raid in order to save his job.”

“As the president of a local union that represents 11,700 Kroger workers, I don’t take lightly the decision to call for the replacement of the company’s CEO, but Rodney McMullen has mismanaged this company so badly there is no other way forward,” said Faye Guenther, President of UFCW 3000 in Washington State. “It was under his leadership that the company decided to attack its union members by cutting staffing by double-digit percentages, it was under his leadership that the decision was made to invest in the automated Ocado warehouse boondoggle, and it was under his leadership that both companies wasted the last two years and nearly $1 billion pursuing a doomed merger. It’s past time for him to go.”

Press Release: UFCW Locals issue statement in response to Kroger and Albertsons release of store divestiture list

UFCW 7, UFCW 324, UFCW 400, UFCW 770 and UFCW 3000

UFCW Locals issue statement in response to Kroger and Albertsons release of store divestiture list

July 9, 2024 – Today, a coalition of United Food & Commercial Workers local unions made the following statement after Kroger and Albertsons released to the public a specific list of stores the companies would plan to divest to C&S Wholesale Grocers if their proposed mega-merger of the two companies were approved:

“Today’s announcement changes nothing. The merger is not a done deal, far from it. We remain focused on stopping the proposed mega-merger for the same reasons we have stated since it was first announced over 20 months ago -- because we know it would harm workers, it would harm shoppers, it would harm suppliers and communities, and it is illegal. The merger proposal was rejected in January and February by the Attorneys General from the states of Colorado and Washington and the Federal Trade Commission. We applaud their actions. They have been in possession of this proposed divestiture list, made public today by the companies, for months and that did not change their opposition to the proposed merger. These legal challenges to the proposed merger are moving forward with hearings beginning at the end of July and scheduled to go through September.”

Update on Our Efforts to Protect Workers and Customers from the Proposed Kroger-Albertsons Merger/C&S Divestiture

We wanted to provide you with an update on our efforts to oppose the proposed merger between The Kroger Company (parent company of Fred Meyer and QFC) and Albertsons Companies, Inc. (parent company of Safeway, Albertsons and Haggen stores) and their proposed divestiture of stores to C&S Wholesale Grocers.

1. On Monday, January 15, Washington State Attorney General Bob Ferguson filed a lawsuit in King County, Washington court to block the proposed merger. Our UFCW 3000 endorsement of this legal action and a quote from UFCW 3000 grocery store member Yasmin Ashur who works at the Port Orchard Albertsons was part of the news coverage in the Seattle Times news article linked above and other news stories nationwide.

2. The Federal Trade Commission (FTC) is continuing its review of the proposed merger, and we continue to work closely with them. Many analysts feel it is more than likely that the FTC will challenge the merger. Our local union, in coalition with other local unions from across the United States, has provided extensive information about the proposed merger to the FTC. We remain hopeful that the FTC will also challenge the proposed merger. Both the courts and the FTC have the power to potentially block the merger from being completed.

3. Recently, Kroger and Albertsons have announced a delay to the merger timeline, until potentially as late as August. No doubt this delay is in response to both news of the lawsuit and the pressure campaign mounted by a broad swath of consumer groups, unions, farmers, ranchers, and others committed to preventing the harmful effects of this merger.

JOIN US!

All our grocery store members are invited to join us for a webinar on Tuesday, January 23. Please go to the link below to register for your preferred webinar:

MORNING MEETING:

Tuesday 1/23/24

8 AM

EVENING MEETING:

Tuesday 1/23/24

5 PM

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Additional information:

• This is far from a done deal: Kroger and Albertsons cannot sell stores to C&S Wholesale Grocers unless and until a merger were approved by regulators, and now, because of the Washington State lawsuit, the courts.

• Contrary to comments made by these companies, this proposed merger is not at all necessary. Nor does their announced divestiture plan remedy our concerns. Both Kroger and Albertsons are doing well financially and making strong profits.

• The proposed merger is really about greed. These two companies have already profited so much from the labor of grocery store workers all while often under-staffing stores and over-charging customers. Instead of investing in improved working conditions and reduced prices, they have prioritized high CEO pay, large dividends, including an Albertsons $4 Billion give away in early 2023, and massive stock buy backs.

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Keeping up the Effort to Protect Workers and Customers

Our efforts over the past year and a half, from actions at the store level, to meeting with regulators, to helping to educate the public and generate hundreds of TV, radio and newspaper stories across the nation, have and continue to have an impact. We can’t let up now. The proposed Kroger-Albertsons merger would no doubt be disastrous for consumers in the form of higher prices, for workers in the form of lost jobs, lower wages, and crippling losses to pension and health benefit plans, for farmers and ranchers who will lose a major buyer of their products,  and for thousands of Americans who would find themselves living in food and drug-store deserts without adequate access to everyday necessities. If you haven’t done so already, please tell the FTC and you can also write to Washington’s Attorney General to thank him for his recent lawsuit and let him know why you oppose the proposed merger.

Grocery East Employer wage proposal way off the mark!

Our Union Member Bargaining Committee met again this week. We continue to fight for wages that respect our work, maintaining and improving our healthcare, and improvements to our pension. While we know that cost of living is skyrocketing in Spokane and across the region, the Employer representative continued to argue that wages should remain lower than other grocery store wages in the State. We have a long way to go to get the wages and benefits we deserve.

However, we did reach several important Tentative Agreements:  

• Safeway contributions of $0.03/hour to secure our retirement funding. 

• Improved vacation accruals. We won vacation accruals based off the average of hours worked in the previous 12 months. This will help ensure that no worker gets less vacation per week than they normally work per week.  

• Aligned notice of technological changes in the store with other UFCW 3000 grocery store contracts.  

• Greater scheduling notice so people can plan their lives, changing initial notice from Thursday to Tuesday 6 pm in Safeway/Albertsons.  

While we made progress on many issues like vacation, retirement funding, and scheduling, we are still far apart on the most important issue- wages. 

The employer proposal included: 

• A 5-year contract—Longer than usual until we can bargain a new agreement. 

• $0.50 per year for the Journey Rates of pay—Lower than what workers got in California, Colorado, Oregon, and Western Washington. 

• Paying less in healthcare contributions and reducing our plan reserves. 

The Union Member Bargaining Committee told the employer that their opening proposal was way off the mark from what we deserve. 

Our Union Member Bargaining Comittee continued to propose common sense proposals:   

• Create Journey wage increases of multiple dollars over the life of the contract. 

• Institute one wage scale for all UFCW 3000 Eastern Washington, Oregon and Northern Idaho and the same journey wage rate across all grocery scales. 

• Gain ground on Puget Sound clerk wage rates, because cost of living is high everywhere! 

• Create raises of multiple dollars for Journey Meat Cutters over the life of the contract, a proposed dollar premium for Head Meat Cutter, and new designation of Head Butcher Block.  

• Increase the amount to $0.25 between steps so that every step sees an increase as the minimum wage increases with cost of living. 

• Reduce the length of our wage scales so our coworkers can reach the Journey rate sooner.  

• Maintain our strong healthcare plan and coverage and improve benefits without increasing employee premiums.  

• Fund our pension and increase contributions and benefits for future earned benefits.  

• Institute resort store pay premiums for Chelan, Leavenworth, Sandpoint and CDA. 

• Create premiums for Person-In-Charge pay.

• Make a quicker path to Journey for Meat Cutters that complete the Meat Apprenticeship program.  

• Ensure full back pay to date of expiration. 

 We continued to fight for non-economic proposals including: 

• Funding for workforce training so we can get the training we need and expand the meat cutters apprenticeship around the state of Washington, Oregon and Idaho.   

• Worker Severance and Retention language to ensure that, in the event of any merger or sale of the companies, the company must retain workers for a set period and compensate workers fairly if they are laid off or terminated.   

 Next bargaining dates: February 8, 9, 15 and 16.  

Join us and show our unity in fighting for a strong contract!

• SIGN A STRIKE PLEDGE CARD

• REMEMBER TO FILL OUT THE WORKER RESEARCH COMMITTEE SURVEY ABOUT THE STATE OF SAFETY AND OPERATIONS AT YOUR STORE >>

• WEAR YOUR UNION BUTTONS AT WORK!

More information:

• TO GET UPDATES AND JOIN THE FIGHT TO STOP THE MEGA-MERGER, GO TO NOGROCERYMERGER.COM

• FOR INFORMATION ABOUT YOUR HEALTH CARE PLAN WITH REHN GO TO WWW.UFCWHEALTH.COM OR CALL  800-872-8979

• IF YOU HAVE QUESTIONS ABOUT THE PENSION AND THE SOUND HEALTH AND WELLNESS TRUST CONTACT ZENITH AT SOUNDRETIRMENTTRUST.COM OR CALL 800-225-7629

PRESS RELEASE: UFCW Locals 5, 7, 324, 400, 770 and 3000

Economist Report Goes Deep into Economic Analysis of Proposed Mega Grocery Store Merger and the Harms to Working Communities

A new report issued by economist Marshall Steinbaum from the University of Utah delves into the proposed mega-merger of Kroger and Albertsons in ways that have not been fully looked at over the past year. This is important information for any people involved in researching, reporting upon, or assessing the potential impacts that such a mega-merger could have.

• Marshall Steinbaum’s new research paper, utilizing a large database of posted job offers, demonstrates that the Kroger-Albertsons merger would reduce individual worker’s bargaining power as well as their union’s power.

• The paper shows that increased employer concentration has negative effects on both earnings and work hours.

• Importantly, the paper shows that union workers receive higher pay when there are two bargaining counterparties in a given labor market as opposed to when there’s only one.

The Presidents from UFCW Locals 5, 7, 324, 400, 770, and 3000 who have been leaders in the efforts to oppose the proposed merger since it was announced over a year ago provided support for the report:

“Our ability to raise wages and standards in general depends on our ability to pit these companies against one another at the bargaining table—threaten to strike one while directing customers to the other,” the presidents called out. “If these two companies were to become just one company, that power would go away and that harms workers as well as customers.”

The full report, entitled: Evaluating the Competitive Effect of the Proposed Kroger-Albertsons Merger in Labor Markets, can be found here:  https://marshallsteinbaum.org/assets/kroger_albertsons_labor.pdf

Workers across the country have experienced the impacts described in the report:

“In our most recent contract negotiations we were able to leverage one company’s fear of losing market share to their competitor and we used that to get improvements in our contract that they wouldn’t have agreed to otherwise. That helped us get historic raises that would never happen if there were just one company,” says Rachel Fournier, a Los Angeles, CA Ralphs employee.  

“I feel this merger would only bring a negative impact on the workers. Staffing, safety, and our seat at the bargaining table would all come under threat while the corporations reap the benefits from our hardship,” echoed Rena Zagala-Fondren, a Safeway worker from Los Gatos, CA.

A Seattle area worker had an additional response. “For years we have been facing reduced staffing levels in our stores – during and after COVID. Our experience is that this would only get worse if the mega merger were allowed. We need to increase staffing, improve our schedules, and increase our leverage as unionized grocery store workers, not go the other way,” said Sam Dancy, a Front-End Manager at Kroger-owned QFC store in West Seattle, WA.

Jill Young, a just-retired grocery store worker from Grand Junction, CO stated, “I started in ’86, was on strike in ’93 and ’96. Over the years I have been injured more than a couple times and had to take off six months or more to get better. The company tried to cut the leave time to one month. Having a union that was organized, and willing and able to strike was part of what kept that benefit in place. There are young workers just starting out who deserve a future with a union workplace and the leverage I have had. This proposed merger threatens that future.”

Judy Wood, a cake decorator for Albertsons in Orange, CA raised several of her concerns, “The power we have when we bargain collectively leads to improvements in stores for both workers and customers. Workers have higher wages and stores are safer now because we have the power to fix hazards that we won through our last contract bargaining session. If this merger goes through, we will lose some of that power, putting the public in a worse position.”

Benjamin Blum, a night crew employee at Thousand Oaks, CA Ralphs added his thoughts: “Our unionized workplaces have competitive wages and benefits because workers have fought for and won them. If the proposed megamerger were approved, workers will lose leverage and be more vulnerable to a single massive employer that would bully and retaliate against workers.”

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Coalition of UFCW Local Unions Raise Concern and Caution About Kroger/Albertsons Divestiture Deal with C&S Wholesale Grocers

UFCW Locals 5, 7, 324, 400, 770, 1564, 3000

Des Moines, WA – Today, a coalition of United Food & Commercial Workers local unions in fourteen states and the District of Columbia representing more than 100,000 Kroger and Albertsons workers released the following statement regarding the announcement of a divestiture deal to sell hundreds of Kroger and Albertsons stores to C&S Wholesale Grocers:

“We have raised alarms about the proposed Kroger/Albertsons merger from the very beginning— from threats of store closures, higher prices and reduced competition, the harm to unionized workers’ ability to negotiate strong contracts, as well as the negative ripple effects lower union density would have on workers throughout the grocery industry. News of a possible deal with C&S to buy hundreds of stores as part of the proposed merger in no way reduces those alarms. Indeed, in many respects this announcement raises the level of concern for our members.

“Workers and shoppers have been seriously harmed by large-scale sell-offs in the past, orchestrated as part of a potential merger. It was only in 2015 that private equity-owned Haggen acquired a large number of stores as part of a divestiture scheme to appease antitrust regulators in the Albertsons/Safeway merger. It took less than a year for that company to go bankrupt and for Albertsons to pick up the very same stores it had divested for a fraction of what Haggen paid less than a year before, thus undoing the remedy to resolve antitrust concerns. Moreover, thousands of workers lost their jobs and were forced to start over. Today’s announcement of a nearly identical divestiture scheme is a troubling sign that history could repeat itself.”

The above statement can be attributed to the following UFCW local presidents:

John Nunes, UFCW Local 5 President
Kim Cordova, UFCW Local 7 President
Andrea Zinder, UFCW Local 324 President
Mark Federici, UFCW Local 400 President
Kathy Finn, UFCW Local 770 President
Greg Frazier, UFCW Local 1564 President
Faye Guenther, UFCW Local 3000 President

Contact: Tom Geiger, UFCW 3000, 206-604-3421

Stopping the merger update

Since the day the proposed merger of Kroger and Albertsons was announced, our local unions and members have been taking action to protect our stores, our jobs, and our customers. Keeping you all informed during this process has been a priority. Thousands of you joined our Telephone Town Hall Update in May with members from the West Coast, the East Coast, and many states in between. Since May , members, community and allies across the country have been working hard as part of the “Stop the Merger Coalition" to convince the Federal Trade Commission (FTC) that this merger is a bad deal for everyone.

Here's a brief snapshot of what we've been doing to oppose the devastating proposed merger between Kroger and Albertsons:

• Getting the Word Out: spreading the word through social media, press releases, and community events. Members have been letting everyone know why this merger is a major problem, including a threat to jobs, competition, higher prices, and how it will hurt our local communities.

• Talking to Decision-Makers: advocating with policymakers in the federal government and state Attorneys General in California, Washington, Idaho, Colorado, Washington, DC, and many more to ensure they understand our concerns. UFCW Members are testifying, sharing stories, and making sure your voices are heard where it counts. The news coverage has been massive and important in getting our stories out to the public.

• Making Our Case: UFCW members are leading the fight to show federal and state policymakers that prioritizing the impact on grocery store workers is paramount to a thriving network of grocery stores in our local communities. Without workers’ lives being a primary consideration, the ones who benefit will be the Kroger and Albertsons executives. Albertsons owners already took nearly $4 billion out of the company and now are looking to cash in with a $146 million golden parachute.

• Taking It to the Streets: promoting rallies, petitions, and meetings. We're making sure our communities know what's at stake and getting them involved. We've joined forces with other groups like farmers, community allies, and consumer advocates who are also worried about this merger. The more people we have on our side, the stronger our message becomes.

Our fight isn't over. Your involvement is crucial to our success. For example, by adding your stories of harm from past mergers, we are forcing the FTC to take notice that the people who are hurt most by these mega-mergers are the workers and the communities they serve.

Take Action

The FTC has the power to block this merger. Take action now by sending a message to the FTC to let them know we stand united in opposition to the Kroger/Albertsons merger.
 
We'll keep you posted as the fight continues. In the meantime, talk to your Union Rep or Steward to learn how you can be more involved.

UFCW 3000 Member Stories: Dalton Adams

Dalton was one of many grocry members participating in the stop the merger actions across the country recently.

Dalton Adams is a shop steward at the Downtown Bellevue QFC store and is active in many parts of our union. In January of this year, he went to Olympia to talk with Washington State Legislators about the increasing safety issues he and his coworkers face around organized retail theft and strongarm robberies. The political pressure forced Kroger and other employers to come to the table and work with our union on how to best protect workers.

Safety on the job is a big issue for Dalton and other shop stewards, last fall they came together with workplace leaders from 3 states at a Safety Summit to share stories, learn, and organize to make sure that workers are safer on the job.

Dalton and other stewards are also very concerned about what would happen to their jobs and communities if the Kroger/Albertsons mega-merger was allowed to go through. He and other grocery store workers took recently action recently across the country to inform customers of the perils of this monopoly-creating merger. Dalton asked customers and send a letter to the FTC via the No Grocery Merger Website, telling them to stop this merger from moving forward.

Dalton knows when workers organize, take action, and show solidarity with each other, what we can accomplish together is greater than what we could do alone.