The Raley’s Strike and Beyond


In 1914, Henry Ford paid its workers an unheard of salary of $5.oo dollars  a day.    At the time the average wage was less than $2.50. per day.   The reasoning behind the  high wages so that the workers could afford the car they were building.       In  China, most of the workers can’t afford most of the good they build for American, British and Japanese companies.

For the first time in its 77 year history, Raley’s is on strike.      Raley’s headquartered  in West Sacramento has 130 stores in Northern California and Nevada.  Raley’s Inc. (80 Raley’s supermarkets,22 Nob Hill Food Stores, 20 Bel Air Markets, 8 Food Source Stores)     Last week and estimated  5000 Raley’s, and Nob Hill  Food workers walked off the Job.

Raley’s is considered one of the best supermarkets  in America by the non profit Consumer Report magazine. The issue is wages. benefits and premium pay on Sundays and holidays    A proposal to make changes in the workers’ health plan –premium pay  and eliminating coverage for Medicare-eligible retirees – became a huge sticking points.

The Wal Mart Effect

Raley’s says its losing money, some in the industry says as many a third  of its store are under performing     This isn’t limited to Raley’s other large traditional supermarkets are losing money in Sacramento and other parts of the country.        In the last 6 years Wal Mart opened several Wal Mart Super centers in the Sacramento Area,  in the last three years Wal Mart began  adding fresh food to their standard stores   The nations #3 retailer Target began adding fresh food to  to many of their existing stores in the Sacramento.  Last September, Wal Mart opened  five  Neighborhood Markets in Sacramento, unlike traditional Wal Mart stores, Wal Mart rent space in existing building.  Wal Mart plans to open 500 Neighborhood Market stores nationally by 2016.

Unlike Raley’s, Save Mart and Safeway, Wal Mart and Target are non-union stores.   Wages at these stores are considerably lower than Raley’s as are the benefit packages  The  average wage at a Sacramento area  Walmart food market is $23,000  which is less than what an entry level bagging clerk earns at Raley’s or Safeway.     Walmart employees, unlike their Save Mart counterparts have fewer medical options on’s are very limited and often requires extraordinarily high deductibles and or  co-pays .  Conversely, due to the lower earnings few  Wal Mart employees can purchase homes,due to high deductibles  are more likely to visit area  emergency rooms.

Risks for Both Sides

Raley’s is Sacramento’s store.  Many loyal customers won’t cross the picket line.   A long strike could mean the store loses permanently  loses customers.    The timing for the strike couldn’t be worse.  The holiday season is generally the most profitable season for grocers . Some industry experts believe the strike is costing Raley’s nearly 3 million dollars a day.

Beyond the Strike-Writing on the Wall

After both sides kiss and make up Raley’s will close stores in the Sacramento Area, as will Save Mart, and Safeway in next year and beyond.   Nearly every grocer within three miles radius  of a Wal Mart store has seen a significant drop in sales.    The industry will have to reinvent itself in this Wal-Mart/Discount Store era.   Safeway(the nations #10 retailer) has begun to make changes, Raley’s is the smallest of the three will need to make major changes  to stay competitive.   New Stores will be smaller in the urban markets.  With other retailers entering the market notably Great Britain’s  Tesco (one of the largest retailers  in the world ) entering the Sacramento market with its Fresh and Easy stores, the large chains will need creativity and nimbleness to be competitive.

CityFella

 

 

Published by CityFella

Big city fella, Born and Raised in the San Francisco Bay Area. Lived in New York (a part time New Yorker) for three years . I have lived in the Sacramento area since 1993. When I first moved here, I hated it. Initially found the city too conservative for my tastes. A great place to raise children however too few options for adults . The city has grown up, there is much to do here. The city suffers from low self esteem in my opinion, locals have few positive words to say about their hometown. visitors and transplants are amazed at what they find here. From, the grand old homes in Alkali Flats, and the huge trees in midtown, there are many surprises in Sacramento. Theater is alive is this area . And finally ,there is a nightlife... In.downtown midtown, for the young and not so young. My Criticism is with local government. There is a shortage of visionaries in city hall. Sacramento has long relied on the state, feds and real estate for revenue. Like many cities in America,Downtown Sacramento was the hub of activity in the area. as the population moved to the suburbs and retail followed. The city has spent millions to revive downtown. Today less than ten thousand people live downtown. No one at city hall could connect the dots. Population-Retail. Business says Sacramento is challenging and many corporations have chosen to set up operations outside the cities limits. There is vision in the burbs. Sacramento has bones, there are many good pieces here, leaders seem unable or unwilling to put those pieces together into. Rant aside, I love it here. From the trees to the rivers. But its the people here that move me. Sacramento is one of the most integrated cities in America. I find I'm welcome everywhere. The spices work in this city of nearly 500,000 and for the most part these spices blend well together. From Ukrainians to Hispanics and a sizable gay community, all the spices seem to work well here. I frequently travel and occasionally I will venture into a city with huge racial borders, where its unsafe to visit after certain hours. I haven't found it here. I cant imagine living in a community where there is one hue or one spice. I love the big trees, Temple Coffee House, the Alhambra Safeway, Zelda's Pizza, Bicyclist in Midtown, The Mother Lode Saloon, Crest Theater, and the Rivers. I could go on and I might. Sacramento is home.

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