The chief executive of Stater Bros. Holdings Inc., a privately owned grocery chain with 18 stores in North San Diego County and Southwest Riverside County, called on the Big Three supermarket chains to resolve differences in talks with union food workers to avoid a "devastating strike."
Jack Brown, chairman, president and chief executive of Stater Bros., downplayed the possibilities of a strike against his company while speaking on a Wednesday conference call with bondholders.
"There are no major issues that would be a factor to affect Stater Bros. As far as the Big Three and unions, we call on them to negotiate in good faith so that our industry isn't affected by the negative impact of a labor dispute," Brown said on the call.
"As for the industry, I hope they and the unions both continue to negotiate so that the employees and economy of Southern California could be spared another devastating strike."
In June, members of union locals representing Southern California grocery workers gave their negotiators the power to call for a strike if contract talks with major store chains break down ---- excluding Stater Bros., however.
In the mid-2000s, a 141-day lockout of union workers ended up costing the stores more than $1.5 billion in profit.
Brown said that Stater's talks with the United Food and Commercial Workers were proceeding on a track separate from discussions that unions are having with the Big Three, including The Vons Cos. Inc.; Ralphs Grocery Co., a subsidiary of The Kroger Co.; and Albertsons, owned by Supervalu Inc.
The Big Three chains said negotiations could affect more than 150 stores in San Diego and Riverside counties, according to store counts provided by the companies.
Also on Wednesday, the Big Three said in a prepared statement that they had offered a new health care proposal designed to move the sides closer to agreement on a three-year labor pact.
Mickey Kasparian, president of United Food & Commercial Workers Local 135, called the latest offer "comical."
"It's very disingenuous. I don't want to get into everything we are negotiating, day-in, day-out, but the proposal to deficit spend our health benefit, or trust fund, through the end of contract, will leave us no money," said Karsparian, who said that the pool of money that employers and union workers collect through deductions, would be exhausted under the latest proposal.
"We are closer to a strike than a deal," said Kasparian, whose union local represents as many as 14,000 workers in San Diego County.
He said roughly 62,000 union food workers with the major chains are scheduled to vote Aug. 19 on "whatever is on the table" at that time. "I'd say today, Aug. 10, that there is no way we can recommend that to our members. The proof is in the pudding on whether we can bridge the gap."
On the call with bondholders, Brown said his 167-store chain has stayed competitive through controlling expenses. Stater reported earlier this week that profits for its third quarter, which ended June 26, rose to $7.1 million on revenue of $939 million versus $6 million on revenue of $900 million in the same year-ago period.
"We are rowing right along in these very tough economic waters," Brown said.
In the last two years, Stater Bros. has stood its ground against 78 Walmart and Target food stores that have either converted to selling groceries or built new superstores within a five-mile radius around its own stores, according to Brown. It also has placed "forward-buys" of $20 million to $25 million in inventory for storage in its sprawling distribution center in San Bernardino.
The surplus inventory permits Stater to stay competitive, especially since some of its biggest suppliers recently notified the chain of price increases on some goods. The distribution center is a "terrific payback for us," Brown said.
By PAT MAIO
North County Times