Fred Meyer settles grocery strike

Discount Store News, Dec 5, 1994

PORTLAND, ORE. -- Striking meat cutters and grocery clerks at Fred Meyer have accepted a new three-year contract and returned to work--but not before their three-month strike produced a third quarter net loss of an estimated 90 cents to 95 cents per share for the supercenter operator.

Fred Meyer announced that it will take a one-time charge of $16 million, equal to 35 cents per share, to exit the Northern California market, selling three land parcels and its 190,000-sq.-ft. supercenter in Chico, Calif. It will keep, however, two mall jewelry specialty stores. Fred Meyer will continue to operate the Chico store until it can find a buyer.

Some 2,400 striking meat cutters and grocery clerks agreed on a new contract that gives workers the right to claim extra working hours if they are assigned to a junior worker. Their union, United Food and Commercial Workers, had been pressuring for a guaranteed right to have at least 60% of its jobs made full-time, compared to a Fred Meyer figure of 41%. The UFCW lost in getting any guarantee on full-time jobs.

But the UFCW won on a three-year contract, whereas Fred Meyer had been insisting on a five-year pact.

The food workers' acceptance paved the way for some 900 Teamsters to return to work at the Fred Meyer distribution center at Clackamas, Ore. And it also means about 800 general merchandise clerks, the remainder of 1,500 who had walked out, returned to work at 26 Fred Meyer supercenters in the Portland market.

Teamsters had accepted their own new contracts a week earlier, but they were honoring a picket line that the United Food and Commercial Workers had thrown up at the Clackamas DC.

At one time, about 1,150 Teamsters had been out on strike, including some 250 clerical workers at Fred Meyer headquarters.

Now that the UFCW has agreed on a new contract, along with four separate Teamsters locals that settled earlier, only one minor strike remains unsettled, the walkout of about 100 workers in the Fred Meyer store in Coos Bay, Ore.

At one point, a total of about 5,200 Fred Meyer workers were off the job in August, yet the chain kept all stores and the Clackamas DC open by hiring replacements, transferring employees and bringing in management personnel. In an exception, however, Fred Meyer had to shut the bakery and dairy processing plant operating at the DC and turn to outside sources to supply its stores.

The Portland strike involved all 126 unionized supermarkets in the Portland and Vancouver, Wash., area, but the UFCW picketed only Fred Meyer stores. That resulted in a 35% to 40% decline in sales for Fred Meyer in the Portland market, president Robert Miller said in announcing the strike loss estimate.

Despite the strike, Fred Meyer intends to open six more supercenters in 1995, five of which already are under construction, and remodel 18 others. Growth over the next five years will specifically focus on Washington, Utah, Idaho and Oregon.

Out of a store count of 131, 83 are supercenters with food and 18 are full-line general merchandise stores. The balance are specialty stores, including 25 mall jewelry stores and a handful of apparel specialty stores.