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Workers at nearly 80 Kroger's King Soopers go on strike as talks stall

Stock MarketsJan 13, 2022 11:12AM ET
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2/2 © Reuters. FILE PHOTO: The Kroger supermarket chain's headquarters is shown in Cincinnati, Ohio, U.S., June 28, 2018. REUTERS/Lisa Baertlein/File Photo 2/2

By Siddharth Cavale and Praveen Paramasivam

(Reuters) -More than 8,000 workers at nearly 80 King Soopers stores went on strike for better wages on Wednesday as negotiations stalled, but the stores stayed open as the Kroger (NYSE:KR) Co-owned Colorado chain hired temporary staff and promoted online ordering.

The strike started at 7:00 a.m. ET and would go on for three weeks, the UFCW Local 7 union said. The striking workers are employed at King Soopers stores in the Denver metropolitan area, Boulder, Parker and Broomfield cities of Colorado, among others.

The strike is the latest of its kind in the United States, following similar demonstrations at Kellogg (NYSE:K) Co's cereal plants and Deere (NYSE:DE) & Co as rising Omicron infections and inflation push workers to demand better working conditions and higher pay.

At King Soopers, workers have sought an increase in wages of at least $6 per hour for all. The company's "last, best and final offer", made on Tuesday, proposed raises of up to $4.50 per hour based on job classification and tenure.

The proposal, which came after the union rejected two previous offers, provides for investment of $170 million in wages over the next three years, more healthcare benefits and a starting pay of $16 per hour.

That was lower than the $18 per hour King Soopers advertised for replacement workers at various locations including Denver, Evergreen, Golden and Littleton.

UFCW Local 7 President Kim Cordova said the latest offer was "worse than the previous offers in many ways", noting the new base pay was still only pennies above Denver's minimum wage and asked for more concessions.

To limit the impact of the strike, Kroger said the grocery chain has brought in workers from across the country and hired temporary staff.

It also encouraged customers to shop online by reducing delivery fees to $1 for orders worth over $35 for a limited time, while also opening up alternative "offsite" pickup locations such as a parking lot in Lakewood, Colorado.

POLITICIANS SUPPORT STRIKE

The strike has received support from politicians, including U.S. Senator Elizabeth Warren and Colorado State Senators Chris Kolker and Jessie Danielson, according to their social media comments.

"Huge grocery chains like @Kroger have made billions by jacking up consumer prices. And they're using those profits to reward executives instead of raising wages so workers can make ends meet. I stand with Kroger workers in their fight for a fair contract," Warren tweeted.

A Kroger spokesperson said wages have grown before and during the pandemic with the grocer raising its average hourly rate of pay to $16.68 from $13.66 since 2017.

While many customers have also called for a boycott of Kroger, several others worried that increased wages could lead to higher product prices.

"I've been a King Soopers customer since 1962. I join striking union workers by not shopping there until they agree to the new contract which satisfies the workers," Denver resident Mark Simmons said.

IMPLICATIONS

King Soopers operates more than 110 stores and is the No. 1 grocer in Colorado by market share, but its parent Kroger does not disclose its sales.

According to investment research firm CFRA, the King Soopers/City Market stores in Colorado accounted for about 5% of Kroger's annual sales of $132.5 billion.

The strike will affect product availability and market share as Walmart (NYSE:WMT) Inc and Albertsons Cos Inc are the top rivals in Colorado, CFRA analyst Arun Sundaram said.

"We've already been seeing more out-of-stocks across supermarkets due to worker absenteeism and supply chain constraints caused by the Omicron variant," he said.

"The strike will make it even more difficult for Kroger to replenish inventory on the shelves."

Workers at nearly 80 Kroger's King Soopers go on strike as talks stall
 

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