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King Soopers union workers reject what grocery chain calls “last, best and final offer”

Thousands of unionized grocery workers went on strike Wednesday at 77 Denver-area grocery stores.

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No way, no how is Mark Simmons going to cross the King Soopers picket lines as union employees walk off the job Wednesday to protest unfair labor practices and seek better wages and work conditions. 

The Denver resident, a long-time customer who remembers shopping there with his mother and younger brothers after moving to Colorado in 1962, said he made up his mind when he first heard that workers were unhappy with how labor negotiations were going. 

“My wife and I decided to immediately stop shopping at King Soopers,” Simmons said. “We didn’t wait for the strike. I figured the sooner there is outcry and a boycott the more likely Kroger might do the right thing. (On Monday) we shopped at Safeway for the first time, except for occasional items over the years.”

A King Soopers grocery on 9th St. in Denver is seen on Jan. 11, 2022. 88 grocer locations are set to strike against Kroger on Jan 12 for alleged unfair labor practices. (Olivia Sun, The Colorado Sun)

Other supporters shared similar thoughts on social media, though with their own reasons.  One Fort Collins shopper said on Twitter that they won’t shop at King Soopers stores during the strike, but “will admit we are going today to ‘stock up’ on the things we can only get there. (Bavarian Bakery rolls).” 

Thousands of Denver-area King Soopers workers began walking off their jobs at 5 a.m. on Wednesday. There are 77 stores from Boulder to Parker participating in the three-week strike, with workers at another 10 in Colorado Springs expected to join the strike at a later date. Not all King Soopers stores in Colorado are unionized. Others not participating in the strike likely have existing union contracts.

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The affected stores remain open, said King Soopers officials on Wednesday.

“Local 7 is putting politics before people and preventing us from putting more money in our associates’ pockets,” Joe Kelley, president of King Soopers/City Market said in a statement.

On Tuesday, King Soopers said it shared its “last, best and final offer” (more details here) with the United Food and Commercial Workers Local 7. It offered higher wages — the second increase proposed in the past week. The new offer would invest $170 million over three years in wages and bonuses, boosting hourly pay for a full-time checker with five years of experience by $1.50 more this year to $21.01 an hour. The same checker’s wage would increase to $22.61 by 2024. Starting pay is $16.

King Soopers checker Maria Gonzales, right, pickets outside the grocery store in Centennial with a fellow worker on Wednesday, Jan. 12, 2022. She said she has worked for King Soopers for 38 years. (Larry Ryckman, The Colorado Sun)

“In addition to proposing an incremental investment in wages, we proposed an additional $6 million investment into associates’ health care benefits,” King Soopers spokeswoman Jessica Trowbridge said. “This investment increases our annual contributions for health care benefits by nearly $19 million. If ratified, by the end of the contract, associates’ weekly premiums would not have changed in more than 12 years.”

UFCW Local 7 Kim Cordova didn’t mince words in expressing what she thought about the latest proposal.

“The company’s ‘last, best, and final’ offer, in many ways, is worse than its previous offers,” she said in a statement. “King Soopers, despite providing certain information (on Monday night), has failed to respond to critical requests and data concerning the wage, health, and safety matters that are central to these negotiations. … We strike because it has become clear this is the only way to get what is fair, just, and equitable for the grocery workers who have risked their lives every day just by showing up to work during the pandemic.”

The new contract has been about more than just a higher wage. Hazard pay offered in the first few months of the pandemic is long gone even as COVID cases are up and workers are still getting sick. The union is demanding better health benefits that fit these new work conditions because the job has changed. 

Workers who spoke at a news conference on Monday cited other issues, like not enough hours, trouble paying rent and staffing shortages that impact customers, said Andreas Bezerril, who said he’s a head clerk in Aurora.

“We are understaffed right now and when we’re understaffed, you do not have the coverage (needed) to keep your store safe,” he said. “There’s spills on the floor that don’t get touched for hours because we’re stuck in check stands. There’s customers that are irate because the departments are closed and they take it out on us instead. … Things don’t change unless people get hurt at King Soopers. I don’t think that’s right. And unless they change that, I’m going to be picketing on Wednesday at 5 a.m.”

Corporate profits and worker wages clash

Grocery workers at The Kroger Co., which owns King Soopers, make $29,655 a year for 30-hour work weeks, according to new report by the nonprofit research firm Economic Roundtable in Los Angeles. The researchers surveyed 10,287 employees in Colorado, Southern California and the Puget Sound region of Washington and found that 70% worked part time. Two-thirds said they couldn’t afford basic expenses and of those, 39% couldn’t afford to pay for groceries. An estimated 1,931 in Colorado said they were homeless or had been homeless in the past year.

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“People who are working at Kroger part time, their biggest complaint, besides their low wages, was their schedules. From week to week and sometimes even day to day, they don’t know when they’re going to work. So they can’t have a second job even if they want it,” said Peter Dreier, a professor of politics at Occidental College in Los Angeles who worked on the report. “The bottom line is 86% of the people who work at Kroger, this is their only job. It’s their only earned income. And if they are going to be able to pay the rent and pay the groceries and all the other things, they need to make $45,760 a year.”

That’s $22 an hour. The report also recommended that Kroger double the share of workers who work full time to 60% from 30% and provide discounts of 50% for all the food in the store — not just the current 10% off Kroger brands.

Dreier, who acknowledged the report “Hungry at The Table” was funded by Colorado’s Local 7 and other Kroger unions in California and Oregon, said the unions had no influence on the findings.

“The thing people aren’t paying attention to is Kroger is doing really well. And they … made a particularly lot of money during the pandemic,” Dreier said. “They’ve given huge pay increases to top executives. The CEO makes over $22 million a year. … Their cash on hand has gone up since February 2020. It’s funny they’re sitting on that when they could be spending it to raise wages.”

Many grocery companies did well during the pandemic. According to The Food Industry Association, which counts many large grocery chains as members, 53% of meals were eaten outside the home before the pandemic. That rate reversed in the pandemic.

“People focused a lot of attention on eating at home. Children were at home for big chunks of it so they had to feed their kids not just breakfast, but lunch and dinner. That created a huge amount of demand at the store,” said Andy Harig, FIA’s vice president of tax, trade, sustainability & policy development. “In 2020, we hit about a 3% profit margin (and) 3% was about the best year we’ve ever had.”

Profit margins, which include retail food sales at grocery stores but not gasoline sales, are normally below 2%, he said. Last year, sales for the industry were up more than $100 billion. However, expenses grew, as inflation impacted food prices, stores paid employee bonuses and supply-chain problems increased the cost of transporting food.

“We’re one of the lower-margin industries in the United States,” he said. “There’s lots of competition. In most markets, there are lots of stores. And it’s expensive. The cost of goods sold is fairly high and ranges between about 65% and 70% and that tends to contribute to the lower margins overall.”

An analysis by the research firm Economic Roundtable compared the changes in worker wages with other key financial statements of The Kroger Co., which owns Kings Soopers. Adjusted for inflation, the highest-paid hourly workers saw a decline in pay while the store and CEO saw a significant increase. The Economic Roundtable’s report “Hungry at the Table” was funded by labor unions but researchers said the unions did not influence the report. (Screengrab)

Dreier said the grocery industry is always trying to obscure profits. He said his team found that net income rates tripled while sales increased 15.8%, while payroll and benefits shrank as a percentage of sales. The wage analysis of the top-paid King Soopers food clerk in Colorado between 2010 and 2020 showed a 16% increase to $19.16 an hour. Adjusted for inflation though, he said that’s a 3% reduction in pay.

“They are crying wolf,” Dreier said.

About 8,400 Colorado union workers voted to strike last week. Not all King Soopers locations are unionized, including those in Lafayette and Erie. And union contracts at other stores, such as the City Market locations, expire later this month or in February, so those stores are not part of the strike.

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Trowbridge, with King Soopers, didn’t answer a question about hiring temporary workers but said they were preparing for the strike on Tuesday. 

“In the event there is a strike, we have contingency plans in place and remain committed to being here for our associates, customers and communities providing fresh food and essential services,” she said.

The union posted on social media its “strike benefits,” which will pay full-time picketing members $160 a day with a maximum of $800 per week. For those who don’t work the picket line, but also don’t cross it, there is $100 per week in honor pay available.

This story was updated on Jan. 12, 2022 at 8 a.m. with a statement from King Soopers president Joe Kelley.