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Even as there is speculation in the media that some progress is being made in the Southern California labor talks between the United Food and Commercial Workers (UFCW) and the region’s three major supermarket chains, the Los Angeles Times this morning weighs in with a long piece analyzing how things have gotten this bad yet again – only three years after a strike/lockout roiled the marketplace.

“How did we get here again, people on all sides of the dispute ask. The answers lie in the last strike and what has evolved since then.”

The Times continues, “The grocery business in Southern California is more competitive than ever. Workers say that they got a bum deal in the last settlement and that wages are increasingly hard to live on. And rising healthcare costs are alarming both employers and workers.

“All of these concerns have come together in the high-anxiety caldron of collective bargaining — a little more than three years after an acrimonious 141-day strike and lockout rattled workers, shoppers and retailers across the Southland.”

The Times notes that things have not gone well for the big three since the last strike: “Five years ago, Ralphs, Vons and Albertsons controlled nearly 57% of supermarket shopping in Los Angeles County…Now the big three grocers have barely a 49% share of that spending….Meanwhile, business surged at rivals not part of the labor battle. They now have nearly 27% of the market, up more than 6 percentage points from before the strike. (Those figures do not include membership warehouse stores such as Costco Wholesale Corp. or the Sam's Club division of Wal-Mart Stores Inc.)”

Since the last strike, competitors such as Trader Joe’s and Whole Foods have become even more formidable, and the Times notes that the entry of Tesco into the market later this year raises the stakes even more.
KC's View:
The interesting thing is that the workers, union representatives and supermarket executives interviewed by the Times all say that they don’t want a strike/lockout, and that if one happens, it will be far shorter than the one three years ago.

And yet, they all seem to be at the precipice together.

It seems to us that there needs to be another question asked, other than whether there will be a strike or lockout. And that is this: Will it be a meaningful settlement with positive long-term implications for all sides, or will it be a band-aid that will get them through another three years?