Union targeting second-largest food retailer

The union that represents most of the employees of Canada’s largest food retailer, Loblaw, as well as many from third-place Metro and fourth-place Canada Safeway, has inaugurated a campaign to organize Sobeys. The United Food and Commercial Workers (UFCW) has a web site, www.unionforsobeys.ca, where it hopes to make its case and sign up Sobeys employees. Many Sobeys locations in Quebec are currently unionized; those in the rest of the country are generally not.

A report in the Globe and Mail suggests that, after its 2008 national convention, the UFCW is turning its efforts towards Sobeys to bolster both its membership and its bargaining strength within the industry. The report goes on to quote Loblaw executives who welcome the move, as it would remove the competitive disadvantage they hold of paying higher wage rates: 35% as compared to non-union stores, in the union’s estimate.

Organizing within the already heavily unionized chains is facing diminishing returns.

Sobeys has responded with a letter to employees asserting that the union simply wants to collect dues from them and stressing the good and open relationship it claims to have with employees.

The landscape in retail food began to change early in the decade when supermarkets began developing lower-cost banners to compete with an expected Wal-Mart threat. Since then, Shopper’s Drug Mart has also entered the field and now holds one per cent of the market to Wal-Mart’s five per cent. Loblaw still has 32 per cent and Sobeys 15 per cent, according to the UFCW. As the traditional base for unionized supermarket workers is eroding, the union is looking to consolidate its position by expanding to these outlets.

The saga of the UFCW’s efforts to unionize Wal-Mart does not need to be retold. Successes have been few to date and the company has been firm in its resolve (at the risk of understatement). There is no indication that the union is weakening in its determination either, but the breakthrough has yet to take place.

The Sobeys campaign, if successful, would be less important symbolically than a Wal-Mart victory and, despite Sobeys having three times the market share, would be perhaps on par practically. The threat to the leading food retailers in Canada comes from the Wal-Mart model and not from the Sobeys model.

In the face of job cuts in the food processing industry, where the UFCW also has significant membership, retail jobs are seen as safer: ones that cannot be exported to the United States or China. Retail food, especially, is seen as largely recession-proof. Other retailers are taking a hit due to lower consumer spending, but food is not a purchase that can be avoided or delayed.

All unions have made organizing a priority in recent years and the service sector has been the target of much of this effort. It is a growing sector and one that tends to stay put. Expect growing interest in the coming months and years.