Grocers: Wal-Mart Playing Part In Grocery Strike

Grocery Stores Say Cuts Needed To Compete With Wal-Mart

October 22, 2003

SAN DIEGO -- Even though their workers are not on the picket line, Wal-Mart is playing a big part in the grocery strike, 10News reported.

Managers at Vons, Ralphs and Albertsons say they need to cut costs in order to compete with nonunion megastores, like Wal-Mart.

There are 1,500 Wal-Mart stores in the United States. The company also has 1,200 superstores that sell groceries and plans to put 40 more in California over the next four years.

Wal-Mart pays its employees half of what union workers receive and is heavily criticized for its benefits practices, according to analyst Dennis Brewster said.

"One of the games being played at places like Wal-Mart (is) they drop workers from full-time to part-time to avoid health insurance," Rep. Dick Gephardt, of Missouri, said.

Vons, Ralphs, and Albertsons representatives say lower business costs at Wal-Mart make it hard for regular stores to compete. On top of that, Wal-Mart is so big that it can make demands of suppliers that other stores cannot touch.

"It becomes their way or the highway, there's no in-between. So again, that drives down the margins, puts pressure on the costs and puts pressure on the competitors," Brewster said.

He said no matter how the strike ends, the future of regular grocery stores may really depend on where customers choose to go. Even those who reluctantly shop at Wal-Mart admit it's hard to pass up the best deal in town.

"I think they've ruined small towns in America, but it wouldn't bother me if they ruined Vons, Ralphs and Albertsons," Wal-Mart customer Mike Ward said.

A Wal-Mart spokesperson in San Diego says the chain cuts costs by being more efficient than regular grocery stores. In just 10 years, it's become the biggest player in the grocery business, with yearly sales of

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