‘Big box’ competition causing store closings, union says

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Roundy’s Supermarkets will close three Rainbow Foods grocery stores in Twin Cities suburbs, the company announced. All three of the stores employ United Food and Commercial Workers (UFCW) members.

According to a statement released by Roundy’s, Rainbow Foods’ parent company, stores at 1801 County Road 42 West in Burnsville, 1643 County Road B2 in Roseville and 1698 Vierling Drive in Shakopee “no longer fit within the future plans for Rainbow’s retail store network.”

Roundy’s said it will offer employees affected by the closings “the opportunity to work at other Rainbow stores following the closings, consistent with the company’s collective bargaining agreements.”

The company had not finalized closing dates at press time, but Bernie Hesse, director of special projects for UFCW Local 789, whose members work at the Rainbow Foods in Roseville, said the closings would come quickly.

“In under 90 days they’ll have that thing cleared out,” Hesse said of the Roseville operation.

While Hesse believes the talk of finding work within the company for displaced employees is genuine, he doubts Rainbow will be able to absorb everyone affected.

“The industry is very flat right now,” Hesse said. “While we’re hoping that we can place as many (employees) as possible within the chain, we also know there is a finite amount of positions.

“We’ll try to find them jobs within the other union shops we have, like Cub, Lunds and Byerly’s or Cooper’s. If we have to, we’ll get some worker-retraining money, and see if there are some buyouts available from the company.”

Big-box competition
Regardless of whether or not employees affected by Rainbow’s closings will be able to step into new positions immediately, the long-term viability of the stores into which they are placed remains in doubt.

“I think this is going to be the start of many (closings),” Hesse said. “There’s a lot of volatility in the industry right now. We’re very concerned.”

The cause of Hesse’s concern are big-box, non-union grocers like SuperTarget and Wal-Mart Supercenter, which are expanding throughout the metro area. The big-box stores hire non-union workers, undercutting union shops with lower prices and, according to Hesse, creating an uneven playing field in the grocery industry.

“These supercenters have a devastating effect on organized grocery stores,” Hesse added. “Within six to 18 months of when a supercenter comes in, it takes out at least one grocery store, whether it’s a union shop or not. That’s what we’ve seen in trends both nationally and in the region.”

Indeed, UFCW Local 789 members have seen firsthand the effect SuperTarget, which opened about one mile away from the Rainbow Foods in Roseville last October, can have on unionized competitors. Hesse estimated that since SuperTarget opened, Rainbow’s weekly sales have fallen by 50 percent, from about $400,000 per week to $200,000.

“I tell people that SuperTarget is the No. 1 enemy, and Wal-Mart is No. 2,” Hesse said.

No “silver bullet”
While the soon-to-be-displaced workers at the Rainbow in Roseville are Local 789’s immediate concern, Hesse said the union will continue to seek a long-term solution to the imbalance spreading throughout the grocery industry. In part, that solution involves holding accountable politicians who eased SuperTarget’s entry into the Roseville market.

“Our elected officials have let us down by continually giving in to Target, by subsidizing them and allowing for some suspect zoning,” Hesse said. “The complete burden isn’t on them, but that doesn’t excuse it.”

Primarily, though, stabilizing the grocery industry for union shops means organizing workers at big-box stores.

“There’s no silver bullet,” Hesse said. “We’ve got to figure out a strategy to organize these places. We’ve got these supercenters moving into the metro area, and we have not organized or made the playing field level yet.

“There’s just huge wage disparities, and we’re done with concessions, with racing to the bottom. We’ve got to lift everybody up, not sink down to their level.”

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