My turn: Raley’s the winner in Raley’s vs. labor

By Kevin Weber, Raley’s Store Director

When Thomas Raley opened his first store in Placerville in 1935 as a drive-in market, it was one of many firsts. He pioneered the first pre-packaged meat department. He built the first side-by-side grocery and drug store. And Tom was the first to introduce a natural foods department.

During the next seven decades, Raley’s grew to become the dominant supermarket operator in the Sacramento area. Its growth continued throughout Northern California and into Nevada with more than 100 stores and 13,000 employees.

Times were good, and sometimes very good. But when the current economic downturn hit in 2007, no business, including Raley’s, was immune to the long-term impact it would have. Many businesses were intent to ride it out, others could not and closed. With a strong financial history, Raley’s endured the economic turbulence as best as possible, but there came the time when black went to red on the financials.

That’s the time when all costs were examined: Operations, sales, distribution, food costs, executive salaries and the cost of labor. Labor is where significant cost savings could be made because their unionized employees were earning higher wages and had better benefits than their union counterparts at other grocery chains such as Safeway and Save Mart.

It was time to “sharpen the pencil” and engage in some straight talk with the unions. After 15 months of negotiations — meeting sometimes daily with the unions — both sides hit an impasse.

Another first in the 77-year history of the company was the nine-day employee strike in November. The out-of-touch union leadership was intent on protecting its own self-interests. The villains here brought in hundreds of union employees from other stores to create an impact.

Raley’s invited the union to the bargaining table once again and after many days and nights of marathon negotiations, a deal was reached. The strike ended, just days before the week of Thanksgiving — one of the busiest times for grocery stores. And all the union members got their jobs back.

What people don’t realize is that even though the employees are back at work, customers may not be back shopping. If recovery takes too long, layoffs can loom for the very employees who were striking and contesting wages and benefits. If business doesn’t recover, that’s one less union employee to negotiate for, and no one likes cost savings to come in this way.

Despite its economic woes, Raley’s has been steadfast in its commitment to the community. The list of community, civic and charitable organizations is long as it is wide — from the East Bay to Nevada and from Chico to Modesto — and it serves multiple levels of the community:  The environment, education, families, youth programs, the elderly and more. One of its most successful endeavors is the Food for Families program that has raised $27 million and 17 million pounds of food for more than 72 local food banks. Right now, Raley’s will double all customer donations.

El Dorado County — the El Dorado Hills Library, El Dorado Hills Community Services, Hands for Hope, El Dorado High School music department and the Food Bank of El Dorado County — have been the beneficiaries of Raley’s generosity many times over. In this season of thanks, we can be thankful to have such a wonderful community partner and a fine place to shop for food, the Raley’s Family of Fine Stores.

Kevin Weber is Raley’s store director.