Kroger contends with labor strike in Portland as it defends Albertsons merger in court (2024)

PORTLAND, Ore. - Just as Kroger seeks to convince a federal judge that its proposed $25 billion takeover of rival Albertsons is good for its workers and shoppers, the local union called for a week-long strike and accused it of violating its contract.

Local 555, of the United Food and Commercial WorkersInternational Union, said the strike began Wednesday morning. The strike involves 4,500 workers walking off the job from all 28 Fred Meyer stores (a Kroger subsidiary) in the Portland metro area. Workers began to picket stores across the city and ask shoppers to take their business elsewhere, union officials said. The next bargaining session is scheduled on Thursday.

The union said the move was in response to a string of alleged unfair labor practices, including withholding information in an ongoing contract negotiation. Union officials also accused the grocer of distributing misleading information about talks and failing to make contractually required pension contribution payments. Early this month, the union sued the grocer in federal court, claiming a breach of the labor agreement in procedures for resolving contract disputes.

Awkward timing and place for Kroger strike

The strike also comes as Local 555 president, Dan Clay, is expected to be called as a witness on Wednesday during a hearing regarding Kroger’s merger proposal.

Regulators from the Federal Trade Commission are suing in the U.S. District Court for Oregon for an order to halt the deal for months while it fights to stop the merger permanently. A Kroger attorney told the court Monday such an order would effectively kill the merger. Kroger has argued the deal is good for its workers because it helps it compete more effectively against non-union retailers. Union workers and other opponents, meanwhile, fear jobs will be lost.

“(The) strike is crucial to force Fred Meyer to comply with their obligations … Our membership came out in overwhelming support of this action and the community has our back,” Clay said in a statement Tuesday evening.

Union supported merger before contract talks went sour

Local 555 was the only union chapter that initially endorsed the merger. But it withdrew that support this month as local tensions over a new contract grew.

In a statement, Todd Kammeyer, the president of Fred Meyer, said the company “respects our associates’ right to collectively bargain” and their “decision” to strike, but vowed to keep the stores open “to serve the Portland community.” He also noted preserving union jobs was why Kroger wanted to win its fight to merge with Albertsons.

“The company believes associates should have a voice in choosing what is right for them and their families,” he said. “Protecting our associates’ right to collectively bargain … is exactly what Kroger’s proposed merger with Albertsons will do. If the merger is blocked, the only winners will be non-union food retailers such as Walmart, Costco and Amazon.”

Fred Meyer president testified in merger

Meanwhile, Kammeyer testified during the hearing on Tuesday as regulators and supermarket officials analyzed and argued over whom Kroger and Albertsons compete with the most. Kammeyer and two other Kroger executives, Andrew Groff and Michael Marx, testified as well as Albertsons executive, Carl Huntington. Two other retail executives testified on Tuesday: Scott Neal of Sprouts Farmers Market and Kurt Unkelbach.

Kroger executives said the Cincinnati-based supermarket giant was focused on competing with Walmart, not traditional grocery stores. In the case, Kroger and its Albertsons are stressing rivalries with other retailers that sell groceries to downplay the impact of removing the Boise, Idaho-based grocer from the competitive landscape.

Still, regulators have revealed several internal Kroger documents that refer to Albertsons as a major competitor and that the company closely tracked price changes at its more traditional rival. On Tuesday, Kammeyer admitted Fred Meyer slashed prices on beer during Super Bowl week in 2023 after they learned local Albertsons and Safeway stores planned a steep discount on the beverage.

“It was a big move … shockingly low,” Kammeyer recalled, adding that his stores were forced to follow suit to stay competitive.

For the latest on Kroger, P&G, Fifth Third Bank and Cincinnati business, follow@alexcoolidgeon X (formerly Twitter).

This article originally appeared on Cincinnati Enquirer: Kroger workers strike in Portland as grocer defends Albertsons deal