January 05, 2007 -
LONDON -- Tesco, without meaning to, has tipped off the fact that its U.S. venture will attempt to be union free, according to recent reports by the Financial Times, prompting threats from grocery unions in California to oppose the launch and development of the chain.
A union-free workforce would imitate the leading U.S. mass retailers like Wal-Mart and Target, the report stated. However, most of the workers in the traditional grocery retail industry in the United States have union representation.
The report said that Tesco has placed job ads for two senior human resources executives that will be based in the California and listed their job responsibilities to include "maintaining union-free status" and "union avoidance activities." However, Tesco told the Times that it had not yet made a decision on unionization.
The ads appeared recently online for an employee relations director, to be based in Los Angeles, and a human resources manager that will work at the planned site for the distribution center in Riverside, Calif., the report stated.
Overseas, Tesco is unionized, though labor disputes both in-store and in its distribution network are minimal, according to Anthony Ruback of Riverhead Consulting, a London-based consulting firm that recently launched a Tesco Readiness Program for U.S. manufacturers looking to benefit from Tesco's entry into the U.S.* He explained that this labor-friendly position is a result of close collaboration and cooperation with U.K. labor unions, pay rates that are near the upper level of retail industry norms, successful embedding of a committed customer service ethic in its staff and having membership available to its high proportion of part-time workers.
Ruback confirmed rumors that Tesco is aiming for a non-unionized U.S. workforce, however, could not predict which way it will ultimately turn out. "Whichever picture transpires, Tesco can be expected to do its utmost to avoid being on the receiving end of the type of actions faced by Wal-Mart. They will have studied Wal-Mart's experiences closely, and no doubt have contingencies in place to address whatever labor issues face them," he told CSNews through email. He contrasted Tesco's expected reception from U.S. labor unions with Wal-Mart's ASDA chain, which has continued to face disputes from organized labor in the U.K.
"Given the experience of the UK management team in place on the West Coast, we're confident that Tesco will bring its collaborative approach to its U.S. operation," said Ruback. "This could be yet another industry paradigm shift that their U.S. market entry heralds."
Nevertheless, early indications are that U.S. labor will not take kindly to a union-free Tesco. If the company decided to be union-free, the Los Angeles-based United Food and Commercial Workers (UFCW) grocery union "will start a drive, we will let the public know that they are not going union and we will do what we can to stop them developing stores here," Ricardo Icaza, the leader of the UFCW, told the Times.
In other Tesco news, by examining liquor license applications and planning reports, the Financial Times has uncovered more than 30 locations that have been obtained by Tesco for its U.S. stores.
The company is investigating more than 300 sites for its small grocery/convenience store format, to date, the company decided on nine sites in California, four in Nevada and 18 in Arizona, according to the Times.
Those locations are:
• Los Angeles • Redlands, Calif. • Moreno Valley, Calif. • Indio, Calif. • Upland, Calif. • Laguna Hills, Calif. • Fullerton, Calif. (to open in 2008) • Fontana, Calif. • San Diego • Las Vegas (four sites) • Phoenix (six sites) • Avondale, Ariz. • Gilbert, Ariz. (two sites) • El Mirage, Ariz. • Mesa, Ariz. (four sites) • Chandler, Ariz. (two sites) • Queen Creek, Ariz. • Scottsdale, Ariz.
*Editor's note: Ruback will participate in a session called: "How Tesco Built a Behemoth in the U.K. and Will It Work in the U.S.?" at Convenience Store News' annual Future Forum, being held March 26-28, 2007, at the Renaissance Vinoy resort in St. Petersburg, Fla. Attendance is free for retailers. For more information, contact Lois Miller at 526-868-9563 or ldmiller@optonline.net.
This year is special for Convenience Store News, as it marks the 40th year of publication, making it the longest continuously published news source for the convenience store industry.
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January 05, 2007 -
LONDON -- Tesco, without meaning to, has tipped off the fact that its U.S. venture will attempt to be union free, according to recent reports by the Financial Times, prompting threats from grocery unions in California to oppose the launch and development of the chain.
