Albertsons, Pavilions, Ralphs and Vons workers authorize strike

UFCW Local 135 grocery store workers have authorized an unfair labor practice strike. 
(Photo courtesy of UFCW Local 135)

Southern California Grocery Workers Authorize Strike as Contract Talks Stall

Workers at major chains seek higher wages and better staffing while companies push back on costs

Approximately 45,000 grocery store workers across Southern California have voted overwhelmingly to authorize a strike against four major supermarket chains, setting the stage for potential disruptions to food shopping in the region this summer.

The United Food and Commercial Workers (UFCW) announced Wednesday that over 90% of its members voted to authorize their bargaining team to call for an Unfair Labor Practice strike at Albertsons, Pavilions, Ralphs and Vons stores. The authorization covers workers from Santa Barbara to San Diego, including thousands of employees at 87 stores in San Diego County alone.

Union Demands and Allegations

The workers' contracts expired March 2, and negotiations have been ongoing for four months. Union representatives say they are seeking "living wages, affordable healthcare benefits, a reliable pension and more staffing and better working conditions for a better customer experience."

"For four months, we've negotiated with Kroger and Albertsons, offering solutions to the staff shortage crisis that hurts store operations, working conditions, and customer service. The companies have dismissed our proposals and claimed that our concerns were 'anecdotal,' downplaying the real challenges we and our customers face daily," the union said in a statement.

The union has also accused the companies of unfair labor practices, alleging "unlawful surveillance, interrogation of members at actions, threats, and retaliation for union activity."

Company Responses

Both grocery chains have responded by emphasizing their commitment to continued negotiations while defending their contract offers.

"We remain actively engaged in bargaining with the union because we believe the best outcomes are achieved at the table, not through disruption," said Salvardor Ramirez, a spokesman with Kroger Co.'s Ralphs. "Our current offer reflects that commitment, including market leading wage increases for associates over the life of the agreement, and continued investment in industry-leading healthcare and a pension."

Albertsons also vowed to remain engaged with the UFCW talks. "We respect the rights of workers to engage in collective bargaining and remain committed to negotiating in good faith to reach an agreement that is fair to our employees, good for our customers, and allows our company to remain competitive," said Courtney Carranza, a spokesman with Albertsons Cos., which owns Vons and Pavilions.

According to industry reports, companies have offered "meaningful wage increases and industry-leading healthcare" but specific details of the proposals have not been disclosed.

What It Means for Shoppers

A strike authorization vote does not necessarily mean there will be a strike, and negotiations are scheduled to resume on June 25. However, if workers do walk out, Southern California shoppers could face significant disruptions.

The region's last major grocery strike occurred in 2003-2004 and lasted nearly five months, affecting thousands of families and forcing customers to seek alternatives. Since then, the grocery landscape has changed dramatically, potentially softening the impact on consumers.

Today's shoppers have more options than during the previous strike, including:

• Chain alternatives: Costco, Target, Trader Joe's, Whole Foods, Stater Brothers, Smart & Final, and Walmart
• Online delivery services: Instacart, DoorDash, Amazon Fresh, and other delivery platforms that didn't exist during the 2003 strike
• Local markets: Independent grocery stores and specialty shops

However, if employees begin to strike, it could still impact shoppers' ability to get groceries at their usual locations, potentially leading to crowding at alternative stores and possible price pressures from increased demand elsewhere.

Broader Labor Movement

The Southern California authorization is part of a larger wave of grocery worker activism across the western United States. Tens of thousands of additional union grocery workers across the country who are employed by Kroger and Albertsons also voted to authorize a strike last week, bringing over 100,000 grocery workers to the brink of a strike at the same time.

Workers in Washington state, Colorado, and other regions have also recently authorized strikes against the same parent companies, suggesting coordinated pressure on the nation's largest grocery chains.

Historical Context

Union members approved a three-year contract in 2022 after a threatened strike, including wage increases of $4.25 per hour for most workers while some classifications received higher pay raises. The current negotiations come as both companies face ongoing challenges from inflation, labor shortages, and competitive pressures in the grocery industry.

Should workers call a strike, it could create the largest grocery strike in modern history, and a major labor disruption for two of the nation's largest grocery chains this summer, their busiest season of the year.

Impact on Corporate Profits and Pricing

The labor negotiations come as both grocery chains face pressure from razor-thin profit margins that have declined in recent years, alongside significant leadership transitions. Grocery industry profit margins hit just 1.6% in 2023 — the lowest level since 1% in 2019 — as total expenses increased, according to the Food Marketing Institute.

Financial Performance and Stock Returns

Kroger reported operating profit of $912 million in the fourth quarter of 2024 with an EPS of $0.90, while achieving a return on investment (ROI) of 8.3% in its second quarter of 2024. Kroger stock has traded between $49.04 and $73.63 over the past 52 weeks, with shares currently valued around $67.69, representing a market capitalization of approximately $45 billion.

Albertsons recorded $400.6 million in net income for their third quarter, up from $361.4 million the same time last year. However, both companies continue to operate on margins that industry experts describe as extremely tight, with Albertsons showing an ROI of approximately 5.05% and trading at around $22.20 per share with a market cap of nearly $12 billion.

"Overall, a grocery store's profit margins are roughly 1% to 3%, but those numbers don't tell the full story," said Peter Zaleski, an economics professor at Villanova University. The companies argue that significant wage increases could force them to raise prices for consumers who are already dealing with inflation pressures.

Labor costs represent one of the largest expense categories for grocery retailers. Profit margins at grocery stores have always been razor thin, typically 1 to 3 percent — often the equivalent of just pennies per item sold. And if you add continual minimum wage increases, rising wholesale food expenses and heightened competition for employees, those margins get even thinner.

Leadership Turmoil and Corporate Perspectives

The strike authorization comes amid unprecedented leadership upheaval at both grocery giants, with both companies experiencing CEO transitions just months before the labor negotiations.

Kroger Leadership Change

Kroger's longtime CEO Rodney McMullen resigned in March 2025 following a board investigation into his personal conduct that was found to be "inconsistent" with company ethics policies. McMullen, who had led the company since 2014 and earned $15.6 million in compensation for fiscal 2024, was replaced by interim CEO Ronald Sargent, the former Staples CEO and Kroger board member.

Sargent, who is receiving $8.3 million annually ($4.35 million salary plus $4 million in stock grants), has indicated his commitment to maintaining operational stability during the transition. "As interim CEO, I am committed to working alongside our proven and experienced management team and dedicated associates to ensure Kroger continues providing exceptional value for our customers," Sargent stated.

Importantly, Kroger's regulatory filings acknowledge that the company's financial goals "may be affected by: labor negotiations; potential work stoppages; changes in the unemployment rate; pressures in the labor market," highlighting management's awareness of the current labor challenges.

Albertsons Leadership Transition

Similarly, Albertsons CEO Vivek Sankaran announced his planned retirement effective May 1, 2025, with Chief Operations Officer Susan Morris set to take over. Sankaran, who earned $15.1 million in total compensation for 2023, led the company through the failed Kroger merger attempt and has publicly acknowledged the company's pricing challenges.

During court testimony regarding the proposed merger, Sankaran admitted under oath that "Albertsons' prices are higher than those of its competitors," citing scale disadvantages compared to larger rivals like Walmart and even Kroger. "Kroger has a better cost structure than us," he said. "They are bigger than us. Scale allows for better pricing."

Morris, who will become CEO during the labor negotiations, brings nearly four decades of experience at Albertsons, starting at a customer service desk in Denver and working her way up through operations. Her perspective on labor relations will be crucial as she takes over during these contentious negotiations.

The strike authorization comes amid a broader trend toward automation in the grocery industry, with the global self-checkout systems market size estimated at USD 4.91 billion in 2024 and expected to grow at a CAGR of 13.6% from 2025 to 2030.

Analysts estimate that self-checkout installations around the globe increased from 190,000 in 2013 to 1.2 million in 2025, with this year seeing a record 12% global increase in installations. The technology was designed primarily to lower stores' labor expenses, reducing cashier costs by as much as 66% according to a 1988 article in the Miami Herald.

However, labor advocates argue that self-checkout machines represent "fauxtomation" — a phenomenon where companies use technology to transfer paid labor to unpaid labor rather than true automation that increases efficiency.

The union disputes suggest that accelerated automation could be one potential response to higher labor costs. McKinsey research found that demand for physical and manual skills at retail — for tasks such as scanning items at checkout and restocking shelves — will decline by 17% between 2016 and 2030, while higher-level cognitive skills will increase 8%.

Some states are already responding to these trends. Washington lawmakers have proposed regulations for self-checkout machines in grocery stores over 15,000 square feet, with supporters saying unchecked automation and chronic understaffing puts workers and customers at risk.

The final scheduled bargaining sessions are set for June 25, 26, and 27, when both sides will attempt to reach an agreement and avoid a work stoppage that could affect millions of Southern California residents during the peak summer shopping season.

Sidebar: Your Shopping Alternatives

Major Chain Alternatives

Costco

• URL: https://www.costco.com
• Labor Situation: Starting wages over $30/hour at top scale, with only 8% unionized (Teamsters) but high benefits for all workers. Employees pay only 12% of health care premiums vs 40%+ at competitors, with over 80% having health coverage
• Pricing: Generally lower due to bulk purchasing and membership model. Along with Kroger, Albertsons, and Walmart, accounts for two-thirds of all grocery sales in the US What is the reason for the price difference between groceries at Target and Walmart compared to Aldi and Trader Joe's? - Quora

Walmart

• URL: https://www.walmart.com
• Labor Situation: Average $15.25/hour for full-time associates, largely non-union What Grocery Store Pays the Best in 2025 (plus benefits) - The Grocery Store Guy

·  . Opening of Walmart stores typically lowers local retail wages by 0.5-0.9%

·  Pricing: Albertsons CEO admitted "Walmart is the price setter in the market typically...they by far the lowest price in the market" Grocery Workers VS Goliath - In These Times

Target

• URL: https://www.target.com
• Labor Situation: Raised minimum wage to $13/hour (as of 2019), planning increases to $15/hour Who Owns Your Grocery Store? — Grocery Story: The Promise of Food Co-ops in the Age of Grocery Giants

·  . Non-union

·  Pricing: Generally competitive with mid-range pricing, higher than Walmart but lower than specialty stores blogTOYelp

Trader Joe's

• URL: https://www.traderjoes.com
• Labor Situation: Only 4 of 530+ stores unionized as of 2023, with union demands for $30/hour starting wage Stater Bros. - Wikipedia

. Accused of union busting, challenges NLRB constitutionality Aldi, Trader Joe's, Target or Walmart: where a set of basic ...

·  Pricing: Most expensive of major alternatives tested, with average prices significantly higher than Walmart/Target Winco Foods Ontario, CA - Last Updated June 2025 - Yelp

Whole Foods

• URL: https://www.wholefoodsmarket.com
• Labor Situation: First store unionized in Philadelphia in 2025 Four Reasons to Choose Costco over Wal-Mart, Sam’s Club and the Rest

• . Starting wage $15/hour, generally non-union but premium benefits
• Pricing: Premium pricing, significantly higher than conventional grocers

Regional Alternatives

Stater Brothers

• URL: https://www.staterbros.com
• Labor Situation: 90% unionized workforce, CEO says "I'm very proud that 90% of our workforce is unionized" Costco raises nonunion pay to over $30 an hour as union deadline looms - The Washington Post

. Represented by UFCW in ongoing negotiations Walmart Will Never Be Costco

·  Pricing: Higher prices due to union wages, CEO notes they "have to charge more for our products" compared to non-union competitors Costco raises nonunion pay to over $30 an hour as union deadline looms - The Washington Post

Smart & Final

• URL: https://www.smartandfinal.com
• Labor Situation: Locked in battle with Teamsters union over warehouse closures and wage cuts of $10-12/hour A Downward Push: The Impact of Wal-Mart Stores on Retail Wages and Benefits - UC Berkeley Labor Center

• . Mexican-owned with ongoing labor disputes
• Pricing: Warehouse-style pricing, generally competitive

Grocery Outlet Bargain Market

• URL: https://www.groceryoutlet.com
• Labor Situation: Limited union presence, employee-owned model at some locations
• Pricing: Discount pricing model, described as "bargain market"

Key Labor & Pricing Insights

Union vs Non-Union Impact: Unionized supermarket workers earn 27% more than non-union counterparts, compared to just 6% premium in general merchandise

Competitive Pressure: 65% of food retailers in Southern California are now non-union vs just 10% twenty-five years ago Costco raises nonunion pay to over $30 an hour as union deadline looms - The Washington Post, creating downward pressure on unionized stores' pricing

Consumer Options: The wide range of alternatives provides Southern California shoppers with multiple choices during potential strikes, from discount options (Walmart, Grocery Outlet) to premium alternatives (Whole Foods, Trader Joe's) and membership models (Costco).

This diverse competitive landscape means that unlike previous strikes, consumers have significantly more alternatives available, potentially reducing the economic pressure on striking workers while providing shoppers with continued access to groceries.

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