Warehouse food stores like Basics, Food Barn and Save Right say they can offer lower prices because they have fewer frills--no bagging, no special cutting-to-order in the meat department and only a limited selection of items on the shelves.
But there's another even more significant explanation for those lower prices--lower wages.
The pay difference for the 600 to 700 union workers at the 14 area warehouse stores can be as much as $1.69 an hour--roughly $3,500 a year, a difference that has won union endorsement in today's troubled job market.
The lower wage scale now is in effect at seven Grand Union Basics stores and six Safeway Food Barns in keeping with an agreement between the supermarkets and United Food and Commercial Workers Local 400, which represents about 12,000 food workers in the Washington area. Workers at Giant's new Save Right warehouse store are scheduled to vote Wednesday on a contract containing the same lower wage provisions in effect at other chain warehouse stores.
Union officials predict that workers--who now are being paid non-union wages that are even lower than the union warehouse scale--will ratify the pact despite complaints from a few Save Right employes that the the union is selling them out.
"I'm sure there are a few who see it (the contract proposal for lower wages) as a threat," said Thomas R. McNutt, president of Local 400. He said, however, that most of the workers affected by the warehouse store contract are in favor of its terms.
There is at least one notable exception to the lower warehouse pay arrangement, however.
In Baltimore, which is in a different local union jurisdiction, the Safeway Food Barn employes are paid the same as those working in other area Safeway stores under terms of a contract with Local 692 of the same union. "We asked for an exception (so that a lower wage could be imposed at the Food Barn), but it was denied," said Safeway representative Larry Johnson.
So far the Safeway Food Barn is the only warehouse operation of its kind in the Baltimore area.
Under the contract in effect at Washington area warehouse stores, the union attempted to build in safeguards against job loss or pay cuts for those already employed by the supermarkets. For example, McNutt said the Local 400 contract requires that union employes working at the supermarket prior to its conversion to a warehouse store would continue to earn their current wages and they could not be bumped to the lower scale. The lower wage scale affects only new workers hired by the warehouse stores, he said.
Those terms are supposed to apply even if the conventional supermarket is shut down for several months before re-opening as a warehouse store, he said. "They would have to keep it closed for more than a year" to avoid paying regular wages to regular employes when it re-opened, he said.
Because of the contract provisions aimed at protecting union workers on the supermarket payroll prior to conversion, it is possible for two workers doing the same job at the same store to be paid different wages. The difference in the two wage scales varies, according to the position. A clerk at a warehouse store is paid $8 an hour, compared to the regular supermarket clerk's $9.69 an hour.
McNutt said that the gap in wages for warehouse workers and conventional chain store workers can be narrowed during future contract negotiations. Meantime, the contract arrangement preserves union jobs and reinforces rather than erodes the union's position in the Washington area, he said. He said that hundreds of union jobs would have been lost if the chains had closed their borderline stores rather than convert them to warehouse operations.
Grand Union officials first proposed the two-tiered wage system for Washington area food stores in 1980 when they looked at the possibility of opening a Basics warehouse store here. They hoped to repeat the success they had had with their Basics store in Sunrise, Fla., where Grand Union paid lower wages on the premise that clerks in limited assortments stores didn't need as many skills as clerks in bigger, more specialized supermarkets.
The company had no difficulty implementing its wage policy in non-union south Florida. In Washington, where employes of nearly all the large food stores--with the notable exception of Magruder's--are represented by the union, Grand Union officials went to union leader Tom McNutt. He considered the options and concluded that more could be gained than lost by going along with the supermarkets.
Among other things, the agreement between the union and the chains defines the warehouse store. The Basics or Food Barn, for instance, can't carry more than 3,500 items (compared to the 12,000 in an average conventional store). The warehouse store can't provide free bags, bagging orders or trading stamps. And it can't use games or gimmicks for sales promotion.