Community groups want more than Tesco’s word
Not a single Fresh & Easy market has opened in Southern California, but British owner Tesco is already under pressure from community groups to live up to promises to pay decent wages, provide affordable health benefits and reduce greenhouse gases.
Tesco, the world’s third-largest retailer, is spending $2 billion to build hundreds of small grocery stores in Southern California and the Southwest. In launching its U.S. business, the company has boasted of green and worker-friendly practices. But internationally, Tesco has raised the hackles of labor, environmental and animal welfare groups for various policies around the world.
A coalition of 25 community organizations in Southern California is set to call on Tesco today to sign a “community benefits agreement” that would bind the British retailer to its previous promises to pay its Southern California workers well above the minimum wage, offer health benefits and to be environmentally responsible when it launches its Fresh & Easy Neighborhood Market chain of small grocery stores this fall.
In a letter to Tim Mason, chief executive of Tesco’s U.S. operations, the Alliance for Healthy and Responsible Grocery Stores said it was concerned about “Tesco’s record for living up to its commitments.”
It proposed negotiating a legally binding agreement that puts the retailer’s “promises into writing.”
Such a contract would commit Fresh & Easy to pay livable wages, provide access to affordable healthcare, hire people who live near the stores and guarantee its workers the right to join unions without company hindrance, said Greg Good, spokesman for Los Angeles Alliance for a New Economy, one of the organizers of the coalition.
Additionally, the coalition wants Fresh & Easy to open more stores in underserved communities, operate green buildings and reduce the traffic and pollution that its large distribution network will create.
Fresh & Easy executives did not return calls seeking comment on the proposal. But previously, Mason said that entry-level positions at Fresh & Easy would start at $10 an hour in California and include a quarterly bonus of as much as 10%. All of the jobs will be at least 20 hours a week.
Moreover, Mason said the stores were being designed to use less electricity. Windows will be placed to provide more natural light. The airflow on the refrigeration units is being modified to reduce power consumption by 10%. Outside signage and freezer lighting will rely on energy-efficient bulbs. Shipping and packing materials will be either recycled or reused. And deliveries will be timed not to interfere with periods of heavy local traffic.
Tesco has said it will put stores in low-income neighborhoods, including one that’s planned for Los Angeles at East Adams Boulevard and South Central Avenue.
The concept of a legal agreement to make sure that a company lives us to its promises is not new to the region.
For example, billionaire Philip Anschutz’s AEG, owner of Staples Center and the Kings hockey team, signed such an agreement during the planning for LA Live, a $2.5-billion sports, residential and entertainment district under construction in downtown.
“Using a broad community coalition was an efficient way for us to communicate and identify the community priorities,” said Martha Saucedo, AEG’s vice president of community affairs. “It was an organized manner to do this.”
The developer agreed to affordable-housing plans that were greater than the Los Angeles requirement at the time. AEG agreed to ensure that tenants of its complexes set goals to hire 30% of their workers from the surrounding community and to have 70% of the jobs meet the living wage standard set by the city. Los Angeles recently raised the living wage to $10.96 an hour for companies without health benefits and $9.71 an hour as long as the employer is contributing $1.25 per hour worked to pay for employee health insurance.
Saucedo said AEG was pleased with the support it received from the coalition when it went through the city’s entitlement and permitting process.
It also is a smart strategy on the part of local interest groups, said Robert Gottlieb, an Occidental College urban policy professor who has studied Tesco.
“When different groups come together, you have a pressure point that is more than simply saying we want a green building or we want union representation,” Gottlieb said. “You have more leverage.”
After reviewing Tesco’s operations abroad, Gottlieb said that he found “situations where they have not lived up to the commitments they made,” but that the company often responded to pressure from the community and local governments.