Raley's is following through on its threat to close more stores as it tries to pressure its union workforce into accepting concessions.
The West Sacramento grocer said Friday it will close a Raley's in Rancho Cordova in mid-April. A Nob Hill Foods store in Milpitas will close sometime later.
"The decision to close the stores was made following a review by the company to identify underperforming stores and determine the future sales volume," Raley's said in a statement.
Raley's and Northern California's other unionized chains, Safeway and Save Mart, are struggling to hold market share against non-union grocers like Wal-Mart and Fresh & Easy.
The three union chains have been locked in contract negotiations for months with the United Food and Commercial Workers, with no breakthrough in sight.
The three grocers, saddled with one of the most expensive contracts in the industry, are seeking lower labor costs. In particular, they're pressing for big changes in health coverage.
Last month, in a memo to employees, Raley's chief executive Michael Teel said the impasse is costing the company millions of dollars.
He blamed the UFCW for two store closures announced in January: a Bel Air in Elk Grove and a Raley's in Modesto.
The UFCW has acknowledged that Raley's, Safeway and Save Mart are facing competitive pressures. But the union says it believes the grocers are exaggerating their troubles.
One thing is certain: Competition in the Sacramento market continues to increase. Next week, British-owned Fresh & Easy will open the first of five stores planned for the Sacramento region. Fresh Market, a chain of upscale stores based in Texas, is also laying plans to enter the market, starting with a store in Roseville. Other newcomers include Sprouts and Sunflower organic markets.
QUICK FACT
In January, Raley's announced that it would close a Bel Air store in Elk Grove and a Raley's supermarket in Modesto. In November, it announced that it would close its North Highlands Raley's, but that was converted to a Food Source, the grocer's discount warehouse brand.
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