Tesco's conflict with UFCW in the US is creeping across the Atlantic and the UK unions are rumbling

Tesco chief executive Sir Terry Leahy is used to formidable opponents but US democratic presidential nominee Barack Obama must surely be one of the most high-profile critics he has ever faced (The Grocer, 28 June, p6).

Obama's letter to Sir Terry asking him to meet the United Food and Commercial Workers Union over employment rights at its Fresh & Easy stores was timed for maximum effect, coming just before the issue was raised at the behemoth's agm last week. It's not surprising Obama has come out in support of the UFCW - the union has publicly supported him and mobilised its 1.3 million members to campaign for the Democratic hopeful.

What is surprising is Tesco's muted - indeed almost dismissive - response. It says it has failed to meet the UFCW in two years because the union has opposed Tesco from the outset. At the AGM Sir Terry trotted out the same old statements so often heard in response to questions about unions - union membership is a "matter for individual choice" and the workers in the States have no desire to join a union.

This is a missed opportunity for Tesco. Its relationship with UK unions (in particular Usdaw) is as good as it gets in retailing.

Failure to engage with UFCW in the States could well be a major PR blunder. According to sources over there, the union is going to challenge Fresh & Easy on a market-by-market basis in California.

On the upside, Tesco does have something positive to shout about. Its employment package is pretty good. However, while workers in the more rural and suburban areas are less inclined to mobilise, the city governments of San Francisco and Los Angeles are sympathetic to the union.

Tesco's foray into the States has yet to be the public success the retailer hoped for. New merchandising strategies may help, but the last thing it needs is the bad publicity that accompanies accusations of poor employment practices.

Of course, bad news from across the Atlantic has a negative effect back home. Unions have spotted their opportunity and are cosying up to Number 10 to lobby for changes in employee rights.

Unfortunately for employers in the food sector, increasing inflation and the poor economic outlook mean union rhetoric is having an effect in workplaces. ACAS boss Ed Sweeney is predicting the worst industrial strife for many years.

With the decline in union membership stalling - and even rising among mid-level associate professionals and sales and customer service roles - employers had better brush up their industrial relations skills.

Otherwise you can expect stories of strikes to appear more regularly in the pages of The Grocer over the next two years. n

Siân Harrington is editor, Human Resources

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