International News - Supermarkets defy strike action

US supermarket chiefs have said industrial action is a small price to pay in the drive to cut costs, leaving striking US grocery workers facing a long period on the picket lines.

Last week Safeway said it was tolerating industrial action at its Californian Vons stores. It claimed that at least $130 million (£77.77 million) could be saved over three years if the cost of employee healthcare benefits is reduced.

Healthcare costs have more than doubled in the four years since negotiations on working conditions were last held.

Wal-Mart's intention to open another 40 supercentres in the state has meant cost-cutting by rival chains is imperative.

The fortnight-old strike has hit California's three largest grocers; Vons, Kroger-owned Ralphs and Albertsons.

Retailers have not yet released sales data that could shed light on the effect of the strike. However, economists estimate that it is already costing the Californian economy about $6.3 million (£3.77 million) a day.

More than 70,000 members of the United Food and Commercial Workers Union (UFCW) have either walked out or been refused access to about 900 stores in California, after the healthcare and working conditions negotiations broke down. A further 10,000 workers in Missouri, Ohio, Kentucky and West Virginia have also joined the action.

The wrangle is developing into a test for US industrial relations. Unionisation has helped to deliver decent incomes and generous packages for supermarket workers.