Strike costs 3 supermarkets in California $500M in sales
By James F. Peltz
Los Angeles Times
The three supermarket chains whose Southern California workers have been on strike or locked out for eight weeks have lost well over a half-billion dollars in sales since the labor dispute began, figures released by Albertsons Inc. indicated yesterday.
In reporting its third-quarter financial results, Albertsons became the first of the three chains to put hard numbers on widespread anecdotal evidence that shows consumers have been steering clear of picket lines in favor of smaller markets, or cutting back on shopping altogether.
Albertsons, the smallest of the three chains in Southern California with 259 stores in the region, said it lost $132 million in sales from Oct. 11 through Oct. 30. The other chains have yet to disclose their losses. Presuming they are similar, that would put their combined drop in sales for just the first three weeks close to $400 million.
The Albertsons data underscored the strain of the labor battle, which has idled about 70,000 union members who are making a fraction of their salaries walking picket lines.
Albertsons and Ralphs, which is owned by Kroger Co., locked out their union employees after the United Food and Commercial Workers union struck Safeway Inc.'s Vons and Pavilions stores Oct. 11. The three chains are bargaining jointly with the union, and a key roadblock is the chains' demand for cuts in health care benefits.
Both sides held talks with a federal mediator yesterday and negotiations are set to continue through the weekend. The parties declined comment on the talks' progress, citing the mediator's request that they not publicly discuss the matter.
Prices of the three chains' stocks fell after Albertsons' announcement.
Some analysts said they were surprised at the magnitude of the dispute's impact on sales. The head of one of the seven UFCW locals involved chided the supermarkets for sacrificing sales to gain a new labor pact to their liking.
"These numbers demonstrate how utterly senseless this strike is," Local 770 President Rick Icaza said in a statement.
"If Ralphs, Vons and Albertsons had been willing to spend that same amount of money, in combination with the unions' effort to modify the plan to contain health-care inflation, we would almost certainly have avoided a strike."
