A preview of a new Facts, Figures, and the Future report from the Food Marketing Institute, ACNielsen, and Phil Lempert looks at the impact of the just-ended Southern California supermarket strike, as it "changed the economics and consumer shopping patterns in the Los Angeles market."
According to Lempert, "This strike, estimated to have cost the supermarkets involved over a billion dollars, had even a greater impact as it kept many shoppers from their favorite stores over Halloween, Thanksgiving, Christmas, Hanukah, New Year's, Super Bowl and Valentine’s Day – the largest food holidays during the year."
There were some 70,000 employees affected by the strike/lockout, which took place at Safeway's Vons, Kroger's Ralphs, and Albertsons.
"Total outlet sales are up 17 percent as compared to the thirteen weeks prior
to the strike," Lempert said, "due to a combination of factors including holiday sales volume and a higher cost of goods in the alternative outlets.
"Overall, however, the market is flat, with Total Outlet sales up just 0.1 percent versus a year ago. The Grocery Channel is down 16 percent and Dollar Stores up 13 percent, both over the previous year. Within the Grocery Channel, as to be expected, several non-striking grocery retailers have experienced large increases in share, dollars, and shoppers. The Convenience Channel appears to be benefiting the most, trailed by Dollar, Club, and Drug. Club is up 13 percent, and has picked up almost two share points – a result of both incremental strike business and an increase of market penetration of 3 points. Mass shows a decrease of 3 percent, which remains consistent with the trends reported in our monthly Channel Watch over the past year."
Lempert said that hard work is about to begin. "Now that the strike is over, and the price and value advertising has begun, it will be critical for the previously struck retailers to focus on the shopping experience for the returning customers. After discovering new outlets to buy their groceries, Los Angeles shoppers have experienced four months of new shopping environments; stealing them back may prove more difficult than just promoting deep discounting."
The March 4, 2004 Facts, Figures, and the Future report will be available Monday at: http:// www.factsfiguresfuture.com
According to Lempert, "This strike, estimated to have cost the supermarkets involved over a billion dollars, had even a greater impact as it kept many shoppers from their favorite stores over Halloween, Thanksgiving, Christmas, Hanukah, New Year's, Super Bowl and Valentine’s Day – the largest food holidays during the year."
There were some 70,000 employees affected by the strike/lockout, which took place at Safeway's Vons, Kroger's Ralphs, and Albertsons.
"Total outlet sales are up 17 percent as compared to the thirteen weeks prior
to the strike," Lempert said, "due to a combination of factors including holiday sales volume and a higher cost of goods in the alternative outlets.
"Overall, however, the market is flat, with Total Outlet sales up just 0.1 percent versus a year ago. The Grocery Channel is down 16 percent and Dollar Stores up 13 percent, both over the previous year. Within the Grocery Channel, as to be expected, several non-striking grocery retailers have experienced large increases in share, dollars, and shoppers. The Convenience Channel appears to be benefiting the most, trailed by Dollar, Club, and Drug. Club is up 13 percent, and has picked up almost two share points – a result of both incremental strike business and an increase of market penetration of 3 points. Mass shows a decrease of 3 percent, which remains consistent with the trends reported in our monthly Channel Watch over the past year."
Lempert said that hard work is about to begin. "Now that the strike is over, and the price and value advertising has begun, it will be critical for the previously struck retailers to focus on the shopping experience for the returning customers. After discovering new outlets to buy their groceries, Los Angeles shoppers have experienced four months of new shopping environments; stealing them back may prove more difficult than just promoting deep discounting."
The March 4, 2004 Facts, Figures, and the Future report will be available Monday at: http:// www.factsfiguresfuture.com
- KC's View:
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Not good news for the traditional grocery chains…nor are these developments positive for the unions. When are these folks going to realize that they have to work together, as opposed to fighting each other, if they are going to survive?
Not soon, we'd guess…since the speculation is that Northern California will have its own labor strife before the end of the year.
