The Desert Sun in Southern California reports that the evidence seems to suggest that the three major supermarket chains – Albertsons, Kroger’s Ralphs, and Safeway’s Vons – that endured a three-month strike/lockout less than a year ago have not yet recovered from the labor strife that virtually shut down many of their stores.
(We say “virtually” because while the doors remained open, the shelves were increasingly bare, the aisles were generally empty, and the customers mostly seemed to be elsewhere.)
Even once the strike/lockout ended, many consumers who had developed new shopping habits – going to Stater Bros., or Trader Joe’s, or Costco, or Whole Foods, or Bristol Farms, or Smart & Final – decided not to return to their old stores but remain loyal to their new food shopping experiences. And most of these companies report that they have held onto much of the sales gains that they made during the strike/lockout.
Depending on how you calculate the losses during the four-month event, the financial impact on the three chains is estimated at between $750 million and $1.5 billion…which explains why all three of them have embarked recently on loyalty marketing and discount schemes designed to lure folks back into their stores. (The chains aren’t exactly doing any explaining themselves, refusing to talk about the long-term impact of the strike on sales.)
(We say “virtually” because while the doors remained open, the shelves were increasingly bare, the aisles were generally empty, and the customers mostly seemed to be elsewhere.)
Even once the strike/lockout ended, many consumers who had developed new shopping habits – going to Stater Bros., or Trader Joe’s, or Costco, or Whole Foods, or Bristol Farms, or Smart & Final – decided not to return to their old stores but remain loyal to their new food shopping experiences. And most of these companies report that they have held onto much of the sales gains that they made during the strike/lockout.
Depending on how you calculate the losses during the four-month event, the financial impact on the three chains is estimated at between $750 million and $1.5 billion…which explains why all three of them have embarked recently on loyalty marketing and discount schemes designed to lure folks back into their stores. (The chains aren’t exactly doing any explaining themselves, refusing to talk about the long-term impact of the strike on sales.)
- KC's View:
-
The story concedes that the one wild card in all this is Wal-Mart…it is hard to know whether supercenters being opened by the Bentonville Behemoth also are keeping customers away from Albertsons, Vons and Ralphs.
But it sees to us that the really interesting thing about this story is that the smaller companies that have made strides all offer the consumer compelling and differentiated shopping experiences…some more than others, but each of them has a distinct character that reflects certain cultural values.
Maybe that’s why they are keeping customers. Y’think?
And y’think maybe this ongoing loss of sales is a sobering thought to all three chains as they contemplate a similar scenario in Northern California?
We suspect it is, especially as labor negotiations begin today between Bay Area grocers and their 30,000 unionized employees working under a contract that expires this Saturday, September 11.
