Tuesday, September 20, 2011

SoCal Grocery Stores Reach Deal with United Food and Commercial Workers

At LAT, "Ralphs, Vons, Albertsons, union reach labor deal, avert strike."

Apparently, both sides realized a strike would be devastating, as this earlier LAT report indicated, "In the event of a walkout, the chains' competition would be the big winners":
Today, Ralphs, Vons and Albertsons have fewer stores in Southern California, and fewer employees. Albertsons has closed 67 locations since the 2003-04 strike and worker lockout. Ralphs has closed 48 stores, and Vons and Pavilions are down 47.

The competition is filling the gap. Unified Grocers, which represents at least 526 stores owned by independent chains, controls 12.1% of the grocery market in Southern California and Las Vegas, according to research by the Shelby Report, a grocery industry publication.

Trader Joe's, with 106 stores, has 5.4% of the market. Smart & Final, Tesco's Fresh & Easy and Whole Foods combined control another 5.4%, according to the report.

Although these companies all target different consumers, they have one thing in common: They are, for the most part, non-union shops. And like the airline and auto industries, the three big unionized retailers all have legacy health, pension and payroll costs that put them at an economic disadvantage.

Smaller chains can also tailor individual stores to the tastes of the neighborhood.

For independent grocer Jax Markets in Anaheim, that means packaging meat in smaller containers and wooing customers with personalized service. The four-store chain caters to predominantly Latino shoppers. A number of its customers don't have cars, so the grocer offers a free shuttle service for anyone who lives within a five-mile radius of a store and is willing to spend a minimum of $30 in their trip to the grocery store.

"When the gas prices were going up, I wondered, 'Is it really worth it?' But it is," said W. Bill MacAloney, chief executive of Jax Markets. "People are shopping around, and that gives us an opportunity. So we need to do what we can to help our customers."

Serving ethnic shoppers can go beyond carrying brands they like. A number of economic factors persuaded Vons to close one of its locations in a working-class Latino neighborhood of Long Beach. Superior Grocers snapped up the outlet in 2003, before the strike, and transformed it into a mid-size store with bargain-priced produce and fast-moving register lines.

On a recent Monday afternoon, a mostly Latino crowd jammed the produce section, plucking up bags of mangoes the size of softballs for 99 cents each. Customers reached for fresh tortillas made in the store, freshly baked French rolls and loaves of Mexican sweet bread. Flat-panel TVs played Spanish-language news clips. On the overhead speakers, daily specials rang out in English and Spanish.

Four miles to the southeast, in the upscale Belmont Shore neighborhood, Vons operates one of its smaller specialty stores, known as the Market by Vons. Sparkling clean and quiet as a library, the store features a bounty of wine and a limited produce selection. Mangoes there cost $1 more than at Superior Grocers and were half the size.

"I love this Vons, but I don't shop here all the time," said Patty Barnett, 38, an artist who lives in downtown Long Beach. "I shop where there are sales."