Stop & Shop Strike Hinders Its Dutch Owner's U.S. Turnaround Plan
Stop & Shop Strike Hinders Its Dutch Owner's U.S. Turnaround Plan
(Bloomberg) -- A strike by Stop & Shop supermarket workers could jeopardize the chain’s turnaround plan and heap more pressure on its Dutch owner, Royal Ahold Delhaize NV.
More than 31,000 employees in three New England states walked off the job Thursday at Stop & Shop, Ahold Delhaize’s biggest banner in the U.S. It’s the largest strike in the retail industry since 2003, according to Bloomberg Law analyst Robert Combs, who called it “almost unheard of.” The United Food and Commercial Workers Union and the company disagree on health-care benefits, pensions and Sunday premium pay.
The stores reopened Friday with replacement workers, according to the Hartford Courant newspaper in Connecticut. Ahold Delhaize shares fell 1.4 percent, erasing the stock’s gains this year.
The discord comes at a bad time for the grocer, which generates about 60 percent of its sales from the U.S. and is trying to revive Stop & Shop after several years of sluggish performance. The company has pledged to invest up to $150 million annually in the 413-unit chain, remodeling stores to devote more space to categories like fresh produce and meat.
Supermarkets across the U.S. are spending billions to make stores more attractive and keep shoppers from defecting to online grocers or cheaper alternatives like Germany’s Aldi, which will have nearly 2,000 U.S. stores by the end of this year.
The union said Stop & Shop has proposed “drastic and unreasonable” cuts to pay and benefits, while the company said it’s “disappointed” that the UFCW ordered the stoppage and that Stop & Shop is ready to return to negotiations, which in recent days had included a federal mediator.
Things might not get resolved anytime soon, according to Jefferies analyst James Grzinic. “We ignore how big the gap is” between Ahold Delhaize’s offer and union demands, he said in a note.
To contact the reporter on this story: Matthew Boyle in New York at mboyle20@bloomberg.net
To contact the editors responsible for this story: Crayton Harrison at tharrison5@bloomberg.net, Lisa Wolfson, Mark Schoifet
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