Corporate Store News Northeast

Strike Will Impact Operating Profit, Stop & Shop Says

Stop & Shop and USO

Stop & Shop, an Ahold Delhaize company, sent out a statement April 23 saying that as a result of the 11-day strike in its New England stores that was resolved April 21, it is estimating an impact on profit of between $90-$110 million. That impact is the result of lower sales, increased shrink of seasonal and perishable inventory and additional supply chain costs. The Netherlands-based Ahold Delhaize now anticipates underlying operating margin for the group for 2019 to be slightly lower than 2018.

In addition, the percentage growth of underlying earnings per share in 2019 is revised from high single-digits to low-single digits. It is expected that group free cash flow will be unchanged for the full year 2019 due to the “continued business strength of other U.S. and European brands,” Ahold Delhaize said. First quarter 2019 financial results are unaffected and in line with expectations, to be published on May 8. At that time, more details will be provided on the impact of the strikes at Stop & Shop.

“I am pleased that Stop & Shop’s management and the five local unions have tentatively reached a fair and responsible contract in which all Stop & Shop associates are offered pay increases, eligible associates have continued excellent health coverage and eligible associates have ongoing defined benefit pension benefits,” said Frans Muller, CEO of Ahold Delhaize. “I know that both Stop & Shop management and its associates are proud to welcome customers back and look forward to taking care of them every day.”

The April 21 agreement was made between the grocery chain and representatives from Locals 328, 371, 1445, 1459, and 919 of the United Food and Commercial Workers (UFCW). The five locals, representing more than 31,000 employees, went on strike April 11 following the expiration of a three-year contract on Feb. 23.

Federal mediators Paul Chabot and Martin Callaghan from the Federal Mediation & Conciliation Service (FMCS) were requested by management and the unions to join the negotiations on April 3, following an impasse between the two parties. FMCS Director Nominee Richard Giacolone commended the parties on their signing of the TA and the work of the mediators. “Bargaining sessions are no easy task for anyone involved, and I’m proud to see the tenacity and efforts by the parties and FMCS’ mediators pay off with a successful outcome. Being able to create a path for workers to get back on the job is great for management and labor and certainly great for the customers eager to visit Stop & Shop for their grocery needs once again.” The work stoppage was highly publicized in local and national media and gained a wide array of attention, including participation by celebrities and political figures.

With assistance by fellow FMCS commissioners Barbara Owens and Dan Ross, Chabot and Callaghan were able to assist the parties in coming to the table and reaching a mutually acceptable agreement, FMCS said adding that the agreement reached by the parties concerned provisions on a variety of issues including health care and retirement benefits, wage increases and overtime pay for current members.

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