Southern California UFCW Contract Expiring 3/6/22

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storewanderer
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Re: Southern California UFCW Contract Expiring 3/6/22

Post by storewanderer »

pseudo3d wrote: March 28th, 2022, 11:02 am

Oh yeah, Ralphs won't just vanish overnight (and 300 stores, even counting Food 4 Less, is still a big number)...but I can imagine Kroger doing some major restructuring to/downsizing of the chain if they mean business.
I think you could argue Kroger has already done that. That is why they only closed a couple stores in their rather pathetic protest of the "hero pay" ordinances. If they were sitting on a load of poorly performing stores they could have easily announced 25 closures and sent shockwaves but they didn't do that... There are not really a lot of poor condition/poorly performing stores left to close. They've closed hundreds of stores since 1998... while it could probably be said that most closed were in poor condition and poorly performing others were new stores they just didn't give enough time or tried to make work.
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Re: Southern California UFCW Contract Expiring 3/6/22

Post by storewanderer »

norcalriteaidclerk wrote: March 28th, 2022, 7:06 pm Kroger may be on the verge of embarrassing itself out of at least the Golden State if not the West Coast entirely,and I thought failed second Ralphs foray into NorCal was one of their biggest missteps.*wonders if Fred Meyer stayed an independent company at the time of the ABS/ASC merger*
With Fred Meyer you had a mixture of union and non union operations. Also some complications due to the employment model of the Fred Meyer banner stores where multiple unions are involved depending what department of the store it is, though back in the old days if one union went on strike the others who served the location right down to the truck drivers would follow in solidarity, I do not think that is the case anymore. Only parts of Smiths are unionized (certain locations have union in all positions, some only have union in certain departments). Not sure if Fred Meyer is union in all locations or it varies as well.

I find it funny Kroger is the one taking the hard line here. This is a terrible move for employee relations and the customer absolutely knows what is going on. That used to be Safeway's place at the table. It is funny how the situation has turned. I remember back in the 2004 strike the union came out and said if Ralphs was the only one they had been negotiating with, there wouldn't have been a strike. It was the other chains who were playing the hard line back then.

Another thing to remember also is the Food 4 Less units Kroger owns in SoCal are union but not part of this contract so if Ralphs is on strike the Food 4 Less Stores are still open and operating normally so the chain is still going to be generating a large chunk of its income in CA even if a strike takes place (unless that F4L union goes out in solidarity, which I do not think happened in 2004 so doubt would happen this time).

It will be interesting to see how Kroger handles the Food 4 Less contract which comes up for renewal sometime in the next year or two as well.
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Re: Southern California UFCW Contract Expiring 3/6/22

Post by veteran+ »

storewanderer wrote: March 28th, 2022, 9:53 pm
pseudo3d wrote: March 28th, 2022, 11:02 am

Oh yeah, Ralphs won't just vanish overnight (and 300 stores, even counting Food 4 Less, is still a big number)...but I can imagine Kroger doing some major restructuring to/downsizing of the chain if they mean business.
I think you could argue Kroger has already done that. That is why they only closed a couple stores in their rather pathetic protest of the "hero pay" ordinances. If they were sitting on a load of poorly performing stores they could have easily announced 25 closures and sent shockwaves but they didn't do that... There are not really a lot of poor condition/poorly performing stores left to close. They've closed hundreds of stores since 1998... while it could probably be said that most closed were in poor condition and poorly performing others were new stores they just didn't give enough time or tried to make work.
I can think of at least ONE store they should close........................(I'm sure there are more)

The Ralphs Fresh Fare on Doheny and Beverly in West Hollywood...................NOT one good thing about that trainwreck.
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Re: Southern California UFCW Contract Expiring 3/6/22

Post by CalItalian »

veteran+ wrote: March 29th, 2022, 7:20 am
storewanderer wrote: March 28th, 2022, 9:53 pm
pseudo3d wrote: March 28th, 2022, 11:02 am

Oh yeah, Ralphs won't just vanish overnight (and 300 stores, even counting Food 4 Less, is still a big number)...but I can imagine Kroger doing some major restructuring to/downsizing of the chain if they mean business.
I think you could argue Kroger has already done that. That is why they only closed a couple stores in their rather pathetic protest of the "hero pay" ordinances. If they were sitting on a load of poorly performing stores they could have easily announced 25 closures and sent shockwaves but they didn't do that... There are not really a lot of poor condition/poorly performing stores left to close. They've closed hundreds of stores since 1998... while it could probably be said that most closed were in poor condition and poorly performing others were new stores they just didn't give enough time or tried to make work.
I can think of at least ONE store they should close........................(I'm sure there are more)

The Ralphs Fresh Fare on Doheny and Beverly in West Hollywood...................NOT one good thing about that trainwreck.
Ralphs owns the property of the former Hughes Market. They should redevelop it into a larger store with underground parking.
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Re: Southern California UFCW Contract Expiring 3/6/22

Post by pseudo3d »

storewanderer wrote: March 28th, 2022, 9:57 pm
norcalriteaidclerk wrote: March 28th, 2022, 7:06 pm Kroger may be on the verge of embarrassing itself out of at least the Golden State if not the West Coast entirely,and I thought failed second Ralphs foray into NorCal was one of their biggest missteps.*wonders if Fred Meyer stayed an independent company at the time of the ABS/ASC merger*
With Fred Meyer you had a mixture of union and non union operations. Also some complications due to the employment model of the Fred Meyer banner stores where multiple unions are involved depending what department of the store it is, though back in the old days if one union went on strike the others who served the location right down to the truck drivers would follow in solidarity, I do not think that is the case anymore. Only parts of Smiths are unionized (certain locations have union in all positions, some only have union in certain departments). Not sure if Fred Meyer is union in all locations or it varies as well.

I find it funny Kroger is the one taking the hard line here. This is a terrible move for employee relations and the customer absolutely knows what is going on. That used to be Safeway's place at the table. It is funny how the situation has turned. I remember back in the 2004 strike the union came out and said if Ralphs was the only one they had been negotiating with, there wouldn't have been a strike. It was the other chains who were playing the hard line back then.

Another thing to remember also is the Food 4 Less units Kroger owns in SoCal are union but not part of this contract so if Ralphs is on strike the Food 4 Less Stores are still open and operating normally so the chain is still going to be generating a large chunk of its income in CA even if a strike takes place (unless that F4L union goes out in solidarity, which I do not think happened in 2004 so doubt would happen this time).

It will be interesting to see how Kroger handles the Food 4 Less contract which comes up for renewal sometime in the next year or two as well.
Yeah, good point. After the strike, Albertsons continued to contract after the 2002 shutdowns and would split in 2006, while Safeway began the Lifestyle program soon after, which despite some industry headlines at the time, it didn't turn around the divisions they had purchased in the late 1990s (specifically, Randalls/Tom Thumb, Dominick's, and Genuardi). While we know what happened to a bunch of their stores and a few divisions, I believe they also cut several of their plants. I know they sold off the Joplin biscuit plant but I think they also had a pet food plant located somewhere as well.

It's unlikely Kroger will do a slow implosion like that, Safeway was the smallest of the "big three" going in to the 2003-2004 strike, and Kroger still is larger than Albertsons Cos., including a massive collection of East Coast divisions that Albertsons and Safeway never had.
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Re: Southern California UFCW Contract Expiring 3/6/22

Post by timanny »

storewanderer wrote: March 27th, 2022, 7:15 pm
pseudo3d wrote: March 27th, 2022, 5:42 pm
Kroger also set up a similar site when the Houston division threatened a strike last year and still seems to be negotiating still as of 1/31/22 (almost two months ago). But...as much as some on this site are pro-union, what did the 2004 strike accomplish besides kicking the can down the road? It made the unionized supermarkets less attractive to work at because new workers would never get the same benefits as older ones did and in general weakened their position to the point that three unionized supermarket chains would become two unionized chains in a course of about a decade.

And since Ralphs really doesn't seem to be a core market of Kroger's anymore, is it a stretch of the imagination that they'd pull the plug on it? Convert a few to Food 4 Less, sell a few to Albertsons or Stater Bros., maybe keep one as a delivery "spoke" warehouse, sell some sites, and restructure the rest as a non-union subsidiary.
The 2004 strike was a complete failure (unless you were Stater Bros. or a non-union competitor in which case it was a windfall like no other). It resulted in dozens of additional closed stores for the chains, customer losses for stores that did stay open, stunted growth for the chains down there to this day (how many stores collectively have Vons/Ralphs/Albertsons opened since 2004- between them- suspect it is less than 12 stores total), resulted in Ralphs NorCal being killed, and may have also been the final push to Albertsons that caused finances to deteriorate to the point that the company needed to be split.

The two tier union pay scales were not unique to SoCal in 2004; that started back in the 1990's in many territories.

I think Ralphs is absolutely a core market for Kroger in/around Los Angeles. Ralphs has strong penetration in those counties. Ralphs may have fewer stores around San Diego but what they have performs strongly for a Ralphs. The chain "Ralphs" will definitely continue as a chain long term, around Los Angeles, there is no question. Ralphs doesn't seem to fit well with the rest of Kroger for a variety of reasons and this strike vote outcome is just another issue that may or may not resolve itself. If it isn't under Kroger it will be under someone else. But "Ralphs" as a chain will not cease to exist.
Ralphs as a chain or brand will not cease to exist, it just might not be part of Kroger. Save Mart was just purchased by a private equity group based in LA; if they turnaround Save Mart (which has already started prior to the purchase) the way Cerebrus turned around Albertsons, I could see Ralphs becoming Save Mart's brand south of the Grapevine.
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Re: Southern California UFCW Contract Expiring 3/6/22

Post by Alpha8472 »

The split up of Kroger and Albertsons is an intriguing idea. The companies are so big that regional chains have lost their way. Sell off the dead weight and let someone else run them.
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Re: Southern California UFCW Contract Expiring 3/6/22

Post by HCal »

timanny wrote: March 29th, 2022, 4:24 pm Ralphs as a chain or brand will not cease to exist, it just might not be part of Kroger. Save Mart was just purchased by a private equity group based in LA; if they turnaround Save Mart (which has already started prior to the purchase) the way Cerebrus turned around Albertsons, I could see Ralphs becoming Save Mart's brand south of the Grapevine.
Ralphs/Food4Less combined is Kroger's largest division by number of stores (I know they are technically two divisions, but Ralphs by itself was their largest division for many years until they acquired Harris Teeter) and California has more Kroger stores than any other state. I believe Ralphs is still #1 in LA, the second largest metro in the country.

There is no way Kroger is going to give this up. Maybe Ralphs isn't that great from a consumer's perspective, but it's great for investors, with each store doing higher volume than most local competitors.
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Re: Southern California UFCW Contract Expiring 3/6/22

Post by pseudo3d »

Alpha8472 wrote: March 29th, 2022, 5:15 pm The split up of Kroger and Albertsons is an intriguing idea. The companies are so big that regional chains have lost their way. Sell off the dead weight and let someone else run them.
The splitup of Albertsons already happened years ago (and hopefully never again, but analysts continue to speculate), and despite its problems, Ralphs isn't exactly "dead weight".
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Re: Southern California UFCW Contract Expiring 3/6/22

Post by storewanderer »

timanny wrote: March 29th, 2022, 4:24 pm

Ralphs as a chain or brand will not cease to exist, it just might not be part of Kroger. Save Mart was just purchased by a private equity group based in LA; if they turnaround Save Mart (which has already started prior to the purchase) the way Cerebrus turned around Albertsons, I could see Ralphs becoming Save Mart's brand south of the Grapevine.
Save Mart does not have the knowledge or ability to run Ralphs Stores (have you seen what the Ralphs they took over in Clovis and Bakersfield look like...?). Valley Central California and SoCal are not the same market and Ralphs and Save Mart do not cater to the same customer at all. Save Mart's Lucky banner is almost a non-factor in the bay area (Lucky format is not exactly strong- it is an achievement they are even still open) and again the bay area is not SoCal either (as Ralphs found out).

Ralphs is fully tangled up in the Kroger ecosystem at this point. Its merchandising, private label, pricing, store layout, operational structure, programs like pickup, loyalty card, are all so tangled into the Kroger ecosystem that you could not just sell the thing to Save Mart and it would be able to continue. It would be a major effort requiring a lot of talent and effort to break Ralphs out of the Kroger ecosystem into something that would work on its own. At this point with how Kroger has cycled through division management there are not really any "Ralphs veterans" to take a corporate management role and oversee the chain in the event of a split off.

I don't even think Save Mart could run the Food 4 Less format (that format under Kroger has evolved into having a much heavier fresh and non food offering than the Food Maxx Stores Save Mart owns have), but they'd have a better chance with that than they'd have with Ralphs. Still, Food Maxx is basically the old early 90's F4L. But F4L under Kroger has really evolved down there in SoCal into a bit of a different format. Food Maxx... is still the old early 90's F4L. And the old early 90's F4L would be out of business in SoCal by now had it continued under that format.

Remember how it went when Save Mart took over NorCal Albertsons? It tanked their company... once they converted the stores the volumes dropped dramatically after the honeymoon period ended and the quality of their entire operation fell off a cliff. And NorCal Albertsons was a very broken operation. Everyone was really excited to get away from Albertsons in NorCal but Save Mart botched that acquisition in a major way. Ralphs still "works" - generally speaking - but a lot of the pieces from the Kroger ecosystem are what make it work.

There would be zero reason to "integrate" Save Mart and Ralphs. Both have their own dairy operation (Save Mart sold off milk but kept other dairy), warehouses, etc. If this private equity firm was to buy Ralphs, it would need to be managed and operated 100% separately from Save Mart with zero influence between the two.

Save Mart and Stater... that may be something viable... Stater would bring stronger fresh programs, better market knowledge/research, more effective merchandising, and a better pricing program, Save Mart would bring a pharmacy operation/discount format/dairy operation.
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