UFCW Weakened Itself

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The UFCW’s 2004 strike against California grocery store chains damaged the unionized stores and helped non-union grocery stores. And in the process of weakening the grocery chains, the union weakened itself.

They [Aldi and Whole Foods] took advantage of a grocery landscape that has been in upheaval since the 141-day work stoppage and lockout, which cost Ralphs and Albertsons $1.5 billion in sales and helped retailers such as Wal-Mart and Target expand their grocery aisles.

“That last time, it increased the opportunities for other chains geometrically,” said Burt Flickinger III, managing director of consulting firm Strategic Resource Group. “The unionized operators, and the unions, were hit so hard financially.”

Since then, the big chains have hemorrhaged market share. In 2004, Ralphs, Albertsons and Vons/Pavilions (which was acquired by Albertsons in 2014 as part of its Safeway purchase) held nearly 60% of the Southland’s grocery trade, according to the Strategic Resource Group. That share has plunged to about 33% today.

These days, Unified Grocers Inc. in the City of Commerce, a wholesale cooperative which mainly serves independent stores, controls 16.6%, according to the Shelby Report, which tracks the industry. Wal-Mart is right behind with 11%, followed by Stater Brothers at 8.9% and Trader Joe’s with 6.2%.

A strike presents an opportunity to grocers to break the shopping habits of consumers. Once someone flees to another chain, they often don’t go back, analysts said.