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Grocery workers’ strike in Los Angeles continues

Marketplace Staff Sep 19, 2011

Grocery workers’ strike in Los Angeles continues

Marketplace Staff Sep 19, 2011

Steve Chiotakis: In Los Angeles today, there’s still no word on a deal between grocery workers and the three big supermarket chains. But negotiations continue and workers are on the job today at Ralphs (owned by Kroger), Vons (owned by Safeway), and Albertsons (owned by SuperValu). About 62,000 employees have been working without a contract since March.

David Smith is associate professor at Pepperdine University’s Graziadio School of Business and
he’s with us now. Good morning.

David Smith: Good morning.

Chiotakis: What happens when grocery workers go on strike? Do stores close?

Smith: Well in this particular case, the stores are planning to close — as least some of the stores. I know that Ralph’s is planning to close all of its stores, and Albertsons says it will close some of its stores.

Chiotakis: And how does this affect other grocery chains across the country? I know Albertsons, Kroger owns Ralphs, and Safeway owns Vons — those are chains that have stores all across the country, right?

Smith: Yeah. The Los Angeles operations for those chains are important, and they’ll certainly take a big financial hit. Certainly, it can impact their supply chain, it can impact their employee relations, it can impact some of the negotiations they have on other areas. There’s certainly ripple effects that will occur.

Chiotakis: What about for the competitors? Maybe the smaller markets, or the mom-and-pop shops that are there — will they get a boost from all this?

Smith: It has been said that the only ones that are likely to win from a strike are the competitors. The other stores that benefited in 2003 and 2004 when there was a strike are likely to benefit again, as consumers will shop elsewhere with their food dollar.

Chiotakis: We’ve heard a lot about collective bargaining rights and things like that being stripped away in other states. When we see a strike like this, does it turn the public opinion sour?

Smith: It certainly can — especially in a time of high unemployment, when many individuals would be happy to have a job right now. I think it’s not great timing for the unionists to go on strike because of the potential impact on public opinion.

Chiotakis: David Smith, associate professor of economics over at Pepperdine University. David, thank you.

Smith: Thank you.

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