The last time Stop & Shop workers went on strike, more than three decades ago, they were expressing concern over a merger aimed at preventing a hostile corporate takeover.
When they felt the terms of the merger addressed their concerns, the 7,500 members of the United Food and Commercial Workers Union returned to work at 55 stores across Connecticut and western Massachusetts. In all, the 1988 strike lasted just 12 hours.
Unionized Stop & Shop employees, now 31,000 strong, are again on strike, but the focus, tone and even public perception are very different. Workers, who Thursday were on their eighth day of the strike, are looking to preserve wages and benefits while Stop & Shop assesses its place in a crowded grocery industry.
“They are looking down the road and are scared witless of Walmart, Whole Foods and Aldi, and want to reduce their cost of labor,” Quinnipiac University business professor David Cadden said of Stop & Shop. “They can’t squeeze more margin out of suppliers, and they are terrified of the economic advantage that Walmart has. Management likes to wheel out that it’s a union shop, but you’ve got everything a union should be fighting for.”
When Stop & Shop workers began picketing at noon on March 22, 1988, the strike was in response to plans for Kohlberg Kravis Roberts & Co., a New York investment banking firm, to assume control over the company the following month. The supermarket had agreed to be acquired for $1.2 billion to avoid an attempted hostile takeover.
Workers ended their strike the next day.
Since then, Stop & Shop has been sold to a publicly traded Dutch corporation, Ahold Delhaize, that reported $2 billion in revenue last year and recently voted to give its shareholders an 11 percent dividend increase. In the past 30 years, cheaper competition from chains and the near elimination of grocery worker unions have left vulnerable stores caught in between low-price and high-end chains, the company states.
Cadden said stores like Whole Foods and Trader Joe’s have built devoted customer bases through their offerings and service, while Aldi and Walmart have sacrificed service in pursuit of lower prices. Those who take that mid-point strategy risk getting crushed, he added.
Cadden said Stop & Shop is “really out to cut costs” on health care, pensions and overtime for the weekends, opting instead for automation. The union is worried about workers paying more in health care, an estimated $900 in three years, and elimination of overtime benefits to future hires.
The prolonged Stop & Shop strike has meant not only reduced wages for the striking employees, but profit losses for the grocery chain now running in the millions.
“In nearly 30 years, we haven’t seen a strike as effective and devastating as this one,” Burt P. Flickinger III, managing director of Strategic Resource Group, told the Boston Globe this week.
Parking lots at Stop & Stores in three states have been barren, with managers running the front end and shoppers using the self-check registers. Bakery, floral and Peapod delivery orders have been canceled and shoppers have scrambled to make other arrangements. .
“It’s been a godsend for Big Y,” said UConn Economy Professor Fred Carstensen. “Milford’s store is up 139 percent, and they are $1 million above projections this week in Manchester. They are working hard to capture those customers.”
Carstensen has a student who works for Big Y. He asked her to create a presentation on comparisons between pay and benefits of a union and non-union grocery store and the impact of the strike. She reported little difference in benefits and wages between union and non-union shops.
“Big Y is not unionized, the pay is comparable,” Carstensen said. “She said Big Y spends on good health care, dental and vision.”
Stop & Shop is trying to create a two-tier system of employees that will ultimately make veteran employees angry, he said.
Carstensen said Stop & Shop also wants more managerial discretion over job classifications, as the current agreement largely segregates employees into defined roles.
Stop & Shop has issued statements and updates on the negotiations with the unions and a federal mediator. It has also not locked out its employees and allows the workers to picket on the store property.
"There is nothing we want more than having our associates back in the stores, taking care of customers and our communities,” according to a company statement. “We have offered fair and responsible contracts and remain in active negotiations to reach new agreements as quickly as possible that keep our associates among the highest paid grocery retail workers in New England, while also providing excellent health care and increased contributions to a defined benefit pension plan."
Cadden, though, said Stop & Shop might be surprised by the amount of support workers are receiving from customers, passing motorists, other unions.
“The progressive growth of inequality in the country has made people more sympathetic to the union demands than they have been in the past 15 years,” Cadden said. “By thinking they are hanging tough, the management is exemplifying the management doesn’t care about its customers.”
Democratic lawmakers have also joined the strikers on the picket line to bring food and support.
“You can’t afford the luxury of being a centrist, particularly in this climate of inequality,” Cadden said. “Because then, you’re not being a Democrat.”