Strike costing Stop & Shop $2M a week

Analyst says supermarket chain may lose customers permanently

A leading national retail consultant has estimated that the walkout by Stop & Shop workers is costing the grocery chain $2 million per week and likely will cause the company to permanently lose a portion of its market share the longer the strike continues.

Bert Flickinger, managing director of New York City-based Strategic Resource Group, said the strike couldn’t have come at a worse time for Stop & Shop, which is owned by Danish-retail giant Ahold Delhaize. Holy week, the seven-day period leading to Easter, and Passover traditionally are among the busiest weeks annually in the supermarket business, Flickinger said.

He estimated if the strike isn’t settled in time for shoppers to buy their holiday food items, Stop & Shop could lose as much of 5 percent of its total annual sales and 4 percent of its profits for this year.

“There’s really no chance for them to make that up,” he said. “The next big sales period for grocery stores is

between Memorial Day and Labor Day. And once shoppers have formed habits with another retailer, it’s hard to get them back.”

Flickinger estimated that for every dollar in lost sales, it costs $6 to get a customer back. Included in that $6 total are marking costs, price reductions on products to lure customers back and direct advertising, he said.

“And if they are able to get any customers back, it could take them up to a year to return,” Flickinger said.

Stop & Shop’s 92 Connecticut stores yield the chain’s largest amount of sales and profits, he said, even though the chain has 134 locations in Massachusetts.

Other supermarket chains serving the Connecticut market are being incredibly tight-lipped about what kind of customer activity they are seeing, even though there is plenty of anecdotal evidence that other grocery stores are benefiting from the Stop & Shop walkout.

Owners of ShopRite Supermarkets in Wallingford, Southington, Milford, Orange and several Fairfield County stores in the chain, as well as representatives of Trader Joe’s, Big Y and Adams Supermarkets, either did not return calls from Hearst Connecticut Media about the impact the strike was having on their business or declined to comment on it. Even officials with the Connecticut Food Association, a trade association that represents grocers in the state, declined to comment.

David Cadden, a professor emeritus at Quinnipiac University’s School of Business, was shopping at the Big Y Wednesday afternoon.

“This place is mobbed,” Cadden said.

Flickinger said he and members of his consulting team vistied some Connecticut Stop & Shop locations over the weekend.

“Their parking lots are empty, but when you visit the other chains, you have to drive around for 10 or 15 minutes to find a parking spot,” he said. “And inside, it’s all hands on deck.”

Cadden said one reason that other grocery chains may be unwilling to comment on how the Stop & Shop strike is affecting their business is what the outcome of the walkout might mean to their businesses going forward.

“If the union gets what it wants, it will be emboldened to try and organize at other grocery chains,” he said. “My sense is that they (executives at other grocery chains) think that it will go away if they don’t talk about it.”

Stop & Shop is one of the largest unionized supermarket chains in the country, Flickinger said.

Before this walkout, Flickinger said the longest strike in Stop & Shop’s history was four hours during 1988. Ahold Delhaize acquired Stop & Shop in 1996 from New York City-based private equity firm Kohlberg Kravis Roberts, Flickinger said.