Analyst: Strike could cost Stop & Shop $80 million

April 22, 2019

By Kim Kalunian | WPRI 12 Eyewitness News

CRANSTON, R.I. (WPRI) — An 11-day strike could end up costing Stop & Shop close to $80 million dollars, according to one industry analyst. 

Burt Flickinger III, managing director at Strategic Resource Group, a New York-based consumer industry consulting firm, says they estimate the grocery chain lost $25-$30 million in revenue and inventory during the strike. He said he expects the store will have to spend an additional $30-$50 million on advertising and promotional sales to win back customers they lost while workers were on the picket line.

Flickinger estimates up to 90 percent of customers stopped shopping at the supermarket during the strike and expects 95 percent will return.

“Hopefully they’ll have 97 percent back by Memorial Day,” Flickinger said in a telephone interview with Eyewitness News on Monday. He believes the store will have to spend tens of millions of dollars to win back 100 percent of shoppers by Labor Day.

On Monday, Warwick resident Patricia Depetrillo said she wouldn’t be immediately returning to Stop & Shop.

“I want to make sure everything’s fresh before I go in there again,” Depetrillo said as she visited a Dave’s Marketplace in Cranston. The nearby Stop & Shop store lacked fresh produce and the meat and seafood counters were empty when stores reopened Monday morning. Workers said they needed to wait for fresh stock to arrive, something they estimated could take several days.

No delivery trucks had crossed the picket line since the strike began on April 11. That Thursday afternoon, roughly 31,000 members of the United Food and Commercial Workers International Union (UFCW) walked off their Stop & Shop jobs, bringing business at roughly 240 stores in Rhode Island, Connecticut and Massachusetts to a halt. The strike came after months of failed negotiations over a new contract. Workers decried proposed changes to their health and retirement benefits while Stop & Shop representatives insisted they were offering an excellent deal.

Few shoppers crossed the picket lines during what would normally have been a busy shopping week leading up to the Easter and Passover holidays. Customers expressed their frustration but also voiced their support for the workers.

“It was a little, slightly frustrating,” said Patrice Moskow, whose neighborhood market, Eastside Marketplace, was acquired by Stop & Shop in 2017 and was closed during the strike. “It’s good that they went out on strike. I’m glad that New England supports its local markets and I’m glad that New Englanders seem not to be so willing to cross picket lines as other parts of the country.”

On Sunday, the unions and market announced they had struck a tentative agreement that would preserve health care and retirement benefits and time-and-a-half pay on Sundays for current workers. The contracts also include pay raises.

Flickinger believes both sides made out well, with workers getting what they wanted while Stop & Shop maintained the ability to move forward with the acquisition of King Kullen stores. But, he said, had the strike lingered on, it might not have been that way.

“Had the strike lasted another half a week to a week, Stop & Shop could have lost 10 to 12 percent of their customer base on a longer period of time,” he said.

Still, Flickinger believes the real winners were Stop & Shop’s competitors. He said stores like BJ’s and Costco saw sales increase by 50-100 percent during the strike, as did independent chains like Market Basket and Big Y. Whole Foods, he estimates, saw a 20 percent uptick in business.

Flickinger said Dave’s Marketplace likely doubled their business during the strike, particularly Dave’s locations close to Stop & Shop stores.

Susan Budlong, a spokeswoman for Dave’s Marketplace, confirmed that all of their locations experienced a bump in business during the strike.

“The strike pushed some neighbors out of their shopping comfort zones and it would be our hope that some continue to visit us and support local business,” she said, adding that she hopes other local grocers saw a boost in business, too. “We are happy the strike has been resolved, and that the Stop & Shop workers – especially Rhode Islanders – can get back to work.”

Normally, Flickinger said, competitors like Dave’s would have had to spend a “mountain of money” to get a boost like they received during the strike. Meanwhile, for those who normally frequented Stop & Shop, getting back into their normal routine post-strike might take some time.

“It deterred me,” Depetrillo said before walking into Dave’s. “I went out of my way to support them. Enough is enough now. I’m glad it’s over. I want to go back to Stop & Shop.”