The probe is "totally without merit," Johnston said. "These kinds of agreements are common and have been utilized over the years in our industry and other places."
In addition to the sales drop, Albertsons said the labor dispute eroded $70 million of its gross profit -- that is, profit before taxes, interest and other items -- in the quarter.
The size of the decline was surprising, said Mark Hugh Sam, an analyst with research firm Morningstar Inc. in Chicago.
But he noted that the three chains incurred expenses early in the dispute, such as costs for training replacement workers, that probably won't be as high.
Hugh Sam also noted that even with the $70-million decline, Albertsons' gross profit in the quarter was $2.5 billion. Albertsons and the two other chains still have plenty of financial heft to weather a longer strike and lockout, he said.
"The time is on the side of the companies, not the workers," he said.
--- UNPUBLISHED NOTE ---
On February 12, 2004 the United Food and Commercial Workers Union, which had stated repeatedly that 70,000 workers were involved in the supermarket labor dispute in Central and Southern California, said that the number of people on strike or locked out was actually 59,000. A union spokeswoman, Barbara Maynard, said that 70,000 UFCW members were, in fact, covered by the labor contract with supermarkets that expired last year. But 11,000 of them worked for Stater Bros. Holdings Inc., Arden Group Inc.'s Gelson's and other regional grocery companies and were still on the job. (See: "UFCW Revises Number of Workers in Labor Dispute," Los Angeles Times, February 13, 2004, Business C-11)
--- END NOTE ---