The slowing economy is spawning store closures and layoffs in Southern California's typically solid grocery industry.
On Friday, Albertsons will shutter the first four of nine stores closing between now and April 9. About a dozen workers are losing their jobs and the chain is working to reassign hundreds more to other stores.
Ralphs is demoting more than 150 meat cutters to clerks, slashing their pay by more than a third to $13.47 an hour.
Vons has fired 97 workers this year, including 21 last week, and is reclassifying almost 200 full-time workers to part time, a move that could slice their earnings by as much as 40%
The moves are an effort by the mainline grocers to retrench and maintain sales as cash-strapped consumers migrate to Wal-Mart and other discounters to save money, said Andrew Wolf, an analyst at BB&T Capital Markets in Richmond, Va.
"The problem is that people are not buying anything but the basics, and the grocery industry is hurting," said Rick Icaza, president of UFCW Local 770 in Los Angeles.
About 1,000 of the region's more than 70,000 union grocery workers have been hurt by the combination of staff, wage and hourly reductions, estimated Greg Conger, president of UFCW Local 324 in Buena Park.
The Albertsons store closures are part of a strategy by corporate parent Supervalu Inc. of Eden Prairie, Minn., to trim underperforming stores.
"We're always evaluating our stores to identify opportunities to strengthen our overall business and, when necessary, close stores that are not meeting our goals, to help us operate more efficiently and effectively within this highly competitive retail marketplace," said spokeswoman Stephanie Martin.
After the closures, Albertsons will have 275 stores and about 26,000 union workers, she said. On Friday, Albertsons stores in Lakewood, Canoga Park, Chula Vista, Calif., and Encinitas, Calif., will close. On April 9, Albertsons will also close stores in San Diego, Cathedral City, Lancaster, Rancho Cucamonga and Temple City.
The company also plans to change the nameplate of its South Gate store to Lucky Stores, a brand it acquired in 1998 and then converted to Albertsons. But now it is starting to rebuild Lucky as a low-price chain. This would be just the fourth Lucky store in California. The others are in El Centro, San Ysidro and Alhambra. An Albertsons store in Van Nuys and one in Oxnard also are slated to eventually become Lucky stores.
