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Kroger-owned Ralphs Grocery Co. announced yesterday that it will shutter 15 under-performing southern California stores. The company said the closings are not related to the just-completed four-month strike/lockout.

The affected stores are in Anaheim Hills, Bernardo Heights, Brea, Chino Hills, Chula Vista, Corona, Lawndale, Los Angeles, Oak Park, Orcutt, Pismo Beach, Rosemead, San Diego, Upland, and Westminster. The closings are to take place in the next 60 days.

"We are taking these steps after extensive and careful review," said John Burgon, president of Ralphs. "The closing of these stores is a difficult but necessary step toward a better, more competitive Ralphs in Southern California. None of these stores generates enough sales, nor has enough customers, to pay for the increasing cost of their operation. Closing these stores will help us operate more efficiently and position Ralphs for the next generation of growth by better serving our customers."

The 600 employees at the stores reportedly will be reassigned.

In a related story, the United Food and Commercial Workers (UFCW) union is estimating that between 12 and 20 percent of unionized employees who were involved in the strike/lockout have not yet returned to their jobs, though it remains to be seen whether they still have the ability to reclaim their positions from temporary workers.
KC's View:
The closings probably are just the first of a number of moves that we can expect to see in Southern California as Kroger, Safeway, and Albertsons take steps to build on whatever progress they feel they achieved with the labor negotiations.

Not only will these moves help them be more competitive in Southern California, but they will serve notice in other markets what can and will be done to meet the competitive pressures.