Union official: Latest Acme closings a troubling 'pattern'

Originally published Sept. 7, 2012

Plans to close three more Acme supermarkets in the region were greeted grimly Thursday by a top union official representing clerks employed by the embattled chain, whose corporate parent announced the cost-cutting moves a day earlier.

Underperforming stores in Sharon Hill, Morrisville, and Glassboro are among 60 to be closed in the months ahead by Supervalu Inc. of Minnesota. The move follows the firing of Supervalu's previous chief executive a few weeks ago and parallels ongoing efforts by the debt-saddled corporation to find a buyer for its retail chains and wholesale-distribution business.

Many of the estimated 90 to 150 unionized workers at the three Philadelphia-area Acme Markets stores could be transferred to other stores, but at the expense of personnel at surviving stores whose hours would be reduced to accommodate them, said union leader Wendell Young of United Food and Commercial Workers Local 1776.

More broadly, though, Young was alarmed by what the store closings symbolize for a company that has been contracting through closings and layoffs for several years, and whose turmoil has only further intensified in recent months.

"This is a pattern that companies get into when they're in their final stages," said Young, whose union represents workers at Sharon Hill. UFCW Local 1360 in South Jersey represents clerks in Glassboro and Morrisville.

"This really worries us," Young said in a telephone interview from Charlotte, N.C., where he was attending the Democratic National Convention.

He pointed out that Supervalu had been trawling for buyers while also being so tight for cash that it is hardly reinvesting in local stores. Meanwhile, Acme is battered by competitors such as Wegmans, Giant, and Shop Rite.

Of particular concern, Young said, was the prospect that the company or its divisions would be acquired and then either dismantled or its parts spun off - a scenario he described as "the worst thing" for employees in the area.

He said formal contract talks with Supervalu that began after Local 1776's contract expired in February had been halted since the company told shareholders in June it had launched a search for a potential buyer of the $36 billion corporation, which carries $6 billion in debt.

In a note to investors Thursday, analyst Jonathan Feeney of Janney Montgomery Scott described newly installed CEO Wayne Sales' store-closing decision as an "opening salvo," and a "first act as turnaround chief." Sales had been board chairman before being named to replace Craig Herkert earlier this summer.

Feeney said that of all of Supervalu's vast holdings, he believed those with the greatest value were Acme Markets, the Jewel-Osco supermarket chain in Chicago, and the company's wholesale food-distribution division.

"It is unlikely that Supervalu, as it is currently comprised, can find a buyer," he wrote.

The 60 store closings - which include 22 Save-A-Lot stores (none local) - were expected to generate $80 million to $90 million in savings over three years.