Lots of questions have been asked about the four-month-old Southern California supermarket strike-lockout, the longest in grocery- industry history. When will it end? Will labor avoid cutbacks? Will Kroger, Albertsons and Safeway wind up with a more level economic playing field with Wal-Mart as that retailer plans a supercenter entry in the state?
A question less explored is how Southern California consumers will respond once the strike is over. Will they return to their old stores, or permanently adopt shopping patterns that were altered by the job action? It's an important question for a strike that's been like no other.
This week, SN addresses that question through consumer interviews that appear on Page 16. The shopper feedback collected by reporter Elliot Zwiebach provides both good and bad news for supermarkets, and crystallizes how shoppers are making their decisions today about which stores to patronize.
The responses will be a shock for anyone who still believes consumers are influenced by traits such as idealism or loyalty. No one said they would permanently alter their shopping patterns out of sympathy with the cause of management or workers. "Strikes don't work anymore," one person said. Several were more upset over strike-related higher prices and out-of-stocks than about labor issues.
Shoppers expressed loyalty to self rather than supermarket. And self-interest often meant going for what's most convenient. "When the strike is over, I'll probably go back to Ralphs. It's a simple matter of geography and availability," said one respondent. A shopper who considers Trader Joe's her main store said about conventional supermarkets: "It doesn't make much difference to me which of the three chains I go to because I usually go to whichever is closest to where I am. I have no loyalty to any one store."
While a portion of shoppers said they would return to their primary supermarket after the strike, others made it clear that supermarkets may lose their business to outlets including Trader Joe's, Costco and Smart & Final. "I've found that going to Costco, I can get more for my money," said one shopper.
The prospect of losing shoppers to alternative formats has been one of the biggest dangers for chain management all along. Yet, management decided this strike was necessary to bring labor packages closer to those negotiated by non-union formats.
What can be concluded from all of this feedback? First, when the strike is over, supermarkets will definitely have lost shoppers to non-conventional operators. But given that loyalty is apparently such an unimportant factor and convenience is a priority, supermarkets will have a shot at getting the business back.
Keep in mind that the major supermarkets will inevitably unleash a barrage of price promotions the moment the conflict has ended, to improve their chances of recouping business. "There will be huge promotional endeavors, and you'll see a gradual migration back to the big three," Jonathan Ziegler, principal at PUPS Investment Management, Santa Barbara, Calif., told me last week.
Even if supermarkets succeed in reclaiming customers, they will still face the challenge of differentiating offerings to match the allure of Trader Joe's, Costco and other alternative formats. That's a longer-term issue, but the results of that effort will determine whether conventional grocers hold onto the consumers they win back.
