Grocery Stocks Rise on Hopes for End to Strike
Stocks of the supermarket chains in the Central and Southern California labor dispute rose Thursday as investors speculated that the long strike and lockout could soon end.
The shares of Safeway Inc., the parent of Vons and Pavilions; Kroger Co., which owns Ralphs; and Albertsons Inc. climbed 1% to 3% as the chains’ negotiators met for the ninth straight day with union officials and a federal mediator.
Negotiations were expected to continue today.
The companies and the United Food and Commercial Workers union are trying to reach agreement on a three-year contract that would end the strike and lockout that began more than four months ago, idling 59,000 workers at 852 supermarkets.
With the talks continuing, union and community activists kept up their protests of the firms’ effort to reduce the companies’ contributions to workers’ healthcare coverage, a key issue in the dispute.
More than two dozen protesters were arrested Thursday for briefly blocking entrances at four Vons stores in Los Angeles, Santa Monica, San Pedro and Mission Viejo, police and rally organizers said. The actions were part of a union-led campaign of civil disobedience to publicize the workers’ discontent.
The grocery stocks advanced on a day when the overall stock market edged lower; they had traded even higher earlier in the session before profit taking trimmed the gains.
“I believe the stocks are up today on hopes that the strike may soon be settled, as well as good numbers from Wal-Mart, which had double-digit same-store sales growth in food,” said Andrew Wolf, an analyst with investment firm BB&T; Capital Markets in Richmond, Va.
He was referring to grocery sales at Wal-Mart Stores Inc.’s locations open at least a year. The giant mass merchandiser cited the gain Thursday in announcing an 8% increase in its fiscal fourth-quarter profit.
Safeway’s shares gained 66 cents to $23.21. Kroger shares rose 32 cents to $19.25. Albertsons shares advanced 28 cents to $24.03. All three stocks trade on the New York Stock Exchange.
The UFCW struck Safeway on Oct. 11 after contract talks broke down. Albertsons and Kroger, which are bargaining jointly with Safeway, locked out their union workers the next day.
