Ahold Delhaize-owned Stop & Shop’s 11 day strike has finally come to an end, affecting 246 out of its 415 stores and having started on April 11, 2019. The company announced a tentative agreement of terms with five local unions, which allowed Stop & Shop’s 31,000 associates in New England to return to work on Monday.
As a result of the strikes, Stop & Shop estimates a one-off impact on underlying operating profit between $90 million to $110 million, resulting from lower sales, increased shrink of seasonal and perishable inventory, and additional supply chain costs.
“I am pleased that Stop & Shop’s management and the five local unions have tentatively reached a fair and responsible contract in which all Stop & Shop associates are offered pay increases, eligible associates have continued excellent health coverage, and eligible associates have ongoing defined benefit pension benefits,” said Frans Muller, CEO of Ahold Delhaize. “I know that both Stop & Shop management and its associates are proud to welcome customers back and look forward to taking care of them every day.”
According to the company’s press release, as a consequence of the strikes, Ahold Delhaize now anticipates underlying operating margin for the group for 2019 to be slightly lower than 2018. Additionally, the percentage growth of underlying earnings per share in 2019 is revised from high single digits to low single digits. The company expects group free cash flow to be unchanged at around €1.8 billion ($2.0 USD) for the full year 2019 due to the continued business strength of its other U.S. and European brands.
The first quarter 2019 financial results are unaffected and in line with expectations and are slated to be published on May 8, 2019. At that time, more details will be provided on the impact of the strikes on Stop & Shop.
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