The owner of Stop & Shop on Wednesday said its second-quarter profits sank 18.2 percent mainly due to the 11-day labor strike in April that closed its New England stores.
Netherlands-based food retail giant Ahold Delhaize posted net income of $374.6 million, down from nearly $457 million in the year-ago period.
The company said the strike reduced operating income by approximately $100 million. The strike reduced net sales by $224 million, with an additional $121 million impact during the “recovery period” after the strike ended, the company said.
Just after employees went back to work in late April, Stop & Shop’s parent estimated an earnings impact of between $90 million and $110 million.
On Wednesday, Ahold Delhaize also said its online sales climbed 14.4 percent to $249 million in the recent quarter, but would have jumped 18 percent excluding the strike impact.
In total, the company reported sales of $18.3 billion during the quarter, up 1.5 percent vs. the second quarter of 2018.
“Although our results were impacted by the strike at Stop & Shop, our other U.S. brands continued their strong performance,” said Ahold Delhaize CEO Frans Muller, adding that the strike will not affect its second-half earnings results.
Employees went on strike in April, several months after labor negotiations broke down between the company the United Food and Commercial Workers (UFCW) union, which represents about 31,000 Stop & Shop workers in Connecticut, Rhode Island and Massachusetts.
At issue were healthcare and pension benefits, wages, and weekend and holiday pay, among others items.
The April 11 to April 21 strike ended after unionized workers agreed to a new three-year labor pact on Easter.
UFCW at the time called the agreement a “powerful victory” thanks to new labor terms providing wage increases for current employees, and preserving healthcare and retirement benefits and time-and-a-half pay on Sunday. Many details of the deal, however, have not been revealed.
