As the grocery industry grapples with ongoing concerns about high food prices, Stater Bros. Markets said ongoing inflation is one of the key reasons why the chain recently conducted layoffs.
The company’s announcement in mid-February that it eliminated 63 jobs across four stores to offset the cost increase on goods by reducing the costs of operations, CEO Peter Van Helden said in a video to employees reviewed by Grocery Dive, noting this will allow the company to avoid raising grocery prices further for consumers.
All of the layoffs impacted the courtesy clerk role, Helden said.
Stater Bros. did not respond to a request for comment on the layoffs.
“I know it's impactful to everybody when they hear the word layoff, especially because in this company. We've never done this before. We've never had a layoff,” Helden said.
“Stater Bros.'s layoff of courtesy clerks is just going to exacerbate the understaffing issue in the stores and the industry as a whole,” United Food and Commercial Workers Local 324, which represents the chain’s unionized workers, said in a Facebook post last week.
Retail prices are about 30% higher than they were four years ago, leading customers to cut back on their spending and buy fewer items, Helden said, noting that a dozen eggs, for example, costs approximately $4 more than a year ago. While the company saw inflation soften last summer, it has risen during the last four months. In January, food-at-home prices rose at a 1.9% annual rate, while overall inflation increased 3%.
Stater Bros. raised its food prices over the years due to inflation, but that alone is no longer enough to keep the business healthy, particularly with the prospect of new tariffs, Helden said.
“With the recent announcements of new tariffs and probably more tariffs to come, it's quite likely that inflation is going to take off even above the 4.5% we're seeing now,” Helden said. “I’m very worried about that.”
Lower price rivals are winning over price-sensitive consumers partly because they are not unionized, Helden said.
“They pay their teammates less, they pay less benefits, and they take that savings and they plow it into pricing. … The enemy for you, I think, is the non-union competition,” Helden said, noting that 90% of Stater Bros.’ workforce is unionized.
The company is also looking at increasing its solar energy usage and cutting its corporate workforce to further reduce costs, Helden said.
“I'm pretty certain that, in the future, we're going to have to continue to reduce the number of jobs in this company,” Helden said.
The grocer operates 169 supermarkets in Southern California.
