Having overcome a threatened walkout of its store clerks, warehouse workers and truck drivers, and having survived the first round of layoffs in its 89-year history, San Bernardino-based Stater Bros. Markets is making a change at the top of its administrative and management echelon.
Peter Van Helden is leaving as the company’s CEO to take on the auxiliary title of executive chairman and will be replaced by Greg McNiff. The change was announced on September 10.
McNiff’s advancement is the second consecutive time that Stater Bros. has tapped a former Albertson’s executive managerial employee to over see the company’s day-to-day operations. McNiff began with Stater Bros. in 2019, coming in as the president of the board and being promoted by Van Helden to chief operating officer in 2022. Prior to that, he was the president of Albertson/Safeway’s Portland division from 2016 until 2019 and the senior vice president of marketing and merchandizing for Albertson’s/Von’s/Pavilion from March 2015 until January 2016, the vice president of marketing and merchandising for Albertson’s in Southern California from 2013 to to 2015 and the Senior vice president of operations of Albertson’s at its Fullerton office from 2010 until 2013. He began in management as a store director with Albertsons in Southern California in 1990 after having worked his way up the ladder after starting as bagger/courtesy clerk in 1981.
Van Helden has been the chief executive officer of Stater Bros. since April 2013. He was the executive vice president of SuperValu prior to that. He previously was employed by Albertson’s.
This spring, with widespread concern in the economy about rising prices due to the federal government’s levying of tariffs, Van Helden acted to lay off 63 of the company’s baggers/courtesy clerks as ongoing contract negotiations with the labor union representing Stater Bros. worker’s stalled. Those were the first layoffs in the company’s history.
Last month Stater Bros concluded a serious round of negotiations with the United Food and Commercial Workers, UFCW Local 324, the union that represents its 12,000 workers. On July 25, the company’s workers represented by UFCW authorized going on strike, but did not actuate a work stoppage. Stater Bros. made major concessions toward reaching an agreement, and the labor action was officially ended on August 15. The company gave way major ground to the union with regard to higher wages, benefits, pension contributions and job security, all of which were represented as favoring the workers. Questions remain, nonetheless as to the soundness of those guarantees if the company cannot avoid bankruptcy.
The bottom line in the supermarket industry is dictated by the magic number 3 – three percent. If a large-scale grocery retailer can realize a three percent profit, also referred to as a “gross margin,” meaning the difference from what the company brings in and what it pays out for everything, it can remain in business.
Whether McNiff can forge a better relationship with the company’s rank and file than Van Helden is an open question.
While stating that he was “not complaining about being unionized” and “I’m very proud that 90 percent of our workforce is unionized.” Van Helden said grocery companies that are unionized are challenged in maintaining the 3 percent magic number. “I’m proud of what we pay and I’m proud of the benefits that we offer, but it does cause us to charge more for our product.”
Stater Brothers is “fighting the nonunion competition,” Van Helden said. “The enemy for Stater Brothers is the non-union competition.” He said longtime Stater Brothers customers are going to the company’s competitors who feature lower prices. Those competitors employ a non-unionized workforce. “That’s how they sell their products at a lower price.”
Van Helden’s referenced a host of retail establishments that employ workers who are not members of the retail clerk’s union, such as Aldi, Grocery Outlet, Dollar General, Walmart, Sprouts and Target.
“They take that savings [on employee wages and benefits] and they plow it into pricing,” Van Helden said. “They have lower prices. That strategy for those nonunion players has really impacted this market.” The entire landscape for companies involved in grocery sales has changed in the last generation, he said. He pointed out that at the turn of the millennium in 2000, 90 percent of the state’s grocery stores were unionized, while at present, only 35 percent of the stores employ unionized workers.
Under normal economic conditions, Van Helden said, prices at unionized stores were only marginally higher than at non-unionized stores. But, he said, in times of accelerated inflation, unionized stores have to up their prices while non-union stores can hold the line on their prices. Thus, he said, “Inflation drives customers to the nonunion stores.”
“There is a substantial change in the market because customers have changed their shopping habits,” Van Helden said. “When inflation happens, there’s three things we can do as a company. One, we could just simply absorb the cost increases, do nothing and go broke. We’d be bankrupt. If we had not increased our prices 30 percent over the last four years, this company would not be here today. We have to move that price forward. The second thing we can do, which is what we’ve been doing, is accept the cost increases of the cost of goods, pass along those cost increases to the customers, [and] continue to do that. We’ve given up some items. But if this continues, it’s not going to play well for us. Over time, our sales will decline. We will have fewer customers. We’ll be selling fewer items, which will mean a reduction in hours and will mean layoffs. It’s inevitable if we don’t do something different. A third option is to say, ‘We’ll take the cost increases on the cost of goods, but rather than passing it along to the customer, let’s hold our prices, let’s not pass it along. That means instead offset that cost increase with a cost-of-operations decrease.”
Van Helden referenced labor, electricity, rent of the buildings the company occupies, and fuel as typical costs of operation.
The company was founded by Cleo and Leo Stater in Yucaipa in 1936, is now headquartered in San Bernardino and has has expanded to 171 stores to become the 26th largest grocery-store chain in the United States. Industry insiders suggested that the company is now on the brink of being sold or merged with another chain.