Stop & Shop management and local unions agree to tentative terms; Ahold Delhaize gives update on guidance following strike
Zaandam, the Netherlands, April 23, 2019 - Stop & Shop, an Ahold Delhaize company, announced a tentative agreement of terms with five local unions (UFCW Locals 1445, 1459, 919, 371, and 328) which allowed Stop & Shop's 31,000 associates in New England to return to work on Monday. The strikes had affected 246 of Stop & Shop's 415 stores and lasted 11 days, having started on April 11, 2019.
"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."
As a result of the strikes Stop & Shop estimates a one-off impact on underlying operating profit of between $90 - $110m, resulting from lower sales, increased shrink of seasonal and perishable inventory and additional supply chain costs. As a consequence, 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. We expect group free cash flow to be unchanged at around €1.8bn (IFRS 16 definition) for the full year 2019 due to the continued business strength of our other U.S. and European brands.
First quarter 2019 financial results are unaffected and in line with expectations, to be published on May 8, 2019. At that time, more details will be provided on the impact of the strikes at Stop & Shop.
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