2015-07-24 / Business
Haggen’s cost-cutting moves frustrate longtime employees
Store struggles to compete with local supermarkets
Three months after Haggen Inc. took over a handful of Albertsons and Vons grocery stores in Ventura County, the Washington based company has laid off dozens of employees in the area and cut the hours of many more as it struggles to compete with other supermarkets.
Earlier this year Haggen acquired 146 Albertsons, Vons, Pavilions and Safeway stores in California, Nevada, Arizona and Oregon. Three were in Simi Valley and one each in Camarillo, Thousand Oaks, Newbury Park, Westlake Village, Oxnard and Ventura.
The chain’s challenge has been to “establish and grow the brand in competitive new markets,” Haggen CEO Bill Shaner said in a statement released last week.
“To ensure we’re operating as efficiently as possible, we have made the difficult decision to temporarily cut back on staffing at our stores,” Shaner wrote.
Brian Gabler, Simi Valley’s director of economic development, said Haggen hasn’t officially notified the city of any specific stores affected by layoffs or hour reductions.
But at one location, 2800 Cochran St. in Simi Valley, a total of 23 employees—including baggers, deli and bakery workers— have been laid off since last week and the hours of several full-time employees were cut.
Simi Valley resident Cecilia Ramirez, 34, was one of those laid off. Hired by Albertsons in December 2013, she lost her job July 6.
“Haggen told us we were going to have competitive prices, especially because of where we were located, with Ralphs down the street and a Walmart and Target across the street from the Sycamore Drive location,” she said.
But since the store was rebranded in April, she said, many customers expressed their disappointment with the prices.
“At least two women I would see every week stopped coming,” Ramirez said. “I talked to one of the ladies about a week ago and she told me straight out the prices were just too high.”
Kris Ellenberg, a Haggen spokesperson, said the company does regular competitive checks to ensure prices are “fair and reasonable.”
With layoffs rumored to continue to the tune of nine baggers in each California store, Ramirez said, the customers are the ones suffering.
“Haggen is going about this in the wrong way because they should’ve lowered the prices instead of cutting all those people,” the former employee said.
“Even though we’re just baggers, (Haggen) is losing the customer service because it’s already a ghost town and people aren’t shopping here. The few who do continue shopping there won’t be attended to right.”
One current Haggen employee, who spoke on condition of anonymity due to fear of losing his job, told the Acorn he earns about $1,600 less a month since his full-time hours were cut to 24 hours per week.
“It’s ridiculous what’s happening because Haggen is getting rid of full-time employees, and the way they did it is completely unethical,” the man said. “They laid off 800 baggers companywide. The prices are extremely high, and they’re not . . . advertising to bring customers in.”
The employee, who was hired by Albertsons 41 years ago, said he’s not the only one in a tough spot.
“There’s a guy in the dairy department who has two girls at UCLA, and he’s going to have to mortgage his house,” he said. “I’ve been in the business a long time with no problems whatsoever, and then they come in and lay off all these local kids.”
In his store at least five employees have had their hours reduced, and workers no longer get extra pay for Sundays, he said.
“We can’t understand what’s going on,” the man said. “Are they intentionally keeping prices high to get rid of high-priced employees?”
Ellenberg declined to comment on the reduced staff hours and loss of extra Sunday pay.
“We’re . . . focused on working through this transition with store teams and leadership,” Ellenberg told the Acorn this week.
The Haggen employee who spoke on condition of anonymity said the United Food and Commercial Workers Local 770 has filed a grievance against Haggen for breach of contract with its full-time employees.
UFCW Local 770 represents 30,000 retail workers in grocery stores, pharmacies and laboratories, as well as barbers and beauticians.
As of press time Thursday, the UFCW did not return several calls for comment.
Meanwhile, Albertsons filed a lawsuit in federal court against Haggen last week accusing the grocer of fraud. Albertsons alleges the company refused to pay $41 million for grocery inventory at 38 of the 146 acquired stores.
Haggen officials said they notified Albertsons last month of certain violations under its purchase agreement—the details of which have not been disclosed— and contend the lawsuit is just a response to that notification.
“(We) had hoped that the parties could amicably address these issues,” a company statement read. “It is unfortunate that Albertsons has chosen to file what appears to be nothing more than a strike suit addressing its wrongful conduct.”