red states rule
12-19-2010, 06:21 AM
Another example on how unions kill companies
The grocery industry is a highly competitive industry and, as so often is the case, those businesses that are saddled with extraordinary obstacles falter.
On Sunday, the 151-year old Great Atlantic & Pacific Tea Co., once the nation’s largest grocery chain and current operator of 395 grocery stores with 41,000 employees, filed for Chapter 11 bankruptcy. With $1 billion in debt, the company has struggled in recent years and has lost market share, making the bankruptcy filing all the more likely.
A&P, like most grocers, is struggling with the weak economy, reduced spending by consumers and intense competition. The company said aggressive competition from nontraditional food retailers like warehouse clubs, discount chains such as Wal-Mart Stores Inc., and dollar stores have compounded the problem.
The company reported revenue of $9.5 billion in 2008, which fell to $8.8 billion in 2009. And while the 2010 fiscal year is still under way, in its most recent quarter A&P reported that its net loss had doubled as revenue continued to sink.
It is also struggling with pension costs, lease costs for store locations it has closed, and a contract with C&S Wholesale Grocers Inc., which provides the majority of its inventory, which it has been unable to negotiate down to lower costs.
A&P also has one of the most heavily unionized work forces in the business, with 95 percent of its workers covered under collective bargaining agreements. It said in its filing it would seek to work with the unions to lower those costs
http://www.redstate.com/laborunionreport/2010/12/13/the-cost-of-unions-the-great-atlantic-pacific-tea-company-files-for-bankruptcy/
The grocery industry is a highly competitive industry and, as so often is the case, those businesses that are saddled with extraordinary obstacles falter.
On Sunday, the 151-year old Great Atlantic & Pacific Tea Co., once the nation’s largest grocery chain and current operator of 395 grocery stores with 41,000 employees, filed for Chapter 11 bankruptcy. With $1 billion in debt, the company has struggled in recent years and has lost market share, making the bankruptcy filing all the more likely.
A&P, like most grocers, is struggling with the weak economy, reduced spending by consumers and intense competition. The company said aggressive competition from nontraditional food retailers like warehouse clubs, discount chains such as Wal-Mart Stores Inc., and dollar stores have compounded the problem.
The company reported revenue of $9.5 billion in 2008, which fell to $8.8 billion in 2009. And while the 2010 fiscal year is still under way, in its most recent quarter A&P reported that its net loss had doubled as revenue continued to sink.
It is also struggling with pension costs, lease costs for store locations it has closed, and a contract with C&S Wholesale Grocers Inc., which provides the majority of its inventory, which it has been unable to negotiate down to lower costs.
A&P also has one of the most heavily unionized work forces in the business, with 95 percent of its workers covered under collective bargaining agreements. It said in its filing it would seek to work with the unions to lower those costs
http://www.redstate.com/laborunionreport/2010/12/13/the-cost-of-unions-the-great-atlantic-pacific-tea-company-files-for-bankruptcy/