Grocery wars in Southern California set precedent for nation

You want Trader Joe’s? You got it. Fresh & Easy? Sure. Target? Yep, there’s one that sells groceries. Food 4 Less or Vons? You can shop there, too.

There are scores of tiny meat markets and produce markets and independent chains that dot the landscape.

Burt Flickinger, an industry analyst with Strategic Resource Group in New York, watches the Southern California food market closely because L.A. sets the precedent for California, and California for the nation.

"The trend that Southern California is setting is a real retail renaissance for the independent chains: the Superior, El Super, Northgate, Vallartas, Super A, all of which are very good operators," he said.

One of those successful independents is Super King. It’s owned and operated by the Fermanian family. They have three stores, and 700 employees. The second location is on San Fernando Road in Glassell Park. That one used to be a Ralphs, so it’s big.

Store director Raffi Karayan counts off the prepared food menu:

"We have ceviche, we have pico de gallo, tabouleh — the most famous middle eastern vegetarian salad, we got avocado salsa, we’ve got Armenian chicken salad, everything for everybody," Karayan said.

He’s not exaggerating. There are shelves dedicated to every brand of tortilla imaginable across from stacks of Middle Eastern flat bread. In the produce section are pyramids of Japanese eggplant and wheelbarrow loads of Persian cucumbers. You can buy 3 pounds of peaches for 99 cents and frozen chicken drumsticks for 79 cents a pound. On a late Tuesday afternoon, all 14 checkstands are open — each with a dedicated bagger.

Super King general manager Daniel Barth says the Glassell Park store opened five years ago. Since then, customer traffic has grown 40 percent to about 35,000 customers a week.

"We opened with primarily Armenian and Hispanic shoppers. Hispanics from the immediate trade area, Armenians from the Glendale area. Because of our product offering we’ve seen that demographic broaden dramatically to include every single demographic represented in Los Angeles," Barth said.

Two hundred and sixty people work at the Super King in Glassell Park. None are unionized. A cashier can make up to $12 an hour, but only management has health care benefits.

"It’s no secret that in the retail food industry labor is 70 percent of your expense structure, so whatever things you can do to effectively use that expense, you’re going to be more profitable," said Barth.

Independent grocery chains, like Super King, make up nearly 60 percent of grocers in Southern California. Thirty years ago, it was 20 percent, and most were unionized.

"It’s going to be a tough road to hoe for the unions," said Jim Amen, who is the president of Super A Foods, another family owned, independent grocery chain in Southern California. His employees are in the union and have healthcare and pensions. He’s seen non-union markets, like Superior and Vallarta, pop up in predominantly Hispanic neighborhoods where some of his union markets have been for 40 years.

"Forty years ago they had everybody and they became fat and sassy, well, the ones and twos they became 35 and 40. A Superior had one store, they didn’t picket him and shut him down then, now they have 35 stores and the same for Vallarta and Cardenas, the same thing, they let them thrive. I’m not sure it’s too late now," he said.

Next time we visit the independent, and also unionized, Super A in Glassell Park.

This is the third part of a five-part series. For months, Ralphs, Vons and Albertsons have been chipping away at a new contract with the union for grocery store workers. Sometimes, the talks get nasty enough to raise the specter of the “Big Three” labor dispute of 2003, when 70,000 grocery store workers stopped working for four months. In the end, the workers kept jobs but lost pay. The stores won a new pay scale but lost customers. Eight years later, a repeat of that dispute could be a disaster for the supermarkets and their workers. We’ll look at why this week.