May 3, 2016

El Super Reports 5th Consecutive Quarter with a Decline in Customer Traffic Since Start of Union Initiated Consumer Boycott

—Negative El Super sales coincide with Formal Settlement Agreement with US Government ordering company to furnish information and bargain in good faith with UFCW —

Los Angeles— Grupo Comercial Chedraui – the parent company of El Super grocery stores in the U.S. – has reported another quarter of disappointing sales growth. The company’s growth performance has been weakened by negative same store sales (SSS) in its El Super grocery store segment as reported over the past year, a period which coincided with the consumer boycott in the U.S. Same store sales at El Super stores in the U.S. declined for the fifth consecutive quarter since El Super workers and their union, UFCW, launched a consumer boycott of the grocery chain in December 2014.  The Boycott was targeted at the Company’s unfair labor practices, its failure to negotiate in good faith and its failure to reach a fair agreement with its workers.

The El Super sales decline during the first quarter of 2016 is significant because the company added four new stores in the period just prior to the last 12 months. The four new stores—two opened in the 4th quarter of 2014, and one each in the 2nd and 3rd quarters of 2014. The first quarter 2016 new store benefit represents the largest new store boost to El Super’s SSS in more than a year. Inclusion of these new stores leads to an expectation that U.S. SSS growth would increase, not decline.

Recently available U.S. government data on labor hours during 2014 and 2015 at 17 El Super stores in California and Arizona, eight of which were subject to active pickets as part of the consumer boycott during 2015 and nine of which were not, reveals an interesting pattern. The data – maintained by El Super in compliance with the Occupational Safety and Health Administration (OSHA) – shows that El Super cut labor hours at all stores in our sample which were subject to active pickets in 2015, while hours for the non-picketed stores in our sample were relatively flat and showed no consistent pattern. El Super workers have reported some store managers blamed the consumer boycott for poor sales and resulting in the need to make cuts in hours, and further undermines the company’s denials that the boycott has had a negative effect on sales.

El Super Enters into Rare ‘Formal Settlement Agreement’ with U.S. Government to Resolve Charges it Violated Workers’ Rights

The Union has continued to seek to hold the Company accountable for its actions with respect to negotiations through all legal avenues.  The reporting of negative sales growth at El Super stores coincides with an April 28, 2016 ‘Formal Settlement Stipulation’ between El Super, UFCW unions that represent El Super workers, and the General Counsel of the National Labor Relations Board. A formal settlement contains a direct order from the National Labor Relations Board itself and is very rare. Consistent with NLRB law and policy the formal settlement can serve as evidence that El Super is a regular violator of labor law and that EL Super has a proclivity to violate the Act.

Under the terms of the Stipulation, El Super has been ordered to ‘cease and desist’ from:

(a) Failing or refusing to bargain in good faith with the UFCW regarding wages, hours and other working conditions of the employees

(b) Failing or refusing to provide UFCW with information that is relevant and necessary to their roles as the unit’s bargaining representative.

(c) Failing to timely furnish the Unions with information that is relevant and necessary to their role as the unit’s bargaining representative.

(d) In any like or related manner interfering with, restraining, or coercing employees in the exercise of their federal labor rights.

In connection with the Stipulation, the U.S. Government ordered El Super to:

(a) Bargain collectively and in good faith with the UFCW.

(b) Provide UFCW Local 770 with a seniority list for unit employees at its Arleta, California store that includes employees’ dates of hire, position titles, rates of pay, and whether they are classified as full-time or part-time.

(c) Provide the UFCW with the a seniority list for all unit employees that includes employees’ full names, last four digits of their social security numbers, hire dates, wage rates, seniority dates, and full-time/part time statuses.

El Super workers have been fighting to win a fair union contract from El Super since September 2013. The information the company was ordered to provide is essential to formulating contract proposals that address UFCW El Super members’ longstanding goals of winning fair pay and more guaranteed hours for full-time workers.

About El Super

El Super is managed by the Paramount, California, based Bodega Latina Corp. El Super’s business model focuses on serving first, second and third-generation U.S. consumers of Mexican descent. Grupo Comercial Chedraui (Chedraui) is Mexico’s third-largest retail chain with over 42,000 employees in 224 stores throughout the country. Through its 84.85% ownership stake, Chedraui controls California-based Bodega Latina Corporation, which does business as the El Super grocery chain. During 2015, El Super opened five new stores – bringing its total to 54 locations. It has 46 stores in California, five stores in Arizona, and three in Nevada.