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Changing face of grocery industry one cause of Albertson's layoffs

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Updated: 6/08/2012 6:22 pm
LAS VEGAS (KSNV MyNews3) -- Albertson's announced just a few days ago that 2,500 employees in Nevada and California will be out of a job by July 1. But store owners aren’t sure which stores will be affected, and the question now is whether any of their locations will actually close – something the company says it doesn’t know yet.

The layoffs come in part due to increased competition -- low-priced shopping for those looking to save at Walmart, Winco, and Dollar General Market.

"Over the past several years you have more Walmart Supercenter's, Walmart Neighborhood markets expansion of Wynco coming into the area," said industry analyst David Livington .

Livingston says another reason for the downsize is that Albertson's -- owned by Supervalu -- pays its employees higher wages than cheaper competitors.

“I believe these stores are unionized and their wage scale is much higher than what you're going to see at a Walmart," Livingston said.

Albertson's spokesperson Mike Siemienas recognizes the competition.

"The grocery industry is extremely competitive between the traditional grocery stores, the big box grocery stores and the value stores," Siemienas said.

The layoffs, he says, partially goes back to market demand. He says Albertson's has fewer customers compared to several years ago.

"While the division has experienced a reduction in traffic and overall decline in sales, it has not made the necessary adjustments to its store level operations," Siemienas said.

Loyal shopper Veronica Llopis prefers to shop at Albertsons compared to other value markets across the street.

"The people are nice, the variety is nice, it's convenient, it's close and they have great deals," Llopis said.

She worries, however, that fewer workers could lead to less customer service.

"It's going to make it very difficult to find anything because they're not going to have the employees to service the shelves and service the customers," said Llopis.

Livingston anticipates that more layoffs or even store closings for Albertson's could happen down the road with all of the other local competition. He also says other grocery chains such as Safeway, which owns Von's, could face less revenue in the future as well.

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