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Acme to lay off about 900 part-time workers

Acme Markets announced Thursday that it is laying off about 900 of the 14,000 employees at its 117 stores in and around Philadelphia, South Jersey, Delaware and Maryland.

Dan Sanders, president of Malvern-based Acme, a division of Supervalu Inc., informed union leaders Thursday morning and sharedthe news with employees around lunchtime through satellite broadcasts to stores, Sanders said.

The layoffs will take effect May 7 and involve only part-timers, mostly those who work 12 to 16 hours a week, the company said.

The decision comes two weeks after Eden Prairie, Minn.-based Supervalu, a multibillion-dollar corporation that has been struggling for some time, reported that sales in the last quarter fell once again at its supermarket chains in the Northeast, a portfolio that includes Acme.

"Unfortunately, we have more associates than we need to serve our current level of sales, and we must take immediate action to change our business," Sanders said in a statement issued by Supervalu.

The union taking the single largest hit is United Food and Commercial Workers Local 1776, which represents members in Southeastern Pennsylvania, where Acme has a major presence. Four hundred of the 900 targeted jobs are from 1776, said union president Wendell Young IV.

"This is going to affect all of our members that work at Acme," Young said.

The workers being laid off have the least seniority, with two years or less. Those remaining on the payroll will be asked to work new shifts to fill in for the mostly nightside and weekend positions being eliminated. The company said it had no plans to add overtime hours.

"We're obviously not happy with the direction Supervalu and Acme have been going in for a long time," Young said. "I hope and support any efforts to try and build sales and market share so we can get back to a better place by recalling laid off people and resuming other people's schedules so that there's not as much of a disruption in their lives."

The layoff decision comes several months after management failed to persuade officials at one local union to offer voluntary buyouts to more veteran, and costly, workers. Such a move, according to management, would have freed up cash to lower prices on merchandise, which would then have helped draw customers back into stores and improve business.

At the time, Local 1776's Young, whose union represents workers in Southeastern Pennsylvania, said he was opposed to buyouts, in part, because of the way they would have jeopardized the company's already fragile health-and-welfare fund by creating a flood of withdrawals by new retirees.

But approving buyouts late last year was Local 1776's counterpart in South Jersey, UFCW Local 1360, whose workforce is more diverse in age and therefore did not have the same fears.

Sanders said the layoffs, which affect members of all local unions representing Acme workers in the area, were not connected to the buyout effort that failed to take hold with Local 1776.

The layoffs also follow Acme's January announcement that it was closing five underperforming stores in South Jersey and the Philadelphia suburbs by the end of February in yet another cost-saving effort.

"While eliminating positions is never easy, given the impact on our people, this was a necessary step for us to take," Sanders said. "Moving forward, we will continue to execute our plan and look for ways to further strengthen our business and reduce costs with the simple, strategic goal of ensuring Acme's competitiveness and long-term survival."

Battered by the arrival of newer supermarket competitors offering lower prices in recent years, Acme has lost customers and its once-unquestioned sales dominance year after year. It still clings by a slim margin to its lead spot in the region, in terms of most overall supermarket sales.

And yet, because its publicly traded parent corporation has been encumbered by billions of dollars in debt, as well as pressure to generate returns for shareholders, Acme has approached the task of reducing prices to win back customers with some difficulty.

In a January earnings report, Supervalu indicated that it lost $202 million. In its most recent earnings report, filed April 14, the corporation said that it had $97 million in profits but that its overall net sales were $6.7 billion, a decline from $7.2 billion the same period a year earlier.

The corporation also owns the Save-a-Lot chain, with stores locally, and the Chicago area's Jewel-Osco, among others. It also has a wholesale grocery-supply business.