When employees of Stop & Shop, a northeastern United States grocery chain, went on strike in 2019, they effectively shut down 249 stores in Massachusetts, Connecticut, and Rhode Island for 11 days, forcing consumers who regularly shopped there to buy their groceries elsewhere. Meanwhile, Stop & Shop workers in New York and New Jersey had their contract extended, keeping their stores open.
For Julia Levine, an assistant professor at Johns Hopkins Carey Business School, the strike offered an ideal case study for examining consumer behavior and addressing a vital question. “Grocery shopping patterns have shown that people tend to go to the same stores over and over — but does that reflect their true preference or is it simply habit?”
The answer matters, she says. “If store owners know you can get customers to stick around through inertia, they could potentially attract new customers through temporary price promotions and then hike prices once these customers are ‘regulars.’”
There are also implications for labor leaders. “The lessons learned from the S&S strike can also help characterize the costs of labor stoppages, and supply disruptions more generally,” notes Levine. She recently collaborated with Sylvia Hristakeva, an assistant professor of marketing at Cornell, on a working paper that quantifies the fallout from the grocery chain strike: “Stopping Shopping at Stop & Shop? How Temporary Disruptions Affect Store Choice.”
The duo’s key finding is bad news for grocery chain owners who shut down due to labor strikes or supply disruptions. “We found that shoppers who were ‘displaced,’ i.e. who those who planned to shop at Stop & Shop but couldn’t during the strike, saw a 9.8% decrease in trips to Stop & Shop after the stores reopened,” says Levine. “That’s a substantial decrease that persisted — with some small attenuation — for the four months of our study period after the strike resolved.”
The power of forced experimentation
To conduct their study, the researchers drew on data supplied by Numerator, a market research and consumer intelligence company that collects data about what people buy, where they shop, and how their purchasing behavior changes over time. In their analysis, the duo analyzed shopping behavior among regular Stop & Shop shoppers and shoppers at competitor stores (the control group), in both the striking and non-striking states.
“The strike received national coverage, with stories about Stop & Shop threatening to cut benefits and roll back worker hours, so it’s very plausible that shoppers in New York and New Jersey were aware of what was happening,” says Levine. “We wondered if there were any reputational effects of the strike: Might socially conscious consumers in those states be deterred from shopping at Stop & Shop out of solidarity to employees?”
The answer turned out to be no. Shoppers in the non-striking region didn’t adjust their shopping patterns during the strike. “This suggests that heightened awareness of employee-firm tensions was not enough to shift visits,” write Levine and Hristakeva in their paper.
In the striking states, the researchers found that the effect of the strike displacement was larger for households that tried out a new shopping venue during the strike. “The strike forced experimentation, and households that discovered a viable alternative were less likely to come back,” Levine observes.
A strike’s ripple effects
Levine, whose research interests lie at the intersection of marketing and public policy, believes the central finding of their study has implications for the economic costs of supply disruptions.
She notes that in 2023 the United States saw a surge in labor stoppages, with 33 major strikes setting a 20-year record, according to the Bureau of Labor Statistics. While much study has been devoted to the immediate impact that strikes have on firm output and valuation, Levine says, the post-strike effects on consumer demand are less understood.
Do customers return once normal operations resume? Or do temporary disruptions cause lasting shifts in demand?
“Our findings suggest the latter: a single missed visit reduces subsequent patronage by nearly 10%, suggesting that firms assessing the costs of a work stoppage must account not only for lost sales during the strike but for the persistent drop in patronage that follows,” she said.
For public policy leaders intent on protecting workers’ rights, Levine says, the takeaway is clear, “If you are really about giving workers leverage, you need to protect their right to strike.”
