1. Apollo Global Management seeks to sell Heritage Grocers after mismanagement. 2. Cardenas Markets faces numerous lawsuits related to labor law violations. 3. Current labor disputes could deter potential buyers and affect investment decisions. 4. Heritage Grocers is seeing declining earnings and credit ratings amid increasing litigation. 5. Union organization efforts at Cardenas may complicate future operations.
FAQ
Why Bearish?
The ongoing labor disputes and legal issues significantly undermine Heritage Grocers' viability, creating a negative investment outlook similar to other firms facing similar turmoil.
How important is it?
The litigation and labor issues directly impact the financial performance and attractiveness of Heritage Grocers to potential investors.
Why Short Term?
Immediate potential buyers may hesitate to purchase due to existing labor risks, affecting short-term price dynamics.
Potential buyers of Heritage Grocers Group and its Cardenas Markets chain should do extensive due diligence on labor risks and an ongoing labor dispute with the United Food and Commercial Workers International Union, says the union that represents 1.2 million grocery, retail and food workers in the U.S. and Canada.
After years of mismanagement, Apollo Global Management (NYSE:APO) is reportedly attempting to sell Heritage, which operates 115 grocery stores under the banners Cardenas Markets, Los Altos Ranch Market, Tony's Fresh Market, and El Rancho Supermercado.
As a due diligence matter, prospective buyers should research growing litigation risks stemming from subsidiary Cardenas Markets' alleged violations of labor laws.
Currently, Cardenas Markets faces eight outstanding lawsuits alleging claims of sexual harassment, failure to prevent sexual harassment and retaliation for reporting sexual harassment.i Five of these cases were filed in 2025.
Cardenas Markets now faces three outstanding class action lawsuits alleging violations of break, pay and overtime provisions of California Labor Code.ii The company denies the allegations in all cases. Since 2023, Cardenas Markets has settled two class action lawsuits at a total cost of $4 million, without admitting wrongdoing.iii Allegations in the settled cases included pay and overtime violations, meal and rest break violations, and failure to provide seats for cashiers.
Prospective buyers should also know they are buying a labor dispute. Cardenas workers are organizing a union with UFCW. Workers have spoken up in dozens of public settings about their working conditions and have filed complaints with CalOSHA over working without air conditioning in desert heat.
As evidence of the extent of the labor dispute, Cardenas hired union buster People Results to run a barrage of anti-union messaging, including the website https://mejorjuntoscardenas.com/. Cardenas has even filed charges against UFCW Locals with the National Labor Relations Board.
The Cardenas labor dispute has escalated against a backdrop of Heritage's lower earnings, reduced credit ratings, and a consumer environment buffeted by inflation and changes to immigration policy, as noted by Moody's.iv
"Labor risks at Cardenas Markets and its parent Heritage Grocers are growing and should be evaluated by prospective buyers and lenders alike," says Courtney Alexander, UFCW researcher.
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i San Bernardino County Case Nos. CIVSB2409366, CIVSB2416006, CIVSB2431480, CIVSB2528084, Santa Clara County Case Nos. 25CV461110, 25CV471786, 25CV471784, 25CV471765 |
ii Los Angeles County Case No. 24PSCV01057, Santa Clara County Case No. 24CV438614, Riverside County Case No. CVRI2503737 |
iii Superior Court of California, County of Alameda, 22CV005906. County of Riverside, RIC-1905393. |
iv https://www.moodys.com/research/Moodys-Ratings-downgrades-Heritage-Grocers-CFR-to-Caa1-Rating-Action--PR_515720 11/17/2025. |
View source version on businesswire.com: https://www.businesswire.com/news/home/20251222290413/en/
Finn Storer
press@ufcw.org