Vons Income Up 33.6%; UFW Boycott Ended

Profit was on an upswing and controversy began to slip Wednesday for Vons Cos., Southern California’s largest supermarket chain.

Continuing a recovery that began in late 1989, the 320-store, Arcadia-based chain said its first-quarter profit jumped 33.6% to $20.3 million despite sales that inched up only 1% to $1.22 billion.

Separately Wednesday, the United Farm Workers announced that it will end its 10-month boycott and picketing campaign against the firm.

Vons’ income before accounting adjustments for past operating losses rebounded even more sharply than its net profit, climbing 54.9% to $12.7 million.

The company’s results were somewhat better than most analysts expected. Gary M. Giblen, an analyst with Paine Webber, attributed Vons’ improvement partly to expense controls.

He also cited the strength of sales at Vons’ deli counters, bakery departments, salad bars and other specialty departments--all of which provide relatively high profit margins.

In a news release, the company said its improved operating performance is paving the way for new initiatives, such as its “densing up” program. That program, launched quietly late last year, involves adding shelves and expanded freezer cases in the company’s supermarkets in an effort to boost sales without expanding the stores.

Vons lost money for a year after its August, 1988, acquisition of 162 Safeway supermarkets in Southern California for $408 million. Its profits, however, have climbed steadily since the fourth quarter of 1989, benefiting from the closing of weak stores, reduced buying and interest costs, consolidated administrative operations and the meshing of the two chains’ computer systems.

The UFW began its dispute with Vons last June when it asked the company to stop selling California table grapes. The UFW alleged that pesticides used in growing the grapes were causing poisonings and deaths in farm workers who labored in the vineyards and birth defects in some of their children, UFW President Cesar Chavez said.

In ensuing months, the UFW staged a series of sporadic demonstrations at Southern California Vons and Tianguis markets, also owned by the Vons Cos. Two weeks ago, Chavez said, the UFW agreed to stop its picketing and boycott of Vons, and Vons agreed to stop advertising and promoting table grapes in the store, through the media or in the mailings.

“It’s a very great thing for us,” Chavez said.

Vons had a more subdued response to the settlement, which the UFW announced at an evening press conference in Los Angeles.

“Given the controversy surrounding the issue, Vons notified the UFW of our intention to not advertise grapes, although we still intend to carry grapes of all types in all stores,” said Mary McAboy, Vons spokeswoman. “With this notification, the UFW ceased their boycott of Vons.”

In trading on the New York Stock Exchange, Vons’ stock closed Wednesday at $31.625, up 12.5 cents.

Vons’ stores operate under the names Vons, Pavilions and Tianguis. The company also operates the Jerseymaid dairies and ice cream plant.