Grocery pact set to expire Monday
The contract for about 65,000 Southern California grocery workers will expire Monday without a new agreement but also no immediate threat of a work stoppage, representatives of the three major chains and the United Food and Commercial Workers union said Friday.
Sources familiar with the talks said Kroger Co.'s Ralphs and the union were close to agreeing to extend the existing contract for a minimum of two weeks.
Continuation of negotiations will for now forestall fears of the type of strike and lockout that created chaos out of grocery shopping when the previous pact expired in late 2003.
An agreement with Ralphs to extend the contract is expected to be a pattern for similar deals involving all seven union locals in the region and Supervalu Inc.'s Albertsons chain and Safeway Inc.'s Vons and Pavilions -- the two other major employers.
But any extension could be scuttled by a last-minute dispute over whether any wage increases in a new contract would be retroactive to Monday, said the sources, who requested anonymity because of the sensitivity of the talks.
Both sides report that there have been few substantive negotiating sessions in advance of the contract expiration, as the employers and the unions remain locked a wary dance over the structure of the talks.
The union locals are attempting to join together to conduct separate talks with each major chain. The supermarkets, however, want to bargain as a group, following the pattern of previous years. Barring that, they are insisting on negotiating individually with each local, which creates 21 separate sets of talks.
“The employers are committed to sitting down at the table and reaching an agreement,” said Adena Tessler of Rogers Group, a Century City public relations firm hired by the major chains to speak about the talks.
The current contract created a dual scale that pays lower wages to new hires and mandates longer waiting periods for them to qualify for health insurance. Veteran employees held on to their wages and most of their health benefits. But instead of raises, they received a series of bonus payments that lacked the compounding effect of annual percentage increases.
“The talks are cordial, but no progress has been made,” said Greg Conger, president of union Local 324 in Buena Park. “We need to start talking about the hard issues such as health benefits, wages and the two-tier system and get them ironed out. There is no reason why we can’t do that.”
In the negotiations three years ago, the major chains sought to drive down labor expenses so they could better compete with discounters and warehouse retailers such as Costco Wholesale Corp., Wal-Mart Stores Inc. and Target Corp. -- chains that were moving heavily into food retailing. And the traditional grocers say they are under similar pressure again this year.
“Competition will get even tougher over the next few years,” said Dave Hirz, president of Ralphs, in a conference call with reporters last week. He said 80% of Ralphs’ 262 stores in Southern California were located within five miles of a Wal-Mart.
This year, the union has signed agreements with Colton-based Stater Bros. and Encino-based Gelson’s, which together have about 12% to 15% of the Southern California market, according to industry estimates. The major employers, by comparison, hold more than 50%.