SAN FRANCISCO - Three major grocers and the labor unions representing workers in hundreds of stores in the Bay Area have agreed to a new contract, ending months of discord and avoiding another costly supermarket strike in California.
The tentative truce, announced Monday, comes nearly 11 months after the same three grocers - Kroger Co., Albertson's Inc. and Safeway Inc. - settled a prolonged Southern California strike that left deep financial scars.
The contract, affecting about 30,000 workers, includes compromises by both sides, said Ron Lind, a spokesman for the United Food and Commercial Workers Union.
The deal doesn't include two major concessions the unions agreed to in Southern California - a two-tiered wage system lowering the pay scale of future workers and health insurance premiums partially funded by the store workers, Lind said.
But newly hired workers will have to spend more time on the job before getting raises under the contract, Lind said. The union scheduled a Monday afternoon press conference in San Jose to discuss the additional details of the contract, which still must be approved by the workers. A vote is expected to held within three weeks.
The workers in dozens of other Northern California stores - mostly in the Central Valley - approved a similar contract earlier this month.
Both Pleasanton-based Safeway and Boise, Idaho-based Albertson's released statements saying they were pleased with the Bay Area agreement. A Kroger representative didn't immediately return calls.
The stocks of the nation's three largest grocers all rose during Monday's afternoon trading. Kroger's shares gained 25 cents to $17.06 on the New York Stock Exchange, where Safeway's shares climbed 32 cents to $18.69 and Albertson's increased 6 cents to $22.53.
Many of the issues in the San Francisco Bay area negotiations mirrored those that triggered the Southern California strife, with labor leaders vowing to fight management's push for wage-and-benefit concessions as talks began five months ago.
As both sides dug in their heels, another strike in the Bay Area seemed possible, although neither side could seem to afford a repeat of the heavy losses in Southern California.
Safeway - the focal point of the Southern California strife - so far has reported $320 million in losses from that dispute and fears the continued aftershocks could cost about $180 million this year. About 15,000 of the 70,000 workers involved in the 4 1/2-month-long Southern California strike either never returned to their jobs or quit after the settlement.
Bay Area labor leaders had promised a "major escalation" of their protests against the supermarkets if significant progress on a new contract hadn't been made by Monday. The agreement was reached early Monday morning after 15 consecutive days of marathon negotiations, Lind said.
The supermarkets have been determined to lower their labor costs so they can afford to lower their prices to fend off tougher competition from discount merchants, such as Wal-Mart Stores Inc. and Target Inc., that have been expanding their grocery selection.
Safeway, for instance, says it spends an average of $8.59 per hour more on its unionized employees than its nonunion competitors. Unless that disparity is narrowed, Safeway Chairman Steve Burd has said the supermarket's survival will be imperiled, particularly as Wal-Mart gears up to open 40 super-sized California stores brimming with groceries.
Labor leaders maintained that the grocers are exaggerating the Wal-Mart threat to squeeze out more profits at the expense of store workers.