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NEW YORK - Safeway, Inc. and Giant Food Stores, a U.S. unit of Dutch rival Ahold, narrowly averted a strike yesterday when a majority of their workers ratified a new contract for the Baltimore-Washington area, according to a Reuters report.
Officials said the new four-year contract would cover some 30,000 workers employed by Safeway and Giant Food. The ratification by members of the United Food and Commercial Workers Union came amid growing fears that the grocers' demand for workers to shoulder a larger share of their health care expenses could cause them to reject the deal.
Under the agreement, however, union and company officials said the grocers agreed to increase funding for employee pension plans, as well as provide hourly wage increases that average from 30 to 35 cents per year for most employees, who include deli workers and meat cutters.
For its part, the union said it agreed to a different health care system in which the grocers would reduce their spending on benefits for new hires for a six-year transition period.
"The objective of these negotiations was to design ways of managing labor costs in response to the changing competitive realities of the retail food industry," Harry Burton, chief negotiator for Giant Food and Safeway, said in a statement.
Greg Denier, a UFCW spokesman, said the union had been prepared to call a strike if the final deal did not satisfy its members, according to the Reuters report.
"The companies came to the table with an entirely different attitude," said Denier, whose 1.4 million-member union was the force behind a recent almost five-month-long supermarket shutdown in Southern California over health care.
Unionized grocers, like Safeway and Giant Food, have made cost control a priority this year to better compete against nonunionized megachains such as Wal-Mart Stores, Inc., which is now the dominant player in the $775 billion U.S. groceries industry.