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NEW YORK - About 9,000 workers at Dominick's, a Chicago division of Safeway Inc., voted on Sunday to authorize a strike to back their demands for higher wages and healthcare benefits, Reuters reports.
The members of United Food and Commercial Workers International union, whose current labor contract expired this Saturday, claimed that Safeway was "scapegoating" them for its own mistakes at managing Dominick's, which is the No. 2 grocer in metropolitan Chicago, behind Albertson's Jewel supermarket chain. Profits and sales at the firm's 113-store division have waned for nearly four years.
"We are fully committed to working out a favorable agreement that benefits UFCW members, whether it be under Safeway or a future owner," the union said in a statement on Friday.
Some 80 percent of the workers voted to reject the company's contract offer and authorize a strike, Elizabeth Belan, a spokeswoman for the union's Local 881 said.
"Our intention is to sit down with Safeway to continue talks and negotiations for a fair and equitable contract," Belan said, although, she added, no talks are currently scheduled.
Safeway CEO Steve Burd said on Friday that the company would cut prices to lure customers, and insisted that it would not budge to worker demands at Dominick's.
A strike will "kill the business," Burd said. Therefore, striking workers would not be entitled to any severance pay or benefits, he added.
Early last week, Pleasanton, Calif.-based Safeway threatened to shut or sell the division if the workers strike.
Analysts said last week that Safeway could be using the labor dispute as an excuse to exit Chicago altogether in order to concentrate on its profitable businesses.
Safeway, whose shares slumped to six-year-lows after it reported a reduced profit outlook on Friday, said slower sales growth and escalating staff health-care costs were hurting its profitability.