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Following nearly a year of negotiations, Modesto, Calif.-based Save Mart Supermarkets secured a new contract with its union Saturday, a deal that will help the grocery chain lower its costs in a hyper-competitive climate, according to union officials.
The contract will include wage and benefit concessions for about 11,000 employees at Save Mart and its Lucky subsidiary in the Northern San Joaquin Valley and foothills.
"We are pleased that after almost a year of negotiations, the contract has now been ratified," said Eric J. Nadworny, Save Mart's chief human resources and legal officer. "The agreement provides for increased job security and offers our associates more hours to better take care of our customers. Our company looks forward to our future and building a quality shopping experience for our customers."
He added: "We appreciate the support of our associates who recognized the critical competitive circumstances facing our company. We need to be swift in meeting the challenges of a very competitive retail environment, to provide our customers and associates a solid future."
According to the UFCW, the agreement puts renewed pressure on Northern California's other unionized supermarkets, Raley's and Safeway Inc., to make their own deals with the United Food and Commercial Workers. Like Save Mart, the other two chains have been pushing since October for labor concessions but haven't yet come to an agreement.
The union's agreement with Save Mart won't be solidified until the contract is ratified by the executive board of UFCW Local 5 in San Jose, which is the last of the three Save Mart bargaining units to go along with the deal.
The local announced Saturday that its members voted to reject the contract in balloting that ended late Friday, 52 percent to 48 percent.
However, because the votes against the contract came up short of the two-thirds majority needed to authorize a strike, Local 5's board plans to invoke union rules and approve the contract. The local's president, Ron Lind, had warned his members a week ago that the board would take such action if members didn't approve the contract.
With Save Mart officials threatening to invoke terms of the contract, anyway, Local 5 officials believe they have little choice but to ratify the pact even if it isn't popular with the members. The alternative — a strike — would be difficult to pull off because of the obvious split within the rank-and-file, and the likelihood that scores of members would cross the picket line. "It's doomed to failure," said Mike Henneberry, a spokesman and VP at Local 5.
According to Local 5, Save Mart did obtain some key savings. The contract will require workers, for the first time, to contribute to their families' health premiums. It eliminates benefits such as bonus pay for night work in most cases. Save Mart did however, drop some of its initial demands, such as the elimination of retiree health coverage.
The contract was turned down a month ago, when it was overwhelmingly rejected by Local 5 and San Francisco's Local 648. The Central Valley unit, Local 8 in Roseville, approved it, but union officials said it wouldn't go into effect until all the locals approved.
The San Francisco local approved the contract on a revote last week, leaving Local 5 with the last word. Local 5 officials, urging their members to revisit the deal, said Save Mart has been losing money and a strike could result in tremendous job losses.
Henneberry called the contract "distasteful" but added, "It may give this chain a chance to survive." He suggested that members could recoup some of their losses when times are better. "It will give us a chance to fight another day," he added.