Managers and unionized workers of the top supermarket chains in the Baltimore-Washington region are negotiating in hopes of reaching labor agreements before four-year contracts expire March 25.
Locals covering employees of Giant Food Inc. and Safeway Inc. will meet March 21 to decide whether to ratify proposed contracts. Negotiations with Super Fresh will start afterward.
Agreements between the three chains and the Baltimore and Washington locals of the United Food and Commercial Workers (UFCW) cover some 35,000 store workers such as cashiers, deli clerks and meat cutters -- the bulk of those at Giant and Safeway.
Local 27, based in Baltimore, represents 5,765 Giant workers and 2,089 Safeway workers. About 18,000 from both companies belong to Local 400, based in Landover.
As two of the oldest and largest chains in the Baltimore-Washington market, Giant and Safeway have held comfortably entrenched positions for years. In the region, they rank as the top supermarket chains in sales, with Giant accounting for more than 38 percent of the market and Safeway a nearly 20 percent share, according to Food World, a Columbia-based trade journal.
The contract renewals come at a time of major shifts in grocery retailing, including several trends not nearly as prevalent when negotiators met four years ago.
For one thing, food chains face increased competition as nonunionized rivals enter the market and nontraditional retailers, such as drug stores, mass merchandisers and warehouse clubs, sell more food products and expand. Online grocery retailing, just emerging as an option for consumers, will likely change the landscape further.
"The growth and the incursion of the nonunion competitors has been a very significant factor," said Jeff Metzger, Food World's publisher.
Consumer shopping patterns have shifted as well, making Sunday the busiest day of the week. Consolidation within the industry is quickly replacing local or regional ownership with larger, corporate parents.
And with unemployment at record lows, a tight labor market is posing challenges to the companies and the union, as chains try to hire and retain quality employees, and the locals try to strengthen loyalty from their ranks.
Both sides remain tight-lipped on specific details of any offers or counteroffers under discussion.
But given the landscape, those involved with or following negotiations expect key issues to revolve around wages, benefits and work on Sundays, when employees get paid up to double-time. The union's agenda will likely be driven by wage increases, while the companies will likely look for greater flexibility in everything from scheduling to pay scales for Sunday work.
Giant and Safeway officials will say only that talks are continuing.
"We expect to have a contract on the table by the 21st," said Barry Scher, Giant's vice president of public affairs.
Heads of the two UFCW locals, negotiating together this round instead of separately as in the past, say they expect to gain ground without making concessions.
"The companies we're bargaining with are healthy," said Jim Lowthers, president of Local 400. "They're doing fine economically. And one of the main reasons for that is the hard work members of Local 27 and 400 do every day. We expect them to be compensated. From an economic standpoint, [the companies] are in a position to make some improvements."
The union expects to get increases through higher hourly wages, "in lieu of [one-time] bonuses we've gotten in the past," said Buddy Mays, president of UFCW Local 27 in Baltimore. "Bonuses are unacceptable."
Protecting or increasing health, pension and severance benefits and increasing benefits for retirees also will be key issues, he said.
Giant has gone through contentious labor negotiations in the past, including those with Teamsters drivers in late 1996 that resulted in a five-week strike, fought largely over proposals to outsource work. The strike led to three consecutive quarters of lower earnings for Giant, as the chain launched an aggressive campaign of sales and promotions.
The negotiations mark the first time the union has bargained with Giant since its acquisition in 1998 by Dutch food company Royal Ahold NV.
"Ahold's never taken a strike in the U.S. and is very responsive in terms of labor negotiations," said Burt Flickinger III, managing director of Reach Marketing in Westport, Conn.
The company has a better relationship in general with organized labor than some of its big, international competitors, he said.
Increased competition from nonunion retail rivals could result in smoother bargaining in the Baltimore-Washington area in the upcoming year, Flickinger said. Wal-Mart is expected to continue expanding into Giant and Safeway territory, with super centers, neighborhood markets and Sam's Club warehouses, as are nonunion chains such as Food Lion and Costco.
"As low-cost, nonunion competition moves into the market, the UFCW is being very cooperative in terms of partnerships, work rules, wages and benefits," Flickinger said.
The Baltimore and Washington locals of UFCW first met with Giant and Safeway late last year to try to reach an early settlement. But talks stumbled over issues such as wages and maintenance of benefits.