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Safeway and the United Food and Commercial Workers (UFCW) announced that they have agreed to an extension of the labor contract in the San Francisco Bay Area to January 15, 2005. It had been slated to expire today.

The move gives the two sides room to find a resolution to the ongoing dispute that pits the chain’s desire for lower costs against the union’s desire for continued relevance and improved pay and benefits for its members.

In a statement, Safeway said, “This extension is a positive development for all parties involved. By working together at the bargaining table, we can find solutions to the challenges that face the unionized supermarket industry. These challenges are well chronicled: skyrocketing health care costs and the dramatic rise of non-union competitors who pay far lower wages and far fewer benefits.

“It is our hope the UFCW will remain focused on the negotiating process and the ongoing search for solutions to the challenges confronting the unionized grocery chains.”
KC's View:
Every grocery chain should be bending over backwards to avoid the debacle that took place in Southern California a year ago, in which a strike/lockout took place for more than four months, causing the chains to lose sales that even today have not been recovered.

Ironically, Safeway reportedly would like to spend as much as $50 million to buy some seven thousand of its Southern California employees out of their contracts – a move that needs to be approved by the UFCW, and that Safeway clearly thinks will save it money in the long term.