A strike at Valley Fry’s and Safeway supermarkets has been averted, at least for now.
Contracts for about 15,000 Arizona supermarket workers will expire at midnight.
The supermarket chains and United Food and Commercial Workers Local 99 issued a joint statement Friday saying contract negotiations will continue indefinitely.
Either side can renege on the indefinite extension with seven days notice.
Supermarket industry consultant Burt Flickinger said he believes a strike is likely because the two sides are too far apart.
"Local 99 wants to see what happens in other markets first," he said. That includes striking supermarket workers in Southern California, West Virginia, Ohio and Kentucky, and a potential upcoming walkout in Indianapolis.
As in those locales, the issues on the local bargaining table are health care coverage and premiums, shoring up the pension pot and a pay raise.
The supermarkets want union workers, who currently don’t pay their health care premiums, to pay part of the monthly costs and to limit eligibility to those who work at least 130 hours a month instead of the 80 hours that now qualify parttimers for full health care coverage.
The union wants health care coverage to remain as in the current contract, and for the supermarkets to kick in more money to the pension fund.
The companies said they need to trim expenses to stay competitive with other nonunionized chains, especially Wal-Mart Supercenters.
The contentious issues are national concerns and not limited to the supermarket industry, said J. Craig Shearman, National Retail Federation vice president.
Congress already is wrestling with pension fund guidelines, Sherman said. Many traditional pension funds were tied to 30-year Treasury bonds, which have been discontinued. And many companies have dropped pension plans altogether in favor of 401(k) plans, where employees can elect to contribute and control the investments.
Health care coverage is even more of a worry for many employees and employers, Shearman said.
"We’ve seen double-digit increases in health care costs," he said. "Employers are taking steps to bring them under control. Most employers pass on some of the costs to employees and they are becoming more stringent about who can get health care."
The Valley, considered one of the most competitive markets in the country, includes Albertson’s and Bashas’, which are not unionized, Wal-Marts, warehouse retailers such as Costco and Sam’s Club, niche grocers such as Trader Joe’s, Whole Foods and Wild Oats, and a strong contingent of independent supermarkets.
All of those chains could benefit from a strike, Flickinger said.
Flickinger said there was "an immediate shopper shift" in California when the strikes began because many shoppers elected not to cross the picket lines. Struck chains in California lost an estimated $50 million to $60 million each in October, he said, and the November impact could be three times that.
"And if it’s a long strike supermarket chains stop building new stores in the market," Flickinger said. "Then everybody loses."