Stop & Shop, Unions Reach New Deal

QUINCY, Mass. Stop & Shop and 40,000 of its unionized workers throughout New England last week reached agreement on a three-year labor contract, averting a potential strike and allowing the retailer to continue its transformation to a value-oriented banner. As the only predominantly unionized supermarket chain operating in Connecticut, Massachusetts and Rhode Island, Stop & Shop's goal during the

QUINCY, Mass. — Stop & Shop and 40,000 of its unionized workers throughout New England last week reached agreement on a three-year labor contract, averting a potential strike and allowing the retailer to continue its transformation to a value-oriented banner.

“As the only predominantly unionized supermarket chain operating in Connecticut, Massachusetts and Rhode Island, Stop & Shop's goal during the negotiating process was to reach agreements with competitive terms that will allow us to remain the leading supermarket in the marketplace,” Robert Keane, a spokesman for Stop & Shop, a division of Amsterdam-based Ahold, said in a statement. “We believe these new contracts meet our goal and provide significantly improved wages and benefits.”

Because the negotiations came amid Stop & Shop's recasting itself as a low-cost, everyday-low-price provider, local unions of the United Food and Commercial Workers approached negotiations with caution and resolve. Pat O'Neill, director of collective bargaining for the UFCW in Washington, identified Stop & Shop negotiations as “probably the most difficult” assignment for the union in a busy 2007.

One major issue in negotiations was contributions toward health care. According to Brian Petronella, president of Westport, Conn.-based Local 371, the compromise reached requires single full-time workers to contribute $5 weekly toward health care starting in March 2008. Additional changes will be required for spouse and family coverage, he said.

Unions, in return, received better protections for part-time workers, Petronella said. Under the new deal, part-time workers are eligible for company health care plans after one year of employment, rather than two years under the old plan. Part-timers are also not required to make weekly plan contributions, he said.

Stop & Shop last year launched a chainwide “value improvement program,” which seeks to lower prices and overall cost structure. These changes have resulted in stores with reduced opening hours, and in some locations the transformation of certain service departments, such as seafood and floral, to self-serve. Petronella said the new contract addresses issues that would affect workers if such changes accelerate or expand.

“Whether its meat, deli, fish, floral, bakery — it's their ultimate goal to reduce the hours required to run those departments in order to cut costs,” he said. “One of the things we were able to do, for example, was secure protective language in the contract for meatcutters. In the event the company introduces prepackaged meat, we have an agreement that says the company would give people who decide to leave medical coverage and severance pay and pension improvements.”