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Progress Seen in Labor Talks

PLEASANTON, Calif. Progress is slow but steady in the Southern California labor negotiations as both sides have relaxed the bargaining rules a bit, Steve Burd, chairman, president and chief executive officer of Safeway here, said last week. The negotiations have been slowed because the three chains Safeway, Albertsons and Kroger and seven locals of the United Food and Commercial Workers Union have

PLEASANTON, Calif. — Progress is “slow but steady” in the Southern California labor negotiations as both sides have relaxed the bargaining rules a bit, Steve Burd, chairman, president and chief executive officer of Safeway here, said last week.

The negotiations have been slowed because the three chains — Safeway, Albertsons and Kroger — and seven locals of the United Food and Commercial Workers Union have been bargaining as separate entities, with only one employer and one local able to speak to each other at a time, although all groups are in the room together, Burd noted.

“But for almost the last month, even though we're not part of a bargaining unit nor are the union locals, things have gotten a bit more relaxed, with everyone in the room talking to each other.”

Burd said he could not predict how long negotiations will continue, “but we're all committed to getting a fair result that allows the three companies to be competitive with all comers, which is what creates longevity in the workforce.”

Burd made his comments during a conference call with analysts to discuss results for the 12-week first quarter that ended March 24, which showed a 22% increase in net income to $174.4 million and a 4.8% sales increase to $9.3 billion, with comparable-store sales, excluding fuel, also up 4.8%.

Burd said 17 of the lifestyle stores entered their fourth year of operation during the quarter, “and the sales lift continues to be in excess of 50% of the levels achieved in the first year” — the same lift they had during the second and third years after their conversion, he pointed out.

He said Safeway plans to boost capital spending this year to $1.7 billion — a 1.8% increase over the $1.67 billion it spent in 2006 — to open about 25 new stores and to complete 275 remodels.

Burd said the company has raised guidance on identical-store sales, excluding fuel, from 3.3% to 3.6%-3.8% for the year.