In late June, Local 338 RWDSU/UFCW, which represents the pharmacists, attended an A&P special shareholders meeting on June 26 in Woodcliff, NJ and voted against several proposals that included easing the path for the company to acquire new companies and the issue of incentive pay at a level of store managers and above. But the union's attempt to discuss the issue of the pharmacists' retirement package was rebuffed at the meeting, said John DeMartino, secretary-treasurer of Local 338, who attended the meeting with a petition signed by 2,000 employees supporting the pharmacists. Local 338 represents all employees but meat and seafood workers.
The local is an A&P shareholder with rights to vote on proposals, DeMartino explained.
"We wanted to talk about the plight of the Waldbaum's pharmacists, but they said this is not what this meeting is about," DeMartino said. (Officials of Montvale, N.J.-based A&P declined to comment for this story, citing a policy not to comment on details of negotiations.)
The first major sticking point is the retirement package. A&P wants the members to migrate to its 401(K) program, while the union wants to keep its multiemployer-funded pension plan.
"This is extremely unusual," DeMartino said. "This is the first time we're encountering this dumb demand. The people have spoken – they want the same plan, the same contribution rate."
Though this contract applies only to approximately 90 employees, it could set an example for other employees, DeMartino warned.
"A&P's corporate strategy is to do the same for everybody else," as contracts come up, DeMartino said. The company now operates 447 units in eight states, under the names A&P, Waldbaum's, Pathmark, Best Cellars, The Food Emporium, Super Foodmart, Super Fresh and Food Basics.
He said A&P insists on the move to improve their Moody's rating and thereby get better financing rates for future expansion. But the pension fund is in "extremely great shape," DeMartino said, giving the members no reason to transition.
"These people work [for the company] for 30, 40 years. This is all they have," he said. "It's crazy."
The pharmacists' contract expired in April, but they have remained on the job, despite authorizing a strike in May and filing charges of unfair labor practices against the chain in June.
"We don't want a strike. It's not our intent, not our goal," DeMartino said.
The conflict is nothing new, says a supermarket consultant.
"It's a trend with a lot of grocers," said David J. Livingston, a Pewaukee, WI-based supermarket consultant.
But A&P's shaky economics could make the whole situation moot. Despite its acquisition of Pathmark last year, the company exited several markets, Livingston said. "They are still not a good operator."
The company reported sales of $6.4 billion in fiscal 2007, up from $5.4 billion in 2006. Comp-store sales rose 2.4. But the company posted a net loss of $160.7 million last year, compared with earnings of $14.1 million in 2006. During 2007, the company acquired Pathmark, but sold Metro, exiting markets outside the Northeast.
DeMartino said, the union is hoping to resolve the retirement plan question and go on to negotiate the rest of the contract. "We are still trying to reach agreement with the company," DeMartino said. "All options are still on the table."
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