Kroger workers in 3 states approve contract

CHARLESTON, W.Va. — Striking Kroger Co. workers in West Virginia, Kentucky and Ohio ratified a new contract on Thursday, ending a nearly two-month standoff with the Cincinnati supermarket chain over medical coverage.

Union officials said the contract, which included improved health-care benefits, was approved 962-717. A simple majority was required to ratify the agreement.

The agreement covers 3,300 members of United Food and Commercial Workers Local 400 at 44 stores in the three states. It does not affect Kroger's other labor problems in California and Indiana.

Shares of Kroger were unchanged to close at $17.34 on the New York Stock Exchange.

Health care costs were the main obstacle to a contract. Cincinnati-based Kroger initially offered to increase its contribution to a health and welfare fund by 8 percent, or $9 million, a year. Actuarial studies showed the fund needed an additional $29 million, and the proposal would have bankrupted the fund unless it reduced covered benefits.

That issue had prompted the union walkout on Oct. 13, when contract negotiations with the company fell apart.

"The health care issue carried the day," said Local 400 President Jim Lowthers. "That was our No. 1 issue."

Kroger said two Ohio stores and a West Virginia store would not reopen, in part because of losses caused by the strike. The other 41 stores were expected to be open by Monday.

Other details of the contract were not immediately available, but a Kroger official said it allows the company to manage costs so that it can compete with a growing number of nonunion retailers, including Wal-Mart Stores Inc., the nation's largest retailer.

"We are extremely pleased to have a new contract in place so that our employees can return to work and we can begin serving our customers again," said Pete Williams, president of Kroger's Mid-Atlantic marketing area.

The contract agreement was reached earlier this week by union and Kroger officials under federal mediation in Cincinnati.

Talks to settle a Southern California grocery store labor dispute that has idled workers since Oct. 11 broke off Sunday. Kroger-owned Ralphs is one of three chains involved.

Also, nearly 4,000 Indiana Kroger workers have worked without a new contract for nearly a month.

The labor troubles have taken a toll on Kroger's bottom line. Earlier this week, the company reported a 57 percent drop in third quarter earnings, primarily because of the strike. The company also reduced its forecast for the rest of the year.