WOODBRIDGE, N.J. -- Pathmark Stores here plans to close seven stores in central and eastern Pennsylvania Dec. 30 after efforts to negotiate lower-cost contracts with its employees there failed.
The stores, with sales areas of 31,000 to 43,000 square feet, are located in Allentown, Bethlehem Township, Camp Hill, Harrisburg, Reading, Shillington and York. Stan Sorkin, vice president of public affairs, said he wasn't sure what the company would do with the store sites, although it planned to keep the pharmacies operating no matter how it filled out the rest of the spaces. The pharmacies cover approximately 2,000 square feet each and have separate entrances.
"In Connecticut, we converted five supermarkets earlier this year to deep-discount drug stores. But with Phar-Mor operating in Pennsylvania, we haven't decided to follow that course in this situation.
"We could look at subleasing in some cases, which would be the logical thing to do, but we haven't made a decision yet."
Pathmark had been negotiating since August with retail clerks in United Food and Commercial Workers Union Local 1776 and meatcutters in UFCW Local 56 to reduce wages and benefits by approximately 14%, Sorkin said.
The union voted down the chain's proposal late last month, and Pathmark decided to close the stores.
Union spokesmen could not be reached for comment last week.
Sorkin said the stores were losing approximately $5 million a year "due to growing competition from nonunion competitors, who provide their employees with lower wages and benefits."
Pathmark's nonunion competitors in the area include Giant Foods, Carlisle, Pa.; Redner's Markets, Reading, Pa., and Weis
Markets, Sunbury, Pa.
According to Anthony Cuti, Pathmark president, "We are very disappointed that the unions and our employees chose not to accept our final proposal. "We tried to negotiate a contract for the last four months and made a number of concessions in an attempt to reach a fair settlement. We sincerely wanted to continue to service our customers in this region."
Pathmark's contracts with the unions were due to expire in late 1995 and 1996, Sorkin told SN. The 14% wage and benefit cut would have reduced journeymen's salaries from $11 an hour to $9.40. Pathmark also asked employees to accept one week less of vacation, to work holidays for no extra pay and to contribute more to their health insurance.
What Pathmark offered in return, Sorkin said, was wages and benefits that would still be superior to those generally provided by nonunion companies, including a 25-cent pay raise in 1997 that was guaranteed by the original contract. It offered to provide a profit-sharing plan in which employees would have shared 25% of all profits.
Pathmark told employees of the stores in Allentown, Bethlehem Township, Reading and Shillington that it would invest $4.5 million to renovate and update those units in 1995.