A CHANGE IN PLANS 1994-12-26 (1)

ELLIOT ZWIEBACH

Labor disputes erupted early and often in 1994, and the effects of these struggles may be felt well into 1995. Two companies particularly hard-hit by labor troubles were A&P, Montvale, N.J., and Fred Meyer Inc., Portland, Ore. A&P experienced a double dose of labor pains in its Canadian division, beginning with a 14-week strike at its price-impact Miracle Food Mart stores. That was followed by a round of difficult negotiations during the summer involving the company's conventional A&P and Dominion stores in Ontario. The issue in both negotiations was wage parity in the wake of an influx of low-cost, nonunion operators in the Ontario market. The Miracle Food Mart dispute was the more damaging, since the United Food and Commercial Workers Union was able to invoke a newly imposed Canadian law that prohibits companies from hiring replacement workers during a strike. The Miracle Food Marts were shut down for 63 days, resulting in an earnings drop of 6 cents per share and a drop of nearly 0.5% in same-store sales for A&P's third quarter. Negotiations involving A&P's conventional stores in Canada ultimately resulted in contract language that allowed the company to convert a minimum of 25 stores to a lower-priced format -- a move it began making earlier this month with conversions of stores to the Super Fresh banner. Observers said A&P's difficulties in winning back customers with aggressive price promotions following the Miracle Food Mart strike could presage similar developments in Portland, Ore., where retail clerks and meatcutters engaged in an 87-day strike-lockout at Fred Meyer and several other operators. The primary issue in that dispute was full-time vs. part-time employees, with UFCW seeking a guaranteed ratio of at least 60% full-timers. While it didn't achieve that, the union was able to get the employers to recognize seniority in scheduling -- the first time that provision has been included in a Pacific Northwest labor contract, a union spokesman said. Following the strike settlement, Fred Meyer launched a major series of promotions to win back customers lost during the labor dispute. It remains unclear

at year's end how successful that effort will be. In the Midwest, Grand Rapids, Mich.-based Meijer Inc., which operates unionized stores in Michigan, sought to operate on a nonunion basis as it expanded into Ohio and Indiana. A brief strike at its four Toledo, Ohio, stores late in the spring ended when the chain agreed to recognize UFCW. At year's end only the chain's newest stores in Indiana remained nonunion -- a situation UFCW is continuing to monitor. Labor had a direct hand in ending Arcadia, Calif.-based Vons Cos.' eight-year-old Tianguis experiment in southern California. The Hispanic-oriented chain acknowledged that a union's antigrower grape boycott against the store, coupled with changing shopping tastes of Hispanic consumers, had sent volume into a free fall. By midyear Vons had converted all nine of its Tianguis units to other formats.