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Stop & Shop will shutter its Freetown, Mass., warehouse if a new contract with Teamsters Local 25 is not reached by Feb. 28, a company spokesperson told Supermarket News on Thursday.
As previously reported, Stop & Shop is seeking to reduce labor costs at the facility by implementing a new health plan, but the Teamsters have rejected that proposal.
Stop & Shop said that if a new labor agreement was not ratified by Feb. 28, it would begin transitioning to third-party distribution and close the warehouse sometime in June. Teamsters Local 25 President Tom Mari previously told Supermarket News it would launch a strike on March 29, when the current contract expires, if a new agreement had not been reached by that time.
The five United Food & Commercial Workers union locals that represent Stop & Shop employees in New England have vowed to strike in solidarity with the Teamsters.
Seeking labor cost savings
Stop & Shop said it could achieve millions of dollars in annual savings by closing the facility and transferring distribution to a third party, but it was asking Teamsters Local 25 to accept the proposed contract instead. The Teamsters previously said the proposed health care plan was inferior to the current union plan and would require workers to contribute 20% of the costs.
“It is critical that the Teamsters Local 25 works together with us to achieve the labor savings needed [to continue operating the warehouse],” the retailer said in a statement provided to Supermarket News. “We believe these savings can be achieved by transitioning to a more competitive health plan, while still offering our associates 25% wage increases over a five-year period and maintaining their pension benefits.”
State treasurers warn of consequences
Meanwhile the state treasurers of Massachusetts, Rhode Island, and Connecticut sent a letter to Frans Muller, president and CEO of Stop & Shop parent Ahold Delhaize, and J.J. Fleeman, CEO of Ahold Delhaize USA, encouraging the retailer to “engage in good faith negotiations” with the Teamsters.
“A strike impacting over 900 Teamsters, as well as potentially 30,000 UFCW members throughout New England, would have far-reaching operational and economic consequences,” the state treasurers said in their letter, which was provided to Supermarket News by the Teamsters.
The treasurers described potential harm to Stop & Shop’s reputation in the market if it closes the warehouse and outsources distribution to a third party.