CINCINNATI (AP)--Kroger Co. (KR) and the union representing nearly 11,000 of its workers held last-ditch talks Thursday, hours before a possible strike in the hometown of the nation's largest traditional grocer.
Kroger, which battles nonunion Wal-Mart Stores Inc.'s (WMT) Supercenters for grocery sales, reached labor agreements this year in key regions including southern California, Texas and Michigan. But time was running out for a new contract in the area that includes southwest Ohio, northern Kentucky and southeastern Indiana.

Kroger was ready to staff the 79 affected stores with managers and temporary workers. Signs in storefronts and full-page newspaper ads offered temporary jobs for $10 to $15 an hour.

"We're moving forward with our plans for continuing to serve our customers," Kroger spokeswoman Meghan Glynn said.

The union said it expected support from other unions that wouldn't cross picket lines to make deliveries or shop during a strike.

"We're right now preparing for the worst and hoping for the best," said Brigid Kelly, a spokeswoman for Local 1099 of the United Food and Commercial Workers Union.

A federal mediator contacted both sides to set up Thursday's negotiations. The union could strike at 12:01 a.m. Friday.

Kelly said if progress was being made, the contract, already extended once, could be extended past the midnight expiration.

"If there's no movement, and there's no significant change from the contract our membership rejected, then we'll have no choice but to walk out the door," she said.

Kroger faced what would be the first strike since 1971 in the Cincinnati area, where the company began from a single downtown grocery in the late 19th century. Kroger has continued to dominate the local market, even as Wal-Mart has ringed Cincinnati with Supercenters in the past two years and as other competitors, such as Supervalu Inc.'s (SVU) bigg's, Midwest regional chain Meijer Inc., and specialty-food chains have increased their presences.

"This is a very competitive market and it does happen to be our hometown," Glynn said. "With any contract we negotiate, it has to make sense economically."

Kelly said Kroger's workers have been key players in the company's growth and should share in its financial success.

"It's frustrating and saddening that they're trying to shortchange their workers in their hometown," she said.

Customers were keeping an eye on developments that could change weekend shopping plans.

Jean Smith of nearby Batavia said she is a frequent Kroger shopper and bought groceries Thursday.

"If there's a picket line, I probably wouldn't cross it," she said. "I have quite a few other grocery stores around here."

A Wal-Mart spokesman said its stores are always ready for new customers.

"Our focus is to make sure that we provide as many customers as we can a way to save money," spokesman Ron Mosby said. "We are constantly prepared to do that."

Kroger workers in the Dayton, Ohio, area are under a different contract, but the company was advertising for temporary workers there as a contingency. Kelly said the union workers there likely would have some informational pickets outside stores.

The union says Kroger isn't fully funding pension and health-care plans and is offering subpar wage increases. The company says it is increasing wages and benefits while facing tough competition.

Pay raises in the rejected proposal ranged from 10 cents an hour for baggers to 95 cents an hour for department heads. A top-rated clerk's pay would increase 85 cents an hour from $14.61 an hour.

Workers voted overwhelmingly last month to authorize their leadership to call a strike.

Kroger, which had $66.1 billion in sales last year, operates 2,491 supermarkets and multidepartment stores in 31 states under two dozen local banners, including Ralphs, Fred Meyer, Food 4 Less, King Soopers, Smith's, Fry's, Dillons, QFC and City Market.

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Source: morningstar