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Strike hits nine Ontario Loblaws stores, forces reduced services

Strikers picket outside of the Zehrs in Tecumseh, near Windsor, Ont., on Thursday, July 2, 2015.

Gene Schilling/THE CANADIAN PRESS

Workers at nine Loblaw Cos. Ltd. stores in the Windsor area walked off the job early Thursday, adding pressure to labour talks leading up to another possible strike at 61 stores in the Greater Toronto Area this weekend.

Loblaw and the union representing 26,000 employees went back to the bargaining table Thursday after an early morning deadline for a deal with the Windsor workers lapsed, sending them to the picket lines. Loblaw said it will keep the Windsor stores operating with managers, but with modified store hours and reduced services.

"In light of the union's decision to reject our offer and to strike, we have turned our attention to serving local customers and supporting our colleagues who will continue to serve them in all nine stores," Kevin Groh, Loblaw's vice-president of corporate affairs, said in a statement.

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Loblaw and officials with the United Food and Commercial Workers union have now resumed negotiations. Loblaw will try to come to an agreement with the union not only to end the current strike but also to avert a scheduled strike involving Local 1000A, which could affect 61 stores in greater Toronto, before a deadline of 12:01 a.m. July 5.

"Our senior members are telling us that they made sacrifices for the company, when they needed it most, to help the business grow," read a statement on the Local 1000A website. "Now, the business is doing well, they expect more and a fair share of those profits."

Michael Van Aelst, retail analyst at TD Securities, said in a note Tuesday that there is still a "reasonable amount of time to fine-tune the agreement before July 5," and that either party can request another vote hoping for a larger turnout that would lead to a favourable outcome. TD said voter turnout for the ratification meetings was less than 20 per cent.

Just before midnight on Wednesday, Locals 175 and 633 released a statement on their website that said John Miller, the mediator specialist for the Ministry of Labour, had asked the parties to resume negotiations and advised all parties to observe a media blackout. The union previously said on its website that Loblaw was not prepared to return to the bargaining table, but agreed to on Mr. Miller's urging.

Loblaw said in a memo obtained by industry publication Grocery Business that it was closing service cases in its fresh departments at the nine stores during the dispute, which would affect sales volumes and production.

The Windsor-area deadlock affects 1,600 workers at Zehrs Great Foods and Real Canadian Superstores (RCSS) locations in Kent, Essex and Lambton counties.

Meanwhile, a separate segment of locals 175 and 633 representing about 50 stores operating as Zehrs, Loblaws, Great Food and RCSS in central and north central Ontario agreed to the new contract.

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The new six-year term would see part-time clerks who work the fewest number of hours paid minimum wage (currently $11) over the duration of the contract. Both full-time and part-time employees at the end rate of pay would see a $1.70-an-hour increase over the six years.

The five-year agreement ratified in 2010 saw part-time employees paid a minimum of $10.25, also based on Ontario's minimum wage, for the duration of the contract.

The union said in a May statement that the salient issues are fair wage increases, reliable work schedules, benefit improvements and limits on third-party providers. Last month, 61 per cent of the union membership rejected the tentative agreement at ratification meetings.

Kevin Grier, a food market analyst, said Loblaw would not want to see a strike drag on.

"This is probably a time when you don't want to see a strike because this is a time when margins are good and you want to be selling and you don't want to lose market share. Because square footage has been growing, there has been a lot of competition from Wal-Mart and Costco. They [Loblaw] have been losing share to those in a big way in terms of the traditional grocers but also to the lower-cost formats like Food Basics."

Peter Chapman, retail marketer at GPS Business Solutions, said that Loblaw had built in some flexibility in its previous agreement. This allowed it to explore its own lower-cost grocer formats such as its Box by No-Frills.

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Mr. Van Aelst said the "greater risk" to the company would be a temporary disruption in its momentum.

The previous Loblaw strike lasted two days in Alberta in 2013.

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