By Randy Tucker
The Cincinnati Enquirer

Joseph Pichler,who directed Kroger Co. during its nationwide expansion in the 1990s, will step down as chairman of the Cincinnati-based supermarket giant at the company's annual meeting June 24, Kroger officials said Monday.

Pichler, 64, who was named chairman and CEO in 1990, will leave the chairmanship to David Dillon, 52, who succeeded Pichler as chief executive officer in June.

"This will complete the orderly succession process that was announced last year," Pichler said. "The board and I are very pleased with the leadership of Dave Dillon and his team."

Pichler - who helped transform Kroger from a debt-laden grocery operator to the nation's largest supermarket chain with its 1999 absorption of Fred Meyer Inc. - had previously said he wanted to retire before age 65 and that Dillon would take over the top job.

Dillon has pledged to follow in Pichler's footsteps, including cutting costs to allow for lower prices in the highly competitive grocery market now dominated by the nation's No. 1 food seller, Wal-Mart.

That strategy also includes cutting labor costs, which are at the center of an ongoing dispute between grocery giants Kroger, Safeway and Albertson's and about 70,000 supermarket employees represented by the United Food and Commercial Workers union in Southern California.

The dispute has left workers idle at Kroger's Ralph's division in Southern California since October and cost the chain between $135 million and $145 million in sales in the third quarter, while dragging earnings down by about $90 million.

The company also withdrew its annual profit forecast because of the labor dispute, which appears to be no closer to being resolved than when it began.

A call last week by union officials for arbitration was rejected by the supermarket chains, which are working together to seek concessions from employees on health-care costs.

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E-mail rtucker@enquirer.com

Supermarket talks in California to resume

LOS ANGELES (AP) - Negotiators in Southern California's long-running grocery strike prepared to return to the table this week for the first time in nearly two months.

The talks, which were scheduled to resume Wednesday, were arranged by a federal mediator who has been interceding for several weeks.

Mediated bargaining between the grocery workers' union and Albertsons Inc., Kroger Co. and Safeway Inc. broke off on Dec. 19. Informal, secret talks in Denver in January yielded no progress.

"Based on my discussions with the parties, I believe we've reached a point where there is some potential for progress on the key issues," Peter J. Hurtgen, director of the Washington-based Federal Mediation and Conciliation Service, said Monday. "I'm hopeful that with this next round of talks that we can move the process forward."

Some 70,000 grocery clerks have been on strike or locked out by the supermarket chains since Oct. 11 over what the workers view as inadequate health and benefit offers from their employers. Four months later, the financial strain has forced many employees off the picket lines or to other jobs. The companies have lost millions of dollars as they continue to operate stores with replacement workers.

Last week, the supermarket operators swiftly rejected an offer by the United Food and Commercial Workers union to end the strike immediately if the companies agreed to binding arbitration to resolve their contract differences.

The companies want their employees to begin paying a larger share of their health care benefits and want to institute a two-tier compensation system for future hires so they can remain competitive with Wal-Mart, Target and other big-box retailers-turned-grocery stores.

The union contends the grocery chains are asking too much.