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The Pittsburgh Post-Gazette reports that Giant Eagle has begun negotiations with the United Food and Commercial Workers (UFCW) for a new contract to replace the one that ends next month.

The expiring deal affects about 4,000 grocery workers and 1,000 meat and delicatessen employees at 36 company-owned stores.

As in other markets around the country, the biggest bone of contention is expected to be health care benefits, as the retailer looks to control the rising costs that are impeding its ability to successfully compete with the likes of Wal-Mart.

Raising the stakes for Giant Eagle, according to Burt Flickinger of Strategic Resource Group, is the fact that Wal-Mart is likely to open Neighborhood Market units there sometime in the next three or four years.
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