The supermarket industry is as unsettled as ever in Sacramento – and thousands of middle-class paychecks could be affected.

Unable to reach agreement on a new labor deal, big unionized chains including Raley's extended their current contract for another 11 days with the United Food and Commercial Workers, the union said Wednesday.

The extension, the second since talks began in September, covers 60,000 workers in Sacramento, the Central Valley and Bay Area. It runs through Nov. 19.

It isn't unusual for contract talks to go into overtime. Still, the lack of a deal reflects the uncertainty confronting grocers and workers as they try to cope with sweeping changes in their industry.

Traditionally dominant grocers like Raley's are facing an unprecedented wave of competition, mostly from nonunion rivals such as Wal-Mart.

A weak economy and other issues aren't helping.

"This is the most challenging round of talks we've faced in decades," said Jacques Loveall, president of UFCW 8-Golden State, the giant union local based in Roseville.

"The economy, pension funding, health care reform and the creep of nonunion competitors are all straining the process," Loveall said in a prepared statement.

The UFCW's contract originally ran out Oct. 8.

The Roseville local and two Bay Area locals are trying to negotiate a new deal with three big chains: Raley's, including the Bel Air and Nob Hill subsidiaries; Safeway and its Vons subsidiary; and Save Mart and its Lucky subsidiary.

"The marketplace has changed dramatically since our last contract negotiations in 2007," said Save Mart spokeswoman Alicia Rockwell in a prepared statement. "As a result, these are very serious negotiations as our company is facing unrelenting competition from low cost, nonunion stores coupled with a recession, and high health and welfare costs."

At stake is one of the last of the middle-class, blue-collar occupations in California. The Roseville UFCW local says its cashiers, for instance, earn up to $21.13 an hour, plus benefits.

Over the past eight years, since Wal-Mart opened its first California supermarket, unionized grocers in the state have faced declining market share, and labor relations have become increasingly tense.

While wages have generally held up, the UFCW has had to give ground on issues such as employee health care contributions.

"The penetration of the unionized portion of the grocery industry continues to erode," said Bay Area industry consultant Robert Reynolds, a former Safeway executive. "The influence of Wal-Mart can't ever be ignored."

Safeway spokeswoman Susan Houghton said medical inflation and nonunion competition are the major issues in the contract negotiations.

"But we are optimistic that our negotiations will result in a peaceful settlement," she said by email.

Raley's Chief Executive Michael Teel said in a written statement that the company is "working toward a quick conclusion to negotiations."

Safeway, the only publicly owned company among the three chains, reported an uptick in profits and sales for the third quarter.

Raley's, by contrast, appears to be hurting. Last month the West Sacramento grocer said it will stop providing health care to retired hourly employees 65 and older. The decision takes effect next July.

"Unfortunately, due to the economic downturn and increased competition, we are struggling to sustain our business and maintain profitability," Teel said in an Oct. 24 letter to retirees. "We have … determined that Raley's can no longer cover the cost of this benefit."

Meanwhile, the competition keeps coming.

British grocer Fresh & Easy has said it will open six Sacramento stores next year, starting in Oak Park. According to its website, the retailer has 17 sites in the area under consideration. In the Bay Area, Fresh & Easy operates 14 stores and has identified seven additional locations for future stores.

Reynolds said the influx of new competition "weakens the hand of the union" as negotiations proceed.

Pressure from nonunion competition sparked a five-month supermarket strike in Southern California in 2003. A repeat strike in Southern California was averted in September after the contract was extended for a total of eight months.

The Sacramento area hasn't seen a supermarket strike since 1995.

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