Albertsons, Ralphs and Vons remained in talks with the union representing 62,000 Southern California supermarket workers as the deadline for canceling their labor contract passed on Sunday evening.

The United Food and Commercial Workers union on Thursday issued a required 72-hour notice of its plan to cancel its extended contract, a move that opened the door for workers to strike if an acceptable deal could not be reached.

Albertsons, Ralphs and Vons are still at the table with the union. Progress is being made, but we do not yet have an agreement, said Jeff Swanson, a spokesman for Albertsons parent Supervalu Inc (SVU.N).

Kroger Co (KR.N) owns Ralphs and Safeway Inc (SWY.N) operates Vons and Pavilions stores. The three supermarket companies are negotiating jointly, as they have in the past.

A spokesman for the union confirmed that the parties were still in talks.

The three grocers and UFCW were involved in the 2003-04 strike that at 141 days was the longest in the history of the U.S. grocery industry. It caused some shoppers to permanently shift business away from the region's big three supermarkets and caused financial hardship for many striking workers.

Roughly 54,000 UFCW union members are employees of the region's three largest grocers. The 8,000 remaining members are employed by stores that are negotiating separately.

The grocery workers' contract expired in March and had been renewed on a day-to-day basis.

The opposing sides are deadlocked over employer contributions for healthcare. The union says the proposal from the companies is insufficient to guarantee that healthcare benefits will be covered for the duration of the new contract.

California's unemployment rate for August stood at 12.1 percent, above the national average of 9.1 percent.

Kroger said it would initially close all of its 250 Southern California Ralphs stores in the event of a strike and evaluate the situation as it progresses.

Supervalu said it could close up to 100 of its 215 Albertsons stores in the region, depending on business conditions at the time of any strike.

Safeway, based in Pleasanton, California, said it would not close stores if a strike is called.

Southern California is a brutally competitive food retail market. Since 2003 non-union operators ranging from Wal-Mart (WMT.N) and Target (TGT.N) to Whole Foods (WFM.O) and Fresh & Easy Tesco (TSCO.L) have opened stores and grabbed market share from unionized supermarkets.

Retail Wal-Mart Unemployment California