Magruder's Grocers, the last remaining nonunion supermarket chain in the Washington area, has signed its first union contract, marking the end of a decade-long campaign to unionize the eight-store company.

"We think this is a major victory," Thomas McNutt, president of the 30,000-member Local 400 of the United Food and Commercial Workers, said yesterday. Agreement on the new contract followed a strike threat last week by the union, which had rejected a previous offer from the Rockville-based chain.

The agreement marks the conclusion of a lengthy behind-the-scenes battle between the area's largest union and a popular food chain that had strongly resisted previous union organizing efforts.

The three-year contract provides wage increases ranging from 75 cents to $3 an hour, sets up the first pension plan for the firm's 900 employes and provides for company-paid medical insurance that previously cost workers up to $130 a month. The contract also includes new dental, optical and prescription coverage, the union said.

Mark Polsky, president of the 109-year-old food chain, declined comment yesterday on the new agreement.

Magruder's voluntarily agreed two months ago to recognize the union as bargaining agent for its employes -- without a government-supervised election -- after a majority of them signed union authorization cards. The union had threatened to set up picket lines and mount a major campaign to publicize the company's wage and benefit levels, which were lower than the store's competitors.

With the addition of Magruder's, the UFCW, which has more than 1 million members nationally, now represents about 94 percent of the more than 22,000 retail food workers in the Washington area, the union said.

McNutt said the Magruder's agreement is similar to union contracts covering at least six other smaller food chains that operate about 50 stores in the Washington area.

"The wall-to-wall coverage we have with local food stores ensures that no store will be at a competitive disadvantage for treating their employes fairly," McNutt said. Various food chains previously complained they could not afford to pay union wage and benefit levels unless competitors did the same, he said.

The Magruder's bargaining, which began in March, was complicated because the firm previously had no established pay scales and was paying between $4.75 and $11 an hour, McNutt said. The union demanded that lower-paid employes receive substantially larger raises to catch them up with higher-paid colleagues, and also insisted on raises for the highest-paid, he said.

Wages will rise from the current average of about $6 hourly to $7.75, the union said. "Magruder's bargained hard, but in the end they saw the value to the company of good labor relations," McNutt said.