The nation’s largest grocery store chain, Kroger, is closing seven stores after cities have started mandating frontline workers are compensated with a higher hourly rate.
In Los Angeles, three stores now set to close include two Ralphs and a location of Food 4 Less. Over the past few weeks, Kroger has announced similar closures in Seattle (two stores) and Long Beach, California (two stores). Los Angeles City Council recently passed a $5 per hour hazard pay minimum, while the mandate passed in Long Beach and Seattle calls for $4 per hour.
A Kroger statement called the stores “underperforming” and estimated Los Angeles’ $5 per hour mandate would add $20 million to operating costs over the next 120 days, which it described as “financially unsustainable to continue operating.” Last year, Kroger delivered net profits of $2.5 billion on record sales of more than $132 billion. The sales rise of 8% over 2019 was well above its average annual increase of 2%, driven by restaurant closures, stocking up and stay-at-home orders, though analysts have projected that the pandemic-fueled growth rate is not likely to continue as the economy opens up. The company declined to comment further when contacted by Forbes.
The United Food and Commercial Workers union, which represents more than 1.3 million workers across grocery, meatpacking and other food manufacturing, condemned the recent closures, saying it fails frontline workers and will threaten the food supply.
“Essential workers in grocery stores are putting their health at risk every day to make sure families can put food on the table and city leaders are stepping up to ensure they have the hazard pay they have earned,” says UFCW International President Marc Perrone.
Hazard pay is a way for workers on the frontlines to be compensated for their additional risk. But while UFCW won hazard pay raises for some 120,000 grocery workers, most came at the beginning of the pandemic in the spring, and the raises did not last, even though the spread of coronavirus continued.
The union has confirmed that at least 139 of its frontline grocery workers have died while more than 32,200 of its grocery workers have been infected or exposed nationwide.
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March 11, 2021 at 09:04PM
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Kroger To Close Three More Supermarkets As Local Hazard Pay Mandates Spread - Forbes
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