Kroger opts for store closures over hazard pay in Seattle

Grocery chain balks at extra $4 an hour, despite profitable year

Grocery giant Kroger plans to close two stores in Seattle after the city passed a $4-an-hour hazardpay mandate for grocery workers, drawing rebukes from local officials and worker advocates who point to the company’s booming sales as the pandemic continues to kill more 2,000 a day nationwide.

Kroger, which recorded one of its more profitable years due to strong demand during the pandemic, blamed the closures on the city’s new mandate, saying it would raise costs at the two Quality Food Centers, which were already underperforming.

“Unfortunately, Seattle City Council didn’t consider that grocery stores — even in a pandemic — operate on razor-thin profit margins in a very competitive landscape,” the company said in a statement. “When you factor in the increased costs of operating during COVID-19, coupled with consistent financial losses at these two locations, and this new extra pay mandate, it becomes impossible to operate a financially sustainable business.”

Hazard pay and other pandemicrelated bonuses became popular among corporate grocery and retail giants amid wider public attention on essential workers during the early months of the spread of the coronavirus spread last year. Companies including Kroger, Target, Walmart, Amazon, Rite Aid and Albertsons instituted the policy.

But many companies ended hazard pay as the country reopened, declining to reinstate the practice, despite record caseloads in the United States. Kroger replaced it with a $400 bonus.