Kroger to use tax cut to enhance benefits, wages

The Kroger Co. on Monday outlined specifics of its plan to share a portion of the proceeds of the Tax Cuts and Jobs Act with its employees.

The company has said that it would parcel up the windfall from the tax cuts, with about a third of the savings flowing to the bottom line and the rest being spent on technology initiatives and workers.

The spending on workers includes an enhanced educational assistance program, higher wages, a more generous 401(k) benefit, higher discounts for employees on the grocer’s private brand merchandise and enhanced support programs for employees who face crises, the company said in a statement.

Nationwide, Kroger employs nearly 500,000 people who serve 9 million customers a day through digital shopping platforms and 2,800 retail food stores.

Kroger’s Roundy’s division is based in Milwaukee. The company, via its Pick ’n Save, Metro Market and Copps stores, is the grocery market share leader in Milwaukee and Wisconsin, with 106 stores in the state.

The company employs 12,500 people in Wisconsin.

“The Tax Cuts and Jobs Act is a catalyst that is enabling us to accelerate investments in Restock Kroger, our plan to serve America through food inspiration and uplift,” Rodney McMullen, Kroger’s chairman and CEO, said in a statement. “We intend to make significant investments in our associates, to continue redefining the customer experience, and to return value to our shareholders — sharing the benefit with all of our stakeholders in a balanced way.”

Among the specifics of Kroger’s plan for employees:

Education: Kroger will offer an employee education benefit of up to $3,500 annually ($21,000 over the course of

employment) toward continuing education and development opportunities including a high school equivalency exam, professional certifications and advanced degrees. Kroger expects to increase by five times its annual investment in employee education. “We believe that making education benefits available to more associates and at more generous levels than ever before is the best way to support their future,” McMullen said in the statement.

❚ Retirement savings: Kroger and its subsidiaries will increase the company match in the 401(k) plan to 5 percent of pay, up from 4 percent.

❚ Discounts: The company is expanding its employee discount of 10% off Kroger’s private label products.

❚ Crisis fund: Kroger’s Helping Hands program, an internal support fund that aids its employees during hardships, will receive an additional $5 million in funding and be easier to use across its store brands, the company said. Last fall, Kroger awarded $700,000 in financial grants to support 1,100 workers enduring hurricane-related hardships.

❚ Wages: Kroger said again Monday that it is “utilizing the benefits of the Tax Cuts and Jobs Act to accelerate some of the previously announced, incremental $500 million investment in associate wages, training and development over the next three years.” An agreement with union workers in Ohio last month raised starting wages to at least $10 per hour, and accelerated wage progressions to $11 an hour after one year of service, laying the groundwork for “wage increases in multiple markets across the country,” the company said.