‘They don’t care’: US supermarket chain shutters stores after hazard pay rules
Kroger, the largest supermarket chain in the US which makes hundred of millions of dollars in profits, is shutting down grocery stores and laying off scores of employees in response to local hazard pay rules for essential workers even as the coronavirus pandemic continues to rage.
Maria Hernandez has worked at Ralphs grocery stores for 25 years before she recently found out her store would be shutting down. She’s worked through the pandemic and caught the coronavirus in May 2020. She still experiences lingering, long-term effects from it, and has dealt with panic attacks and anxiety from the stress and pressures placed on essential workers.
“Why are they punishing us?” said Hernandez. “If it weren’t for us they couldn’t run the stores. As a person we have value. As workers we have value. They don’t seem to care about you as a human being. They don’t care.”
In response to a local ordinance passed by the Los Angeles city council on 3 March to grant frontline workers at large employers a $5-an-hour hazard pay increase for 120 days, Kroger announced plans to shut down three grocery stores in the city, eliminating more than 250 jobs.
Kroger claimed the decision to shut down a Food4Less location and two Ralphs stores was due to underperformance at the locations.
Tina Jones, a courtesy clerk at one of the Ralphs grocery stores set for closure, argued the decision was retaliation toward workers and the pay ordinance.
“If this store was underachieving, it was underachieving prior to the pandemic. It should have been closed then.
Why are they waiting until now to close it? It’s retaliation,” said Jones.
“Because none of these executives at Kroger, did they give us their yearly bonus so we could get $5 an hour? No, they’re sitting in their nice houses in the hills or wherever they live, and telling us we don’t deserve an extra $5 an hour.”
Jones also lives and grew up near where she works at Ralphs. She’s concerned about the impact closing the grocery store will have on the community, especially customers in need, such as a couple regular customers who are blind that she helps grocery shop.
She makes $15.30 an hour, 30 cents more than the current hourly minimum wage in Los Angeles, and explained she and her co-workers have struggled working through the pandemic, from dealing with significant influxes of customers in stores, maskless customers, lack of personal protective equipment and coronavirus outbreaks.
“I think each one of us has earned that $5 an hour,” added Jones. “For Kroger to say that we’re all a family, well, they’re putting their family out on the street.
In January 2021, the California Grocers Association filed a federal lawsuit to try to stop the $4-an-hour hazard pay ordinance in Long Beach, but a judge denied a request for a preliminary injunction before it went into effect.
Kroger shut down two grocery stores in Long Beach after the $4-anhour hazard pay ordinance passed.
In February 2021, Kroger also shut down two grocery stores in Seattle after a $4-an-hour local hazard pay ordinance for grocery workers was passed by the Seattle city council.
As demand for groceries soared due to the coronavirus pandemic, Kroger reported an operating profit of $2.8bn in 2020, an increase from $2.25bn in 2019. Kroger’s sales have continued to outperform 2019, with more than a 10% sales increase in the last fourth quarter of 2020.
Kroger’s CEO, Rodney McMullen, received more than $21m in total compensation in 2019, a 789 to 1 ratio compared to the median wage for Kroger employees.
When the pandemic began, Kroger enacted a $2-an-hour hazard pay along with several other large retailers and grocery chains, but ended it in May 2020 after buying nationwide television ads thanking their essential employees.
In September 2020, Kroger announced a $1bn stock buyback program. Kroger spent $1.32bn on stock buybacks in 2020, and increased dividends to shareholders totaling a $534m payout, providing nearly $1.9bn to shareholders, more than double Kroger’s return to shareholders in 2019 of $951m.
“It’s punishing the workers and communities for deciding what our communities look like and how workers should be compensated,” said John Grant, president of United Food and Commercial Workers Local 770 in Los Angeles. “They are, as best we can tell, the only grocery chain that is acting punitively and trying to punish workers in the community. Nobody else is shutting down stores.”
A spokesperson for Kroger touted bonuses, safety measures and rewards for associates at their network of grocery store companies provided since the start of the pandemic.
“We are in the business of providing fresh groceries, good and stable jobs with growth opportunities to thousands of Americans, and proudly support thousands of local community organizations across our family of stores,” said the spokesperson in an email. “Unfortunately, local municipalities disregard the fact that even in a pandemic – grocers operate on razorthin profit margins in a very competitive landscape. It’s never our desire to close stores, but when you factor in the increased costs of operating during Covid-19, consistent financial losses at these locations, and extra pay mandates, it becomes impossible to operate these stores.”