Kroger, the largest supermarket chain in the US, is shutting down grocery stores in Los Angeles and laying off of employees in response to local hazard pay rules for essential workers even as the coronavirus pandemic continues to rage.
“Why are they punishing us?” said Maria 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.
Tina Jones said, "It’s retaliation.” She continued, "...these executives at Kroger...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.”
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. 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.
In Long Beach Kroger shut down two grocery stores in Long Beach after the $4-an-hour 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.
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.
“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.”