Kroger-owned supermarket chain Quality Food Centers will close two Seattle stores next month, in part due to a new law requiring “ risk payment ” for front-line grocers that have continued to work during the corona pandemic
Two QFC stores will close on April 24, a decision “accelerated by a new Seattle City Council mandate requiring certain employers to pay additional wages for some, but not all, frontline workers in the city,” QFC said in a statement Tuesday pronunciation
The decision was reprimanded by a member of the board, who unanimously passed the law requiring larger supermarket chains to temporarily increase employee wages by $ 4 an hour.
“Supermarket employees have had to pay for emergency services, take on additional responsibilities and are five times more likely to sign COVID,” Teresa Mosqueda, a Seattle City Council member, said in a statement. “These workers cannot be pawns in a game of chess.”
The law, which went into effect last week, attracts legal challenges from the Northwest Grocery Association and the Washington Food Industry Association. A similar legal battle is unfolding in California, where the California Grocers Association is challenging hazard pay regulations in Oakland, Montebello and Long Beach.
The local union, United Food and Commercial Workers, called Kroger’s plan to close the two QFC stores “a transparent attempt to intimidate other local governments from passing regulations that would create risk costs for workers on the frontline of supermarkets.”
Trader Joe’s took a different tack and responded to a series of regulations all along temporary pay rise with $ 4 an hour for its employees across the country, but canceling the traditional mid-year increases. Likewise, PCC Community Markets expanded the temporary $ 4-hourly pay increase to all of its nearly 1,500 employees in its 15 locations, beyond the eight Seattle stores under the mandate.
Kroger said it would happen earlier this month close a Ralphs and a Food 4 Less in Long Beach, California, after the city passed a hazard payment ordinance that the supermarket chain called “misguided.”
Decision to end hero pay
Kroger last spring ended what it called “hero pays,” a $ 2 per hour bonus that the company briefly offered to its more than 500,000 employees from April 2020. Instead, the company switched to paying $ 130 million in bonuses, with full-time employees getting $ 400 and part-time employees getting $ 200.
Kroger has made record revenues during the pandemic as more Americans have chosen to stay at home, boosting food and other grocery sales. The company posted more than $ 2.9 billion in operating profit in the third quarter of 2020, representing an additional profit of $ 1.2 billion compared to a year ago.
Kroger is forwarding some of that money to investors, with a $ 1 billion share buyback announced in September. On February 5, the company announced a dividend payment of $ 147 million and expects to increase its dividend over time.