In response to new ordinances in two California cities mandating “hero pay” wage increases, the nation’s largest grocery store chain has closed two financially-struggling stores and will close three more next month.
On Saturday, Kroger closed two stores in Long Beach, blaming the move on the financial burden of the new “hero pay” ordinance, The Blaze reports:
“Kroger closed two stores in Long Beach on Saturday: a Ralphs and Food 4 Less in Long Beach, California. Kroger, which is the largest supermarket chain in the U.S. with nearly 2,800 stores in 35 states, stated that the city-mandated $4 "hero pay" increase was to blame for the store closings.”
“In January, the Long Beach City Council and the city's Democratic Mayor Robert Garcia approved a "hero pay" ordinance that increased wages by $4 per hour. The COVID-19 pandemic-related pay increase included employees of pharmacies and retail stores with 300 or more employees in the southern California city.”
As California’s Fox 5 reports, Kroger had already given employees a COVID raise and “spent about $1.3 billion to reward associates and implement dozens of coronavirus-related safety measures”:
“As a result of the City of Long Beach’s decision to pass an ordinance mandating Extra Pay for grocery workers, we have made the difficult decision to permanently close long-struggling store locations in Long Beach,” a company spokesperson said in a news release. ‘This misguided action by the Long Beach City Council oversteps the traditional bargaining process and applies to some, but not all, grocery workers in the city.’
“Kroger, which issued a $2 pay boost at the start of the pandemic, noted that it has already spent about $1.3 billion to reward associates and implement dozens of coronavirus-related safety measures since March, when the virus’ spread began accelerating in the U.S. That’s on top of other additional benefits offered to employees during the pandemic, including paid emergency leave, the company said.”
In one such safety initiative, Kroger offered to pay $100 to all employees who get a COVID-19 vaccine.
In March, the Los Angeles City Council passed a similar measure, mandating that grocery stores and pharmacies must pay an additional $5 an hour of “hero pay,” local ABC 7 reports:
“The $5 hazard pay will be required for all non-managerial employees at grocery or drug retail stores with more than 300 employees nationwide, or more than 10 employees on-site, as well as retail stores, such as Walmart and Target, that dedicate 10% of their sales floor to groceries or drug retail.”
In response, Kroger announced that it will close three area stores on May 12, 2021.
Nonetheless, other California cities, such as Malibu and Whittier, are pursuing “hero pay” mandates of their own.