On Wednesday, Kroger, America’s largest supermarket retailer, announced that it would be closing two of their Quality Food Center (QFC) stores in Seattle, Washington, thanks to the city’s recently enacted $4 bonus hazard pay requirement for employees working through the pandemic.
In a news release regarding the store closings, QFC stated: "Unfortunately, Seattle City Council didn't consider that grocery stores — even in a pandemic — operate on razor-thin profit margins in a very competitive landscape."
QFC further added that its operating costs have increased during the pandemic and there were "consistent financial losses" at the two stores in Seattle. With the bonus hazard pay requirement, "it becomes impossible to operate a financially sustainable business," said QFC.
Kroger, like other grocery stores such as Amazon-owned Whole Foods, voluntarily offered hazard pay in the early months of the pandemic, but the policy expired in the early summer, even as shutdowns and mandated capacity limits dragged on.
Since then, many cities on the West Coast have adopted “hero” or hazard pay laws. Just weeks ago, Kroger closed two stores in Long Beach after the city mandated a hazard pay increase. A Kroger spokesperson said that the stores were struggling at the time and called the city's decision “misguided."
“The irreparable harm that will come to employees and local citizens is a direct result of the City of Long Beach’s attempt to pick winners and losers,” Kroger said in a statement at the time.
Critics of Kroger’s decision say the company has seen increased sales and profit due to the pandemic and they should share the success with their workers. During the first three quarters of 2020, the company saw a $2.6 billion dollar profit, double the profit of the same time period in 2019.
Marc Perrone, president of the United Food and Commercial Workers' union, said Kroger’s decision to close stores was “cold-hearted.” He also added that Kroger is trying to send a message to other cities that if they require hazard pay, they’ll simply close.
“Kroger has literally made billions in pandemic profits off the sacrifices of grocery workers in Seattle and across the country,” said Perrone. “Kroger’s action today not only threatens these workers, but it also threatens the local food supply. Instead of doing what is right, protecting the community and providing the hazard pay for these essential grocery workers, Kroger is once again trying to intimidate local and national elected leaders.”