Kroger said it will close three supermarkets in Los Angeles, citing what it described as an “arbitrary” $5-per-hour pandemic pay increase for grocery workers.
Los Angeles passed an ordinance last month that gave employees of retail grocery stores, retail drug stores, and large retail stores with a grocery or drug store component a $5-per-hour bump, dubbed “Hero Pay,” which went into effect Feb. 26 and continues for each hour an employee works for up to 120 days.
Kroger announced Wednesday the cost increase is too much for at least three underperforming supermarkets in Los Angeles, including two Ralphs and one Food 4 Less.
“Unfortunately, the Los Angeles City Council disregarded their own Economic Impact Report by not considering that grocery stores — even in a pandemic — operate on razor-thin profit margins in a very competitive landscape,” Kroger said in a statement. “It’s never our desire to close a store, but when you factor in the increased costs of operating during COVID-19, consistent financial losses at these three locations, and an extra pay mandate that will cost nearly $20 million over the next 120 days, it becomes impossible to operate these three stores.”
Kroger said the three stores would remain operational until May 15, Progressive Grocer reported.
“We are focused on and stand ready to work with state and local governments to prioritize vaccine distribution to front-line workers, like our associates, as quickly as possible,” the company continued. “This week in Los Angeles we are hosting three vaccine clinics for associates, with additional events to be hosted in the following weeks. Prioritizing vaccinations — not arbitrary mandates for extra pay — is what will keep front-line workers protected.”
Kroger made similar moves last month, citing hazard pay boosts in announcing the closures of several stores in Long Beach, California, and Seattle, the Los Angeles Times reported.
• Jessica Chasmar can be reached at jchasmar@washingtontimes.com.
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