Seattle Pay Mandate Fuels More Kroger Store Closings
More Kroger-affiliated food retail stores are closing down because of what the company calls the pressure of pay mandates.
Quality Food Centers (QFC) will close two underperforming stores in Seattle, a decision accelerated by a new Seattle City Council mandate that requires certain employers to provide extra pay for some, but not all, city front-line workers, the food retailer said.
The city recently passed a $4-per-hour pandemic pay mandate that applies to employees of grocery operators with more than 500 workers worldwide, and for locations of at least 100,000 square feet.
“Our business provides affordable groceries, good jobs with growth opportunities to thousands of Seattle residents, and proudly supports thousands of local community organizations,” QFC said. “We need a level playing field to deliver on these commitments. 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. When you factor in the increased costs of operating during COVID-19, coupled with consistent financial losses at these two locations, and this new extra pay mandate, it becomes impossible to operate a financially sustainable business,” said the company.
The two affected store locations will remain open and operational for 60 days — through April 24 — until the closure process is complete. The store locations are 416 15th Ave E, Seattle, and 8400 35th Ave NE, Seattle.
Pandemic pay mandates passed by local governments on the West Coast have led to lawsuits and other Kroger store closings. Earlier in February it blamed mandated pandemic hazard pay for the upcoming closings of two supermarkets it owns in Long Beach, California.
Even so, QFC said it is providing the mandated extra pay to all associates. The extra pay is in addition to the total compensation package QFC currently offers to its associates, including competitive wages, comprehensive health care and a reliable pension. QFC’s average hourly wage in Seattle is about $20 an hour and total compensation is over $25 an hour, including health care and pension benefits, the food retailer said.
The United Food and Commercial Workers International Union criticized these newly announced store QFC store closings.
“Kroger has literally made billions in pandemic profits off the sacrifices of grocery workers in Seattle and across the country,” said UFCW International President Marc 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. It will not work.”
Cincinnati-based Kroger employs nearly half a million associates who serve 9 million-plus customers daily through a seamless digital shopping experience and 2,800 retail food stores under a variety of banner names. The company is No. 3 on The PG 100, Progressive Grocer’s 2020 list of the top food and consumables retailers in North America.