The grocery chain Kroger will close three more of its stores in Los Angeles after the city passed a mandate requiring large grocery stores to temporarily boost employee pay by an extra $5 per hour, numerous sources reported.
Two Ralphs stores and a Food 4 Less will shut down on May 15 after the city approved the “hero pay” emergency order that the grocery chain says would increase employee’s total compensation to $24 an hour, which includes pension benefits and health care, CBS LA reported Thursday.
#BREAKING: Kroger says it will close 3 underperforming stores in Los Angeles after the passage of a $5 “hero pay” bump for grocery store workers. https://t.co/lutOvQddVy pic.twitter.com/yyJfS4g97z
— CBS Los Angeles (@CBSLA) March 10, 2021
The company also said the three stores were already underperforming, and the city mandate only accelerated their closure.
“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 in a statement, according to CBS LA.
L.A. City Council has finalized an ordinance mandating a $5 an hour pay increase for workers at large grocery and drug stores facing heightened risk on the job during the pandemic https://t.co/ohVxLCOopk
— KTLA (@KTLA) March 4, 2021
The company announced in February that it would close two supermarkets in Long Beach after the city council passed an ordinance mandating a hazard pay boost of $4 per hour for some grocery store workers. The company also said the stores had been struggling, and that the hazard pay mandate exacerbated the preexisting financial issues. (RELATED: Two Supermarkets Permanently Close In California, Citing Local Order To Increase Employee Pay)
United Food and Commercial Workers International Union (UFCW) called Kroger’s decision to shut down the Los Angeles stores a “cruel attack on essential workers” that threatens the food supply in the region.
“Essential workers in grocery stores are putting their health at risk every day to make sure families can put food on the table and city leaders are stepping up to ensure they have the hazard pay they have earned,” UFCW President Marc Perone said in a statement.
“When grocery chains do not provide workers with critical PPE like N95 masks, grocery workers have to spend their own money to protect themselves and their customers.”
Kroger said it had invested $2.5 billion in rewards to associates and to implement safety measures throughout the pandemic. It also said it recently issued $50 million in rewards to frontline associates, according to CBS LA. The company will provide the mandated extra pay to all associates, including those who work in the three stores that will close in May.
Kroger associates qualify for a one-time $100 reward if they get vaccinated for COVID-19 once they become eligible to receive it, a March 11 statement from the company said. The company says nearly 20% of its associates have received their first dose or are fully vaccinated, according to CBS LA.
“Prioritizing vaccinations — not arbitrary mandates for extra pay — is what will keep frontline workers protected,” a Kroger spokesperson said in a statement, CBS LA reported.