Kroger Decides To Close Three LA Grocery Stores, Blaming City’s ‘Hero Pay’ Requirement
One week after the Los Angeles city council finalized a temporary $5 per hour hazard pay mandate for grocery workers, the supermarket giant Kroger has announced plans to shut down three grocery stores in the city.
On Wednesday, Kroger said it will close two Ralphs locations — one in the Westside Pico-Robertson neighborhood, and one in the Hyde Park neighborhood of South L.A — and one Food 4 Less location in East Hollywood. The stores will remain open until May 15.
Kroger blames the closures on the city’s new “hero pay” law, which requires that larger grocery and drugstore chains pay their frontline workers an extra $5 per hour for 120 days.
Proponents argue workers deserve compensation for facing increased risks during the pandemic. And they say companies can afford hazard pay, thanks to rising profits during the pandemic as consumers avoid eating out and buy more food to prepare at home. A recent Brookings Institution report found that Kroger’s profits increased by 90% in 2020.
But in an email announcing the store closures, Kroger said the temporary pay bump makes it “financially unsustainable to continue operating underperforming locations.”
Officials with UFCW Local 770 — the union that represents many grocery workers in the city of L.A. — said Kroger’s decision will eliminate jobs for more than 250 workers.
Union president John Grant said in an emailed statement, “Faced with sharing their windfall with their employees, [Kroger] chose instead to destroy 250 families’ lives in the middle of a pandemic.”
Prior to the L.A. city council vote, the city’s chief legislative analyst issued a report saying that temporary hazard pay could benefit workers, but warned higher labor costs could also lead to companies closing stores.
The California Grocers Association is challenging many local “hero pay” laws in court. The industry group’s president Ron Fong responded to Kroger’s announced closures in L.A. with a statement saying:
“Three more store closures in Los Angeles County means workers there stand to lose their good-paying jobs with generous benefits. Customers lose access to a neighborhood grocery close by. It’s a lose-lose all the way around and it is the direct result of elected officials who are passing these unworkable and costly mandates.”