Kroger’s QFC to close two Seattle stores, citing city hazard pay law
Move marks third Kroger Co. banner to shut locations due to mandated wage hikes
February 17, 2021
The Kroger Co.’s Quality Food Centers (QFC) plans to shut two Seattle stores, citing a municipal ordinance that mandates hazard pay for frontline grocery store workers due to the COVID-19 pandemic.
In announcing the move late yesterday, QFC described the two stores — located at 416 15th Ave. E and at 8400 35th Ave. NE in Seattle — as “underperforming” and “long struggling.” The Seattle-based chain also said the new law, which went into effect Feb. 3, could hike operating costs for some employers by 22% and isn’t evenly applied, because it singles out grocery retailers and requires extra pay only for certain frontline workers in the city.
“Our business provides affordable groceries, good jobs with growth opportunities to thousands of Seattle residents and proudly supports thousands of local community organizations. We need a level playing field to deliver on these commitments,” QFC said in a statement. “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.”
The Seattle City Council on Jan. 25 passed Council Bill 119990, which requires grocery employees in Seattle to receive hazard pay of $4 per hour during the “COVID-19 emergency.” Under the legislation, the extra pay for grocery store workers remains in effect for the duration of the pandemic. The council can reconsider the measure after four months, in alignment with the state health department’s plan to make COVID-19 vaccines available to all grocery workers by April. Convenience stores and food marts are exempted from the ordinance because they sell only a “limited line of goods,” according to the council.
Plans call for the two affected QFC stores to stay open for a 60-day period, through April 24, until the closing process is completed. QFC said it’s providing the mandated $4 hazard pay to all associates, including those in the two stores slated to close and the retailer’s 13 other stores in Seattle.
QFC noted that its average wage in Seattle is about $20 per hour and, including health care and pension benefits, total compensation exceeds $25 per hour. QFC also said it’s advocating to federal, state and local officials to prioritize frontline grocery workers to receive the COVID-19 vaccine and, along with other Kroger Co. supermarket chains, is offering associates a $100 incentive payment to get the two-dose vaccination.
Store representatives will meet with each impacted associate at the two Seattle locations being closed to help them with the transition, as well as comply with any contractual commitments and consider any transfer requests, QFC added. Overall, the chain operates 61 stores in Washington and Oregon.