Kroger’s QFC to close two Seattle stores, citing city hazard pay law

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.”

Related:Kroger to shut two Long Beach stores due to local hazard pay mandate

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.

Related:PCC Community Markets reaches hazard pay accord with UFCW Local 21

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.  

“Seattle City Council’s misguided mandate targets one industry and not only oversteps our collective bargaining rights, but it altogether exempts several non-union competitors,” QFC stated. “City Council and the mayor refuse to answer why their proposal does nothing to raise wages for the city’s own frontline workers, who are serving with the same dignity and determination as our own associates. Unfortunately, the irreparable harm that will come to workers and our Seattle community is a direct result of the city’s attempt to pick winners and losers among essential businesses and workers.”

QFC’s announcement to close stores due to local hazard-pay regulations arising from the pandemic comes two weeks after The Kroger Co. said it will shut two stores in Long Beach, Calif., because of a similar city ordinance enacted in January. The Ralphs store at 3380 N. Los Coyotes Diagonal and the Food 4 Less store at 2185 E. South St. in Long Beach are scheduled to shut down on April 17.

The Kroger Co. said earlier this month that it plans to close one Ralphs and one Food 4 Less store in Long Beach, Calif., due to a city ordinance requiring grocery worker hazard pay.

United Food and Commercial Workers (UFCW) blasted Kroger for the planned QFC store closings, with the union describing the retailer’s move as retaliation for the Seattle hazard pay law and similar legislation in other localities. Besides Long Beach, pandemic-related hazard pay measures have been enacted or are being considered in Los Angeles County, Santa Monica, San Francisco, San Jose, Berkeley, Santa Ana, West Hollywood, Santa Clara, Los Angeles and San Mateo, Calif. 

“Today, Kroger publicly announced the closure of two QFC stores in Seattle in a transparent attempt to intimidate other local governments from passing ordinances that would provide hazard pay to front line grocery store workers. Essential workers, our local government, and our communities will not be threatened by this corporate bullying,” Seattle-based UFCW Local 21 said in a statement late Tuesday.

The scheduled QFC closings show “how out of touch Kroger is with our community,” according to UFCW 21. “The public overwhelmingly supports hazard pay and supports our grocery store workers. Other grocery chains, including PCC locally, have actually expanded hazard pay to stores beyond Seattle and Burien [Wash.], which have now passed new hazard pay laws. Kroger’s closures threaten workers, as well as shoppers and our local community. We need safety concerns addressed, and we need hazard pay expanded.”

The Kroger Co. said it has invested over $1.5 billion in rewards — including hourly appreciation pay and bonuses, to all frontline grocery, supply chain, manufacturing, pharmacy and call center associates — and expanded benefits and safety measures during the pandemic. The Cincinnati-based supermarket giant offered $2 hourly “hero pay” to frontline workers from late March to mid-May.

Earlier this month, Kroger unveiled plans to issue a one-time payment of $100 to all associates who receive full doses of the COVID-19 vaccine and, under an additional $50 million investment, provide a $100 store credit and 1,000 fuel points to hourly frontline grocery, supply chain, manufacturing, pharmacy and call center workers across its 35-state market area.

According to UFCW International, Kroger’s announced grocery store closings in Seattle and Long Beach jeopardize improved store safety and hazard pay for essential workers as well as food access for area residents during a public health crisis.

“Kroger has literally made billions in pandemic profits off the sacrifices of grocery workers in Seattle and across the country. Kroger’s action today not only threatens these workers, but it also threatens the local food supply,” UFCW International President Marc Perrone stated yesterday. “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.”

COVID-19’s toll on grocery workers continues to mount. UFCW reported Tuesday that, among its nationwide membership, at least 137 grocery workers have died from the virus and 30,100 have been infected or exposed to the disease.

“Regardless of the city or state, America’s grocery workers have earned and deserve hazard pay as they face the daily risk of COVID exposure on the frontlines,” Perrone said. “Kroger’s actions are even more appalling, given that major grocery chains like Trader Joe’s are doing the right thing by expanding hazard pay for all their employees,” he added. “Kroger is not above the law and has a responsibility to abide by commonsense COVID protections for grocery workers, measures that cities are enacting as the risks continue for these frontline workers during this escalating health crisis.”