The nation's second-largest grocery chain has announced the closure of two stores in Seattle, after the city passed a $4-an-hour hazard pay mandate for grocery workers, according to the Washington Post.
"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," the company said in a statement. "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 hazard pay mandates were instituted because grocery employees were deemed "front line workers" due to their interaction with the public during the pandemic.
Hazard pay and other pandemic-related bonuses became popular among corporate grocery and retail giants, amid wider public attention on the plight of essential workers during the early spread of the coronavirus last year. Companies including Kroger, Target, Walmart, Amazon, Rite Aid and Albertsons instituted the policy.
The move comes two weeks after Kroger announced the closure of stores in Long Beach, California over similar hazard pay legislation, blaming local officials after they passed a law mandating that grocery stores with at least 300 workers nationwide or 15 employees within Long Beach to pay an additional $4 an hour for a 120-day period.
Kroger's decision was denounced by the United Food and Commercial Workers International Union.
"Kroger has literally made billions in pandemic profits off the sacrifices of grocery workers in Seattle and across the country," union president Marc Perrone said in a statement. "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."
Seattle officials, meanwhile, called Kroger's move an attempt to "bully" the city's elected leaders, who apparently didn't think their actions would have consequences.
"Kroger has posted record earnings during this pandemic," said Council President M. Lorena González in a statement. "The city’s front line grocery workers, meanwhile, are exposed to covid-19 every day and many are still living paycheck to paycheck."
Kroger posted an operating profit of $792 million in Q3 2020, up 300% from the same quarter a year prior - so perhaps they're drawing a line in the sand before cities across the country institute similar "hazard pay" mandates.