Pirate's Cove

There’s a price to pay when Government decides that Other People should spend their money in a manner than destroys businesses.  It’s very easy for Government to demand things, another for them to be put in play

Kroger will close 3 grocery stores following Los Angeles hazard pay mandate

Kroger announced it will close three Los Angeles grocery stores in May amid concerns about the city’s new hazard pay mandate, which requires large grocery and pharmacy stores to pay their employees an additional $5 per hour over a four-month span due to the Covid-19 pandemic.

This is at least the third time this year that Kroger has declared plans to shut down locations in select cities, following local government decisions that force stores to increase hourly wages.

The company said Wednesday that the closures of the Los Angeles stores — two of which are operating as Ralphs and one as Food 4 Less — was a decision accelerated by the new pay requirement.

“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,” a Kroger spokesperson said.

The Los Angeles City Council voted in late February in favor of the new hourly mandate by a margin of 14-1, as part of a trend among other West Coast cities that are requiring grocers to compensate employees at a higher rate during the pandemic.

Despite what appears to be a huge increase in gross earnings by grocery stores, the actual net earnings were way down, as operating costs were way up. Earnings for grocery stores have always been tight. COVID didn’t erase that, even with the binge purchasing. Mandating an extra $5 an hour for all employees is a massive increase in operating costs. And some stores have a smaller margin than others, especially in areas where theft is high

United Food and Commercial Workers International Union President Marc Perrone called Kroger’s actions on Wednesday “a cruel attack on essential workers.”

“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,” Perrone said in a statement Wednesday. “Hazard pay is not just about recognizing the health risks grocery workers face, it’s about making sure that these essential workers have the support they need to keep our grocery stores safe for customers and ensure all our families have the food we need as the pandemic continues.”

Then let the city council pay for it. Perhaps they can use all that extra money they’re getting from Biden’s 100% partisan $1.9 trillion “COVID relief” bill. Perhaps UFCW International could reduce their union dues. Oh, they don’t want to do that? Huh. The LA Times notes

Kroger said pay bumps for workers will add an additional $20 million in operating costs over that period, making it “financially unsustainable” to keep underperforming stores in operation.

That’s rather a lot of extra costs during a short period of time, eh?

Denise Francis Woods, who ran for City Council to represent her South L.A. district last year, said closing the store on Slauson would cost locals their jobs and deprive the area of a needed grocery store.

Well, perhaps she shouldn’t have voted for the rule, because now, instead of making more money, the employees will make no money. She calls the area a food desert, there’s a Food 4 Less (that is staying open) several blocks away.