Kroger to close 2 California supermarkets after city mandates city to pay workers in pandemic



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LONG BEACH, Calif .– Kroger Co. will close two supermarkets in Southern California in response to a local ordinance demanding extra pay for some grocery store workers working during the pandemic.

The decision announced by the company on Monday follows a unanimous vote last month by Long Beach City Council imposing a 120-day increase of $ 4 per hour for employees of supermarkets with at least 300 employees across the country. countries and over 15 in Long Beach.

Kroger KR,
-1.78%
said it would close a Ralphs market and a Food 4 Less on April 17, the Press-Telegram reported.

“As a result of the City of Long Beach’s decision to pass an ordinance requiring additional pay for grocery store workers, we made the difficult decision to permanently shut down struggling Long Beach stores,” said the company in a press release.

The statement added, “This misguided action by Long Beach City Council goes beyond the traditional bargaining process and applies to some, but not all, workers in the city’s grocery store.

A city statement called Kroger’s move “unfortunate for workers, buyers and the company.”

A similar salary increase has been approved by the City of Montebello and is being considered in Los Angeles and Pomona. Further north, Oakland approved a risk premium for workers at the grocery store on Tuesday, while other Bay Area cities, including San Jose and Berkeley, were considering similar orders.

A lawsuit filed by the California Grocers Association claims the Long Beach ordinance interferes with the collective bargaining process between grocery stores and unions representing workers.

An association official said Monday that an increase of $ 4 an hour represents an increase of about 28% in labor costs.

“There is no way for grocers to absorb such a cost increase without compensation elsewhere, given that grocers operate on extremely fine margins and many stores are already operating in the red,” said the president. – general manager of the association, Ron Fong, in a press release.

The Long Beach ordinance was approved in a January 19 meeting in which council members and Mayor Robert Garcia said many grocery stores were paying employees a risk premium during the early stages of the pandemic. , but then deleted it.

“These people who work in these markets and these grocery stores are heroes,” Garcia said at the time. “This is nothing new. They received this kind of extra pay in the past and if they deserved it in the past, they deserve it today.

The Los Angeles proposal moved forward on Tuesday with a city council vote in favor of drafting an order by the city attorney calling for $ 5 an hour as an additional risk bonus for workers at large chains. grocery store and drug retail. The council requested that the project be presented as soon as possible for a final vote.

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