Kroger closed two stores in Southern California worth more than $ 4 an hour under the “Hero Salary” Act. The Kroger retail chain closed two stores in California on Saturday after Long Beach City approved the “hero pay” Act of the Coronavirus.
Hero payroll ceremonies shatter wages of workers in retail stores and pharmacies with 300 or more workers due to the risks of the COVID-19 pandemic. In Long Beach, eligible workers saw a $ 4 an hour increase in their wages.
Democratic Mayor Robert Garcia approved the decree in January. Other California cities have taken similar measures, with Los Angeles agreeing to a “champion pay” in March at $ 5 an hour. The move was praised by local leaders and union workers, but the measure did not go through entirely with fanfare: The California Grocery Association promptly filed a court order over a wage increase, but a federal judge denied the effort.
In response, Kroger began shutting down stores in cities with “push of champions” ceremonies. The retail chain first announced its intention to close two Long Beach locations in February, prompting protests from workers and union members. Kroger claimed that stores were “underperforming” and that employees were given the opportunity to relocate to other locations. Garcia responded by citing a report from the Brookings Institution that indicated that Kroger had doubled its profits and spent “nearly $ 1 billion in 2020 to buy back its shares”. The mayor has threatened to sue Kroger over the Long Beach shutdown, though it is not clear on what grounds he would do so.
A Kroger spokesperson said in February that the Long Beach City Council’s “misleading action” went beyond the “traditional bargaining process” and “applies only to some of the grocery workers in the city, but not all of them.” The company plans to close three Los Angeles locations on May 12, citing “champion salary” as a major factor in its decision.
“The mandate will add an additional $ 20 million to operating costs over the next 120 days, making the continued operation of the three underperforming sites financially unsustainable,” Kroger said in a statement. Despite our efforts to overcome the challenges we were already facing in these locations, mandating additional wages makes it impossible to run a financially sustainable business” the statement said. Now, is it really Kroger isn’t able to perform well specially after the order of hero pay? Or they planned to close stores on purpose? Let us know in comment section below!