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World’s Largest Grocery Company Closes Two Long Beach Stores to Avoid Paying Workers More

Kroger says a temporary $4-an-hour hero pay increase has made two of its stores unprofitable, but deeper issues exist

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A 26-year Kroger employee speaks out in Long Beach
Photo by FREDERIC J. BROWN/AFP via Getty Images
Mona Holmes is a reporter for Eater Los Angeles and a regular contributor to KCRW radio. She has covered restaurants, dining, and food culture since 2016. In 2022, the James Beard Foundation nominated her for a Jonathan Gold Local Voice Award.

Earlier this year, Long Beach mayor Robert Garcia and the Long Beach City Council set about instituting a new $4 per hour hero pay increase for essential grocery store workers. The citywide requirement meant that companies that employ over 300 grocery workers nationally, and more than fifteen 15 employees per grocery store in the City of Long Beach, must provide $4 more per hour, per employee, in “premium pay” for the next four months.

Almost immediately after the city ordinance passed on January 19, two North Long Beach grocery store locations announced that they would close: the Ralphs at Los Coyotes and Diagonal, and the Food 4 Less on South Street near Cherry Avenue. A spokesperson for Kroger — the world’s largest grocery chain and owner of both Ralphs and Food 4 Less — laid the blame at the feet of mayor Garcia and the city council, saying that “despite our efforts to overcome the financial challenges we were already facing in these locations, the extra pay imposed by Long Beach City Council makes it impossible to run a financially sustainable business that can offer affordable fresh groceries, provide jobs with potential for growth and support community organizations.”

Is the temporary hero pay increase really solely to blame for the dual shutters, or is Kroger using the ordinance as a scapegoat for planned closures in a crowded market — all while keeping worker pay at some of the lowest levels in its industry?

Some, like statewide labor groups, have praised the city’s decision to bump pay for essential grocery store workers, noting that they have remained on the front lines, serving customers, since the first days of the pandemic. In October, a Harvard study concluded that grocery store workers face a higher risk of contracting COVID-19 than from airplane travel. Kroger offers two weeks of paid sick leave if any employee tests positive for the virus.

Others, like the California Grocers Association, have filed a lawsuit against the cities of Oakland, Montebello, and Long Beach in federal court for instituted mandated pay increases. The CGA claims, in part, that those wage increases, however temporary, will now increase food prices throughout the state.

Long Beach Fifth District representative Stacy Mungo calls foul on the grocery giant’s use of the hero pay program to justify closing altogether, noting that Kroger has threatened to shutter those the same stores multiple times throughout the years, well before the pandemic began — and even as grocery store employment has grown steadily since last spring. “While I’m disappointed to hear of Ralphs closing the Los Coyotes Diagonal location, this has been signaled every few months for years,” says Mungo. “They made a similar announcement when Grocery Outlet opened on Spring Street and it’s not surprising they make this announcement as the grand opening of Amazon Fresh is scheduled for early 2021 just over two blocks away.”

Indeed, both grocery stores (described as “underperforming” by Kroger reps) are situated in a highly competitive area. The Ralphs at Los Coyotes has a Pavilions, Stater Bros., Grocery Outlet, and soon-to-be Amazon Fresh all less than a mile away. The South Street Food 4 Less has two neighboring supermarkets within walking distance, along with a one mile distance between this location and mega store Superior Grocers, and WinCo Foods. There’s even another Food 4 Less nearby.

Long Beach resident Gene Faurie Jr. moved near the Los Coyotes Ralphs four years ago; he also doubts Kroger’s justifications for the closures. “I’m sad to see it go because it’s so convenient,” he says, adding “I think the store is greedy, and not wanting to pay temporarily more for the workers.” Faurie sees crowded and unmanned shelf-checkout lines whenever he shops at this local Ralphs now, he says, and he doesn’t believe the company is struggling financially. “I find that hard to believe. It’s always pretty busy.”

Kroger is a mega-company, having posted an $819 million profit last year on sales of $30.5 billion, per the Cincinnati Enquirer, meaning its profits have nearly tripled. The Brookings Institution published its own Kroger-focused findings in November 2020, showing “$211 million in stock buybacks in the second quarter” of 2020, along with “a new $1 billion stock buyback program in September,” which sent stock prices up. “Meanwhile, the company’s frontline grocery workers have gone 181 days without hazard pay, and will enter this new, deadlier phase of the pandemic earning some of the lowest wages in the industry.”

Still others believe that the upcoming closures, slated for this spring, are in part a punitive effort against workers who have pressed for better pay throughout the pandemic. LAist said as much in its reporting last week, after speaking with members of local grocery store workers union United Food and Commercial Workers Chapter 324. Kroger isn’t the only one cutting back. Hundreds of California’s in-house grocery store delivery drivers will be laid off by the Albertsons chain and its LA subsidiaries on February 27.

Regardless of the true nature of the upcoming closures, one verifiable fact remains true: a number of essential workers are scheduled to lose their jobs on April 17, 2021, while others will be transferred to area stores. On Twitter, Long Beach mayor Garcia has continued to press his criticisms of Kroger’s decision to stop service at the two locations, saying: “The Kroger corporation is closing two markets in Long Beach because our city is requiring temporary hero’s pay for grocery workers during this pandemic. Grocers are making record profits. We go to court this month and we will defend the workers vigorously.”