Shocking. You mean when we raise wages, businesses suddenly become less profitable? Paging Piezoe...Piezoe to the debate, stat. Kroger closes 2 Southern California stores over $4 per hour 'hero pay' ordinance Retail chain Kroger closed two California stores Saturday after Long Beach City approved a coronavirus "hero pay" ordinance. Hero pay ordinances bump pay for workers in retail stores and pharmacies with 300 or more workers due to the hazards of the COVID-19 pandemic. In Long Beach, eligible workers have seen a $4 per hour increase in their wages. Democratic Mayor Robert Garcia approved the ordinance in January. Other cities in California have taken similar measures, with Los Angeles approving "hero pay" in March at $5 an hour. Local leaders and union workers applauded the move, but the measure did not pass entirely with fanfare: The California Grocers Association immediately filed for an injunction on the pay hike, but a federal judge denied the effort. U.S. District Judge Otis D. Wright II concluded that an injunction would be "an extraordinary remedy" for the association’s complaints, the Long Beach Post reported. In response, Kroger started to close stores in cities where "hero pay" ordinances exist. The retail chain first announced intentions to close two Long Beach locations in February, stirring protests from workers and union members. Kroger claimed the stores were "underperforming" and that employees were given the chance to transfer to other locations, FOX Los Angeles reported. Garcia countered by citing a report by The Brooking Institute that noted Kroger had doubled its profits and spent "nearly a billion dollars in 2020 to buy back its own stock shares." The mayor has threatened to sue Kroger over the Long Beach closures, though it's not clear on what grounds he would do so. FOX Business reached out to Garcia’s office for comment, which is pending. A spokesperson for Kroger told FOX Business in February that the Long Beach City Council's "misguided action" in passing the ordinance had overstepped "the traditional bargaining process" and "only applies to some, but not all, grocery workers in the city." The company plans to close three Los Angeles locations on May 12, citing "hero pay" as the leading factor for its decision. "The mandate will add an additional $20 million in operating costs over the next 120 days, making it financially unsustainable to continue operating the three underperforming locations," Kroger said in a statement. "Despite our efforts to overcome the challenges we were already facing at these locations, the extra pay mandate makes it impossible to run a financially sustainable business …," the statement said. "Hero pay" ordinances appear set for approval in more California cities despite the controversies, with Malibu and Whittier set to vote on the measures. FOX Business' Julia Musto contributed to this report.
Dont believe everything you read.....Poor Kroger.. those stores were underperforming but when you look at the entire Kroger portfolio as income and earnings are consolidated it does not fit the narrative. I don't believe in the HERO PAY ordinance either just to be clear but this story does not support not raising wages. Kroger already did on its own and still has $2.6 billion in PROFITS. Kroger is making way more money AND raised salaries. Kroger's total sales surged 8.4% to $132.5 billion in pandemic-ravaged 2020 – tallying extra receipts to add the equivalent of nearly two Fortune 500 companies to its total revenues. The Cincinnati-based grocer also posted a $2.6 billion profit for the year, a 5.6% increase. A key sales metric, identical sales without fuel, increased 14.1% in 2020. Kroger also updated its average hourly pay for its workers. The company said that rose to $15.50 in 2020, up from $15 per hour. The grocer said it spent $300 million in 2020 to boost regular wages to its associates. Looking ahead, Kroger said it plans to spend an extra $350 million in 2021 to boost overall wages, but did not provide a forecast for increasing average hourly Seems Kroger has no issue with increased salaries with all the billions in profit, they just object to being told to do so by the City Council. Kroger is not suffering financially AND pays its workers $15 an hour yet still makes billions... go figure...making more money and giving workers higher pay.
Any company will look at profitability on a store level. The stores were already poor performers, and the additional hourly rate pushed them beyond acceptable threshold, so they were closed. Places that employ hourly workers like eateries and other razor thin margin locations will experience something similar if forced to absorb higher wages.
Democrats are confused. They think corporations don't adjust to increased costs. They naively think the big boss man will just make less. lol.
The grocery store, long a source of food for many Americans, disappeared because of wage increases, particularly the gubmint's historical 22 increases to the minimum wage.
I think most of you are confused with no business background. Corporations always adjust to increased costs across the board. Costs have icnreased significantly due to logistics issues with COVID. Kroger has $2.6 billion in PROFITS and on their own accord raised worker salaries to the tune of 9 figures. So Korger proves what you said is untrue. All Kroger is doing is closing underperforming stores but they are not avoiding raising salaries in the economic boom they enjoyed in 2020. Those stores could be near tons of competitors or are old and outdated or for whatever reason. the hero pay thing might have just been the final nail in the coffin but Kroger was agreeing to transfer employees elsewhere.
Dont get me wrong. I'm all for employees making good money. this may sound liberal but we're better off as a society if the wealth is not super concentrated to the 1% with a giant gap to the next levels down the pyramid. i dont even mind unions to be honest But a bureaucrat (with no business background) mandating pay.. thats called communism. doesnt work. like the minimum wage, all that does is create a magnet that corps stick to. probably the average low end pay would be better today without a minimum wage.
So if you were the CEO, would you subsidize these underperforming stores with the profits from other stores? $15 to $15.50 is just over a 3% raise. $15 to $19 is over 25%