Kroger, owner of the supermarket chain, said he would close three stores in Los Angeles in response to new rules requiring a $ 5 hourly paycheck for grocery workers during the pandemic. came to the fore earlier this year.
Two Ralphs, one on West Pico Boulevard and one on West Slauson Avenue, as well as a Food 4 Less on West Sunset Boulevard, are scheduled for closure on May 15, Kroger said in a statement Wednesday. The company calls the three stores ‘underperformance’ and says the new LA household wage increases have accelerated the decision to close them.
The Kroger announcement comes as businesses continue to argue, some in court, that the extra payment is too expensive to maintain and that the grocery ordinance unfairly excludes if there are other businesses employing front-line workers. On Feb. 24, the LA City Council voted 14 to 1 to require larger grocery stores and drugstores to increase their workers’ wages by $ 5 per hour for the next four months.
Kroger said the wage assistance for workers would add $ 20 million to operating costs during that period, making it ‘financially unsustainable’ to keep underperforming stores in operation.
“Unfortunately, the Los Angeles City Council has ignored their own economic impact report by not considering grocery stores – even in a pandemic – operating on a razor-sharp profit margin in a very competitive landscape,” the company said.
In an analysis released by the city days before the vote, it was noted that the grocery industry is a low-profit sector and warned that businesses could respond to the ordinance by closing shops, firing staff or food prices to increase. Experts believe that grocery stores should generally be able to absorb temporary salary increases, although stores that are already struggling may be more adversely affected.
Denise Francis Woods, who last year elected the city council to represent her South LA district, said closing the store on Slauson would cost residents their jobs and deprive the area of a much-needed grocery store.
“It would be a total disaster for us if the Ralphs left,” she said. “We are considered a food desert.”
Stuart Waldman, president of the Valley Industry and Commerce Assn., Said “these exclusive and hasty provisions are merely bad policies that will have lasting negative consequences for our city.” His statement also thanked frontline workers.
Long Beach became one of the first cities in California to pay for the payment of hazards, and in late January approved a regulation requiring an extra $ 4 per hour for grocery workers. Setbacks were rapid, with the California Grocers Assn. file a lawsuit against the ordinance in federal court.
Other jurisdictions that approved similar proposals, including San Jose, San Francisco and Montebello, also withdrew from trade groups.
Last month, Kroger announced the impending closure of a Ralphs and Food 4 Less in Long Beach, blaming the new wage increases. Kroger also announced plans to close two stores in Seattle after the city accepted a mandate for hazardous payments; the two quality food centers closed for closure are already underperforming, the company said.
A UC San Francisco study on death rates among workers during the pandemic has enacted legislation on emergency pay. The study found that food and agricultural workers from the frontline labor force had the largest increase in deaths. Latin food and agricultural workers became disproportionate and experienced a 59% increase in mortality.
Times staff writers David Zahniser and Dakota Smith contributed to this report.