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Two Long Beach Grocery Outlets to Close, Blame Measure Similar to Santa Monica Proposal

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By Jorge Casuso

February 1, 2021 -- A major grocery store chain announced Monday it will shut down two Long Beach outlets as the result of a local "hero pay" measure similar to the one Santa Monica is contemplating.

The Kroger Co. will close a Ralphs and a Food 4 Less on April 17 after the Long Beach City Council last month mandated large grocery stores to pay workers an extra $4 amid the coronavirus pandemic.

“As a result of the City of Long Beach’s decision to pass an ordinance mandating Extra Pay for grocery workers, we have made the difficult decision to permanently close long-struggling store locations in Long Beach,” the company said in a statement.

“This misguided action by the Long Beach City Council oversteps the traditional bargaining process and applies to some, but not all, grocery workers in the city.”

Kroger Co. -- which said it has invested $1.3 billion since March to implement pay hikes and safety measures -- said the Long Beach ordinace will hurt both workers and customers.

“The irreparable harm that will come to employees and local citizens as a direct result of the City of Long Beach’s attempt to pick winners and losers, is deeply unfortunate,” the company said.

“We are truly saddened that our associates and customers will ultimately be the real victims of the city council’s actions.”

Councilmember Kevin McKeown, who proposed the Santa Monica ordinance, said on Monday that he would personally boycott Kroger stores. “My reaction is that corporate greed has no shame," McKeown said in a statement.

"My response, if they actually close the stores rather than extend ‘hero pay,' abandoning neighborhoods and discarding their loyal workers, is that I’ll stop shopping at any store owned by Kroger, whose media-release crocodile tears don’t wash away the dishonor they should feel,” McKeown said.

The emergency ordinance Santa Monica is drafting mandates that large grocery and drug store companies pay workers $5 more per hour, mirroring a measure LA County Supervisors are poised to implement for unincorporated areas.

McKeown said the ordinance "is on hold waiting for the County, upon whom my successful motion relied.

"I cannot claim any special knowledge or insight regarding retail food circumstances in Long Beach, where Kroger may already have been planning to close their stores and has seized upon ‘hero pay’ as a convenient excuse," he said.

“I do know that grocery workers in this pandemic are true heroes who deserve community support for keeping our families fed, and Kroger’s trying to foster pay envy from other essential workers not covered by the Long Beach ordinance is a doubly disrespectful response."

In moving forward with the local emergency ordinance, McKeown said grocery stores "are making a bundle" during the pandemic ("Hero Pay' Could Backfire, Grocery Industry Says," January 11, 2021).

Shortly after Monday's announcement, the California Grocers Association issued a statement warning that a $5 pay hike "would result in a $400 per year increase in grocery costs for a typical family of four."

The increase, the association said, "would hit low- and moderate-income families hard, particularly those struggling with job losses and income reductions due to COVID-19."

The industry group also warned that "it is highly likely that the wage mandates will translate into fewer store hours, fewer employee hours, and fewer jobs," since labor costs "are by far the largest controllable expense."

The Association calculates that for a store with 50 full-time equivalent employees, "it would take a reduction of 11 employees to offset the increased wage costs, or a 22 percent decrease in staff.

“There’s no way grocers can absorb that big of a cost increase without an offset somewhere else, considering grocers operate with razor thin margins and many stores already operate in the red," said Ron Fong, who heads the Association.

The group filed a lawsuit against the City of Long Beach less than one day after the Council approved the ordinance on January 19 ("Santa Monica Faces Lawsuit If It Approves 'Hero Pay,'" January 20, 2021).

The lawsuit claims the emergency ordinance illegally singles out certain grocers, while ignoring other groups that employ essential frontline workers, and illegally interferes with the collective-bargaining process protected by the federal National Labor Relations Act.

In an editorial, the LA Times sided with the Grocers Association saying that "“government shouldn’t be picking winners and losers, or who deserves ‘hero pay’ and who doesn’t."

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