Two grocery stores in Long Beach will close in April in response to the City Council’s recent vote to mandate extra pay for grocery workers amid the pandemic — and grocers warned the trend may continue in other cities that consider similar policies.
The Kroger Co., which owns Ralphs and Food 4 Less, announced Monday, Feb. 1, that it will close a Ralphs in East Long Beach, 3380 N. Los Coyotes Diagonal, and a Food 4 Less in North Long Beach, 2185 E. South St., on April 17.
“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.”
And it’s possible Kroger could close more grocery stores elsewhere. Long Beach was the first city in the region to approve a temporary wage bump for grocery workers, but Montebello has since followed suit, and Los Angeles and Pomona have signaled they will likely move ahead with similar ordinances.
When asked whether Kroger would shutter more locations if other cities also mandate hazard pay for grocery workers, the corporate affairs director for Ralphs, John Votava, said in an email, “These misguided mandates could put any struggling store in jeopardy of closure.”
The Long Beach City Council unanimously approved the ordinance last month, which requires grocery stores with at least 300 employees nationwide and more than 15 employees in Long Beach to pay workers an extra $4 per hour as a form of hazard pay to recognize the burden grocery workers face amid the coronavirus pandemic. The ordinance is currently set to last 120 days.
“It is (Long Beach)’s understanding that the two stores were identified by their owners as long-struggling,” a Monday statement from the city said. “Kroger’s decision is unfortunate for workers, shoppers and the company.”
Elsewhere in Los Angeles County, the Montebello City Council voted last week to require large drug and grocery stores to give employees an extra $4 per hour for the next 180 days. A similar hazard pay measure will also be considered by the Los Angeles City Council on Tuesday, and Pomona is expected to review a draft ordinance by March 1 that would require certain grocery stores to provide a $4-per-hour pay bump for workers.
When the Long Beach City Council approved the wage hike, council members spoke about how grocery workers put their lives on the line to ensure Long Beach residents continue to have access to the food and basic supplies their stores provide. Council members and Mayor Robert Garcia referenced the fact that many grocery stores voluntarily offered hazard pay early on in the pandemic but phased it out over the summer.
“These folks that are working at these markets and these grocery stores are heroes,” Garcia said in the Jan. 19 council meeting when the ordinance was approved. “This is nothing new. They have received this type of additional pay in the past and if they deserved it in the past, they deserve it today.”
And grocery workers themselves said the city’s ordinance is a necessary corrective to the fact that throughout most of the public-health crisis, they have continued to work and have not received adequate financial compensation for doing so.
Christina Mejia, who works for Food 4 Less, was one of dozens of grocery workers who called into City Council meetings while the panel weighed the ordinance. She said she and her colleagues worry daily about the possibility of catching the coronavirus.
“I believe me and my coworkers deserve hazard pay after almost a year of enduring these hard times, where this silent, deadly virus is among us,” she said during the Jan. 19 meeting. “Just last week alone, my store had 18,927 customers. Many of those customers can be carrying the virus.
“Hazard pay shouldn’t be a question or a debate. This is something we deserved from the start,” Mejia added. “It should be people over profits, not profits over people.”
The decision to close what amounts to 25% of Ralphs and Food 4 Less locations in Long Beach isn’t the only blowback the city has seen from its decision to pass the ordinance. The California Grocers Association announced the day after the council’s vote that it had filed a federal lawsuit against the city.
The lawsuit alleges that Long Beach’s ordinance is unconstitutional because it interferes with the collective bargaining process between grocery stores and the unions that represent their frontline workers. The city, meanwhile, has argued that the ordinance does not interfere with the process and is similar to other wage bumps that courts have upheld.
In weighing their own policies to boost wages for grocery workers during the pandemic, Montebello, Los Angeles and Pomona have all been warned by the California Grocers Association that they, too, could face legal challenges.
That didn’t deter Montebello; Mayor Kimberly Cobos-Cawthorne called the lawsuit and threats a “scare tactic,” and other council members agreed with her. But in Los Angeles, the city attorney — who has not yet released a draft ordinance — has asked that the issue be discussed in closed session in response to the threat of litigation. And in Pomona, city leaders are monitoring the Long Beach lawsuit because the outcome may impact the enforceability of Pomona’s ordinance. Local union leaders, though, support Pomona’s efforts to increase pay for grocery workers.
The California Grocers Association, meanwhile, said Monday that the closure of two grocery stores in Long Beach was a predictable consequence of the mandated wage bump.
“A $4/hour increase represents about a 28 percent increase in labor costs for grocers. 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,” the association’s president and CEO Ron Fong said in a statement. “The Long Beach City Council put politics ahead of families and jobs in the middle of a pandemic. This was entirely avoidable.”
Kroger’s most recent earnings report, though, showed that the company’s operating profit was up 33% compared to the prior year.
And Long Beach Vice Mayor Rex Richardson said he was skeptical that a temporary wage bump was the true reason Kroger decided to close the two grocery stores, one of which — the Food 4 Less — is in Richardson’s Ninth District.
The Food 4 Less location in North Long Beach has struggled in recent years as five big-box grocers have opened up nearby, Richardson said in a Monday phone interview. But regardless of the reasoning, he said, his job is to ensure his district doesn’t suffer because of Kroger’s decision.
“As a council member, I don’t have a lot of time to sit back and pontificate about whether some corporate executive who made an extra billion dollars last year,” he said, “is upset about a City Council decision.
“Our job is to keep providing for the residents,” Richardson added. “I’m not shaken.”
To that end, Richardson said he has already started conversations with the city’s Economic Development Department and Pacific Gateway, the city’s workforce development agency, to determine next steps for the property and for the workers who will be impacted.
“I just think it’s important that residents know that one way or the other, they’re going to be OK,” he said. “We’re going to be OK. Our community is making progress.”
Staff writers Mike Sprague, Elizabeth Chou and Jessica Keating contributed to this report.
