As grocery worker advocates are demanding “hero pay” across the United States, some areas are heeding the call. Parts of California, most recently Santa Monica and San Francisco, but also Coachella and all of Los Angeles, have implemented ordinances requiring an additional $4-5 per hour for grocery store workers.
Now, about a month after Los Angeles adopted the pay mandate, The Kroger Co. is shutting down several of its locations in the city, citing increased operating expenses as a result of the new requirement, reports Progressive Grocer. The stores, two Ralphs locations and one Food 4 Less, will close on May 15.
“Unfortunately, the Los Angeles City Council disregarded their own Economic Impact Report by not considering that grocery stores — even in a pandemic — operate on razor-thin profit margins in a very competitive landscape,” a company spokesperson said in a statement excerpted in the publication. “…When you factor in the increased costs of operating during COVID-19, consistent financial losses at these three locations, and an extra pay mandate that will cost nearly $20 million over the next 120 days, it becomes impossible to operate these three stores.”
The L.A. ordinance states that “frontline grocery retail and drug retail workers are among the heroes of this pandemic,” adding that “their employers have not all provided sufficient wages during the COVID-19 pandemic to compensate frontline employees for their critical function to our society and the significant risk they face in the workplace.”
In Canada, Grocery Wage Cuts Prompt Antitrust Deliberations
In related news, members of the Parliament of Canada are considering reforming antitrust policies after the country’s top three grocery chains cut workers’ $2-per-hour hazard pay all at once, reports the Financial Post.
“For me, personally, I became more aware of the deficiencies in the Competition Act by virtue of our investigation into the national grocers and that reduction of pandemic pay,” said MP Nathaniel Erskine-Smith in an interview with the publication. “And then, consulting with other experts, I’ve seen other deficiencies in our act.”
The cuts occurred last spring, and the three grocers — Loblaw Companies Limited, Empire Company Limited and Metro Incorporated — were called to testify in July. Erskine-Smith cited the United States’ own antitrust bills as one of the factors prompting this turn toward prioritizing the issue, saying, “as the United States moves forward more seriously with a really strong antitrust lens, I think we need to update our laws and do the same.”
The House of Commons Standing Committee on Industry will convene for a series of discussions in April to examine whether and/or how the Competition Act should be reformed.
In the UK, Brexit Delays Hit Food Suppliers Hard
As the United Kingdom cuts ties with the European Union, new rules and regulations are causing serious setbacks for food manufacturers, reports the Financial Times. EU laws demanding that U.K. companies fill out additional paperwork when sending multi-ingredient food products to EU countries will complicate the process to the point where companies may need to cut off shipments to certain areas.
In many cases, forms ranging from health certificates to documents explaining the sources of ingredients will make trades unworkable. These changes will have the greatest negative impact on smaller businesses that are not set up to be multi-national corporations. The changes will go into effect on April 21.
According to Reuters, three-quarters of British manufacturers are experiencing delays because of Brexit, with food producers bearing a disproportionate share of this burden. Manufacturers’ group Make UK told the publication: “Government should look to quickly get back around the table with our EU partners to find a way to mitigate against ongoing delays at the border and iron out different interpretations of the rules for movement of goods in separate member states.”
Supermarkets Expand Partnerships With Vertical Farming Companies
Kroger’s partnership with urban agriculture company 80 Acres Farms is coming to 316 more Kroger locations in Ohio, Indiana and Kentucky, reports Winsight Grocery Business. In addition to its optimizing space and bringing farming to cities, the produce company also touts its pesticide-free products, year-round crop yield and use of renewable energy sources.
“Consumers are looking for more nutrition from their diet and want to trust that their food is safe and chemical-free and it will last longer in their refrigerators,” 80 Acres Co-founder and CEO Mike Zelkind told the outlet.
Meanwhile, on the West Coast, Albertsons-owned Safeway has been growing its partnership with vertical farm Plenty, reports Produce Blue Book. The company’s indoor-farmed produce is coming to 17 more Northern California Safeway locations, with plans to expand to 430 Albertsons-owned supermarkets throughout the state in coming years.
These vertical farms use robotics and other leading agricultural technology to maximize the space available in crowded cities. By Plenty’s estimate, their farms produce 350 times more per acre than a traditional farm.
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