Kroger ending $2 an hour "hero pay" bonus for workers
The coronavirus pandemic that has killed more than 80,000 Americans is far from over, but the extra two bucks an hour that Kroger is paying its employees to show up for work amidst the health crisis soon will be.
Since April, the country's largest grocery chain has been offering its hourly "hero bonus" to tens of thousands of workers, viewed as essential even as most stayed at home to curb COVID-19's spread. As of this coming Sunday, May 17, Kroger workers will no longer be making the additional $2 an hour.
The United Food and Commercial Workers International Union, which represents 55,000 Kroger workers, is protesting the decision and calling for hero pay to continue. "It's clear the danger isn't gone even as states reopen—neither should hero pay," a spokesperson for the UFCW said Tuesday in an email to CBS MoneyWatch.
Four Kroger employees in Michigan are among the dozens of grocery store workers around the country that have died of COVID-19, the company told the Detroit Free Press. Thousands of others have tested positive, according to the UFCW.
Kroger defended its decision in an emailed statement to CBS MoneyWatch.
"Our temporary Hero Bonus is scheduled to end in mid-May. In the coming months, we know that our associates' needs will continue to evolve and change as our country recovers," a spokesperson stated. "We are committed to the continued support of our associates' safety and mental well-being, and we'll continue our ongoing discussions on these critical aspects with the UFCW."
On average, Kroger workers earn $15 an hour, or more than $20 if benefits including health care are factored in, according to the retailer.
Kroger repurchased $355 million of its own shares in the first quarter, and holds about $2.3 billion in cash and temporary cash investments. The Cincinnati-based chain operates 2,758 grocery stores in 35 states and tallied 2019 sales of $122.3 billion. It employs nearly 500,000 people.
In March, Kroger CEO Rodney McMullen had lauded the chain's employees in a news release announcing the increased pay for Kroger's hourly workers.
"Our associates have displayed the true actions of a hero, working tirelessly on the front lines to ensure everyone has access to affordable, fresh food and essentials during this national emergency," McMullen said. "The Hero Bonus is just one more way we continue to convey our thanks and gratitude not only to our existing associates but also to the more than 30,000 new hires who have joined in the past two weeks and those who will soon join the Kroger family of companies."
In a national TV ad that ran Sunday on Fox News, Kroger offered additional thanks to its workers, with the company spending $340,000 to air its televised expression of gratitude, according to an estimate by iSpotTV.
In an April 1 press release, Kroger said the pandemic "triggered a significantly greater lift in sales across both physical retail stores and digital channels in March," with monthly sales up 30% from a year ago. Kroger added that it anticipates first-quarter sales to top its 2020 guidance.