Disappointing Decision by Kroger Company to Shut Down 2 of its 15 Seattle Stores



photo from Seattle Times

APRIL 22, 2021 UPDATE:

photo from Seattle Times

I was invited by the event organizers to participate in a Thank You and Farewell for the workers, and here are my prepared remarks:

  • I want to thank the grocery workers for serving the community for so many years — and especially during this hazardous time during the COVID pandemic.
  • I want to thank the community leaders who organized this thoughtful funding campaign for the workers in addition to the ongoing support from their union.
  • Today’s event is another reminder of how much the community cares about its neighborhood businesses.
  • As we emerge from the COVID pandemic, we need to make sure every neighborhood has businesses that not only thrive, but also care about the community, too. 
  • Thank you, everyone, for being here today.

I think we can agree we were all disappointed by the Kroger company’s decision to shut down the wonderful grocery store. But that out-of-state company made their decision. Blaming their decision on a temporary City Hall law that benefits workers during COVID doesn’t hold water because that corporation is sitting on $2 billion in cash – and that’s on top of the substantial profits they earned in 2020.

On a positive note, I spoke to QFC earlier this week and they confirmed that there are no layoffs — all the workers who wanted to stay with QFC have a transfer already lined up with no loss in benefits.

I think Kroger’s made a bad business decision to leave this amazing community with its generous customer base and I look forward to welcoming a new store with open arms.

I personally contacted several different grocery store owners to pitch the neighborhood to them.  I’m also in contact with the owner of this entire shopping center so he knows that I’m available to help to attract a new anchor tenant here.  Wedgwood is wonderful and it’s open for business! Also check out the other fantastic small businesses near this location: The Wedgwood BroilerVan Gogh Coffeehouse, Wedgwood Hair Studio, Tropical Berry, Blue Poppy Floral, and Wedgwood Ale House.  

For Seattle Times article, CLICK HERE.

APRIL 9, 2021 UPDATE: As reported by KUOW News:

“Bare shelves have appeared at two Seattle grocery stores slated for closure on April 24. QFC said it is closing the stores in part because of Seattle’s $4-an-hour “hazard pay” ordinance.

“Hey, hey QFC! Share your profits, stop the greed!” members of the United Food and Commercial Workers union shouted Thursday as they waved signs outside one of the closing stores, located in the Wedgwood neighborhood of northeast Seattle…

QFC spokesperson Tiffany Sanders said in a statement that the company is now “meeting with each associate at the two affected stores to help them transition into a new position at one of our other locations if possible.”

Cook said she doesn’t know where she’s going yet. But even with this stress, she said getting hazard pay during the pandemic has still been “a major win” and she has no regrets.

“It was the one time ever when I’ve worked in a retail job where I felt like we were important for society,” she said, adding that the extra pay allowed people to take more time off to reduce their risk of getting Covid.

Most grocers granted $2-an-hour hazard pay last April and May. Then this past February, Seattle mandated $4-an-hour hazard pay for frontline grocery workers for the duration of the pandemic.

QFC said Seattle’s ordinance increased operating costs at stores by an average of 22%, which was “financially unsustainable” at the two locations. QFC’s parent company Kroger is closing stores where hazard pay was enacted in California as well.

Sanders said QFC is hosting vaccination clinics for staff, and awarding $100 to every employee who receives it. She said, “We continue to believe that vaccinations — not extra pay — are the surest way to keep our stores safe for all who work and visit.”

For a link to the KUOW article, CLICK HERE.

MARCH 25, 2021 UPDATE (from our newsletter):

A federal judge tossed out the lawsuit by the grocery industry, which attempted to block Seattle’s COVID-era requirement to pay $4 an hour in hazard pay to frontline grocery workers. (Council Bill 119990 is now Ordinance 126274 and it went into effect February 3, 2021.) For the Seattle Times article, CLICK HERE. (Note: King County followed Seattle and passed a nearly identical law for unincorporated areas.) While Seattle’s win in court confirms the legal authorization for the city government’s relief requirements for low-wage grocery workers, it does not help to keep open the beloved QFC that Kroger company has cynically vowed to shutter on April 24. My focus continues in two areas:  (1) do whatever I can as the District City Councilmember to help secure a good grocery or similar store in that location (on the border of District 4 and District 5) and (2) make sure City Hall honors its promise “to consider modifying or eliminating hazard pay requirements after four [sic] months of implementation and review of the current health, safety, and economic risks of frontline work during the COVID-19 emergency,” as stated by the temporary, new law (which I voted for). We need to make sure the sponsors of the legislation keep their word to conduct that review and we need to speed vaccines to all front-line workers, including grocery workers — who the Governor recently prioritized.  If City Hall does not eventually phase out or sunset new taxes or regulatory changes pitched to
the public as “necessary due to COVID,” then I believe what credibility exists between City Hall and the public will erode.

The QFC will remain open at least through April 24 and, while not a permanent substitute for those shopping in person, nearby grocery stores include Safeway on 35th Avenue NE at NE 75th Street, the larger University Village QFC store, the PCC Market on 40th Avenue NE and NE 65th Street, and the Metropolitan Market at 5250 40th Avenue NE. The Traders Joe’s in the University District (5555 Roosevelt Way NE) is probably too far away for most Wedgwood residents, though fans of that store will often go the extra mile.

In addition to support from the grocery workers labor union (UFCW, Local 21), I’d like to thank the community for creating a “Go Fund Me” effort with 100% to benefit the grocery workers, especially those who are not able to be transferred to other QFC stores in the area.  At the same time, I would hope that Kroger company updates its plans and decides to stay for at least the rest of its long-term lease at the current site.

Speaking of Wedgwood, the Wedgwood Community Council has been back in business for the past few months. My office attended their most recently monthly meeting on March 2 (they meet on the first Tuesday of each month). For the WCC’s website and new blog posts, CLICK HERE.

MARCH 9, 2021 UPDATE:

The King County Council followed Seattle’s lead and passed a nearly identical hazard pay increase of $4 an hour for frontline grocery workers within the unincorporated areas of the county. For the Seattle Times article, CLICK HERE.

According to the Seattle Times, County Councilmember Rod Dembowski, who represents the entire Wedgwood neighborhood, sponsored the legislation to acknowledge that grocery workers are “essential to the public function of getting food into people’s hands and homes,” he said at the bill’s introduction last month. Hazard pay was given to grocery store employees at the beginning of the pandemic but was inexplicably cut off, Dembowski said: “The pay went away, but the pandemic didn’t and the risk didn’t.” “I think that it’s the right thing to do for people who are going above and beyond the regular call of duty,” Dembowski said.

FEBRUARY 16, 2021 (original post):

I was very disappointed by the decision of the Cincinnati-based Kroger Company to shut down on April 24 two of their 15 QFC stores in Seattle, including the beloved QFC in Wedgwood.

As soon as I learned of this (February 16), I called Corporate Affairs for Kroger/QFC to ask if they would reconsider. They confirmed that both stores had been already underperforming financially. While Kroger’s November 2020 financial statements show the company sitting on over $2 billion in cash and larger chain stores typically have the “economies of scale” to handle temporary financial fluctuations, Kroger seeks to have each store stand on its own profits, which is difficult because grocers typically operate with thin margins. Despite the “cause and effect” framing by some local media outlets, the City Council’s recent decision to require temporary hazard pay to frontline grocery workers during the rest of the COVID pandemic was not the cause of the closures, but rather solidified and potentially sped up the inevitable.

Kroger/QFC appreciated my reaching out and they are well aware of my ongoing efforts to provide a positive business environment for long-term employers in our city, including my votes against new payroll tax proposals during this recession and my recent economic strategy for an inclusive recovery. We discussed the extraordinary stress and uncertainty caused by the COVID pandemic, which makes our legislative votes as well as decisions by business owners more difficult and complex.

I offered to do whatever I could to help to retain the store and/or to have it reconstituted in some form.  I also connected with the store manager to offer any assistance that we can provide and to the union leaders representing the workers at both stores to ensure any transition to new workplaces within the Kroger family of companies happens as smoothly as possible. (I had already connected with the business community – as well as with labor leaders — prior to my vote on this temporary measure).

I realize this detailed and nuanced explanation from an elected official makes no difference if a beloved store closes in our neighborhood (I often shop at that QFC, too!) and so let me say, I will do whatever I can as the District City Councilmember to help secure a good grocery store there. (The store is located in District 4 at the border of District 5.)

The QFC will remain open at least through April 24 and, while not a permanent substitute for those shopping in person, nearby grocery stores include Safeway on 35th Avenue NE at NE 75th Street (and next to University Village), the larger University Village QFC store, the PCC Market on 40th Avenue NE and NE 65th Street, and the Metropolitan Market at 5250 40th Avenue NE. The Traders Joe’s in the University District (5555 Roosevelt Way NE) is probably too far away for most Wedgwood residents, though fans of that store will often go the extra mile.

While this particular bill felt overly rushed, the pandemic has thrust us into a fluid and extraordinary emergency situation and I was able to get answers to the following key questions as I considered how to vote on the proposal:

  • Is it a temporary measure? YES. (The bill calls for a review within 4 months. We need to make sure the bill sponsors keep their word to conduct that review and we need to speed vaccines to all front-line workers, including grocery workers.)
  • Is it providing relief to frontline workers during COVID? YES
  • Do my constituents generally support temporary measures providing relief to frontline workers during COVID? YES.
  • Does it exempt struggling small businesses? YES.
  • Would it impact primarily those businesses headquartered outside of Seattle? YES, though PCC and other locals are impacted.
  • Have I consulted stakeholders (in this case, the business community and the labor union)? YES, though I wish I had more time to have deeper conversations.
  • Did it pass review by our City Council’s Central Staff Analysts? YES.
  • Did Mayor Durkan signal early support for the bill? YES.
  • Does the final bill contain a provision that requires review of the impact after a few months? YES.

For additional context, here are the remarks made last month when this temporary COVID relief measure passed:

Councilmember Pedersen remarks, January 25, 2021 when the bill passed unanimously after the Mayor confirmed she supported it and would sign it: “After rapidly reviewing and researching this proposed ordinance to have larger grocery stores boost the pay of their frontline workers during the pandemic, I have decided to support it.  I consulted with both labor and employers.  I personally want to acknowledge that I think this legislation moved very fast. To hear the legislation at a Friday Committee and then adopt it on Monday can make it difficult for everyone to review it thoroughly. At the same time, I recognize we are in the midst of an public health and economic emergency and, therefore, would not want to further delay the temporary pay boost these workers should be receiving for the hazards they are facing until both shots of the vaccine are administered to everyone.  I will be voting Yes today. Thank you.”

Mayor Jenny Durkan remarks, January 29, 2021: “A disproportionate number of people of color are essential workers, and Seattle must continue to lead the way to provide relief and respect to those that have served our community throughout this pandemic. Grocery store workers have continued to work every day of this challenging time and I am glad we are finally able to recognize and compensate the effort that has kept stores open and communities fed over the past year.”

MORE INFO:

  • For the February 16, 2021 Seattle Times article about Kroger’s announcement to close by April 24 the two QFC stores (Capitol Hill and Wedgwood), CLICK HERE.
  • For statements from the bill’s sponsors in reaction to Kroger’s announcement on February 16, 2021, CLICK HERE and HERE.
  • For Mayor Durkan’s January 29, 2021 press release celebrating the passage of Council’s bill which would go into effect February 3, 2021, CLICK HERE.
  • For a link to Council Bill 119990, the “Grocery Employee Hazard Pay Ordinance,” which the Council adopted January 25, 2021 CLICK HERE.
  • For some historical perspective, check out this 2012 piece called “Groceries and Growth in Wedgwood” by the blog called Wedgwood in Seattle History: CLICK HERE.
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