Should grocers keep paying their associates like heroes?
Since the novel coronavirus pandemic began, low-paying frontline positions in grocery have been recognized by the public as some of the most indispensable and dangerous in the country. Many grocers praised the heroism of their workers and offered bonus pay in recognition. Now, as states, often against the federal government’s guidelines, begin to open more businesses to the public, grocers are evaluating whether to continue paying higher hourly wages and bonuses to associates.
In a significant announcement, Kroger announced it will be ending its “Hero Bonus,” a $2 hourly increase in pay instituted in April for tens of thousands of workers.
In a statement provided to RetailWire, Kroger wrote, “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. Our commitment is that we will continue to listen and be responsive, empowering us to make decisions that advance the needs of our associates, customers, communities and business. We continuously evaluate employee compensation and benefits packages. Our average hourly wage is $15 and with benefits factored in, like health care, the hourly wage is over $20.”
The United Food and Commercial Workers Union (UFCW), which represents 55,000 Kroger employees, told CBS Moneywatch that given that the danger of COVID-19 still remains, so should the bonus pay.
While grocery work has arguably never been more dangerous for frontline associates, sales have been up for grocers. Year-over-year dollar sales of consumer packaged goods were up 58 percent for the week ending April 18, according to numbers by Nielsen and Rakuten appearing on Commerce 360.
Kroger, the largest operator of supermarkets in the U.S., announced a 30 percent year-over-year sales increase early in April.
Grocery prices have also increased, jumping 2.6 percent in April, the largest one-month increase since 1974, according to Labor Department statistics reported by CNBC.
While Kroger is getting rid of its bonus, Walmart has announced it will be giving its employees an additional one, according to Supermarket News. In March, Walmart gave full-time employees a $300 bonus and part-time and temporary employees a $150 bonus. The second round of bonuses will be identical and will be paid out on June 25 to people who have been with the company since at least June 5.
Amazon.com, which pays its warehouse and retail workers a minimum starting wage of $15 an hour, announced that it would extend its temporary $2 hourly pay increase and double pay for overtime policy through May 30.
RetailWire has reached out to UFCW for a statement and we will update as information becomes available.
- At least 30 grocery store workers have died from the coronavirus, and their colleagues are pleading for shoppers to wear masks and respect social distancing – Business Insider
- Walmart to pay second cash bonus to U.S. hourly workers – Supermarket News
- US grocery costs jump the most in 46 years, led by rising prices for meat and eggs – CNBC
- Grocery retailers adapt as coronavirus upends shopping patterns – Digital Commerce 360
- Kroger Provides Business Update Related to COVID-19 – Kroger
- Amazon extends temporary raise in pay through May 30 – Reuters
DISCUSSION QUESTIONS: With the critical importance of the job now more broadly acknowledged, should the higher wages paid to frontline grocery workers during the pandemic become the standard moving forward? What do you make of Kroger’s move to end the bonus and do you expect most of its grocery rivals to follow its move?