QFC's parent company, Kroger, announced the closures on Feb. 16, two weeks after Mayor Jenny Durkan signed an ordinance requiring grocery stores to pay workers an additional $4 per hour during the COVID-19 pandemic. The ordinance is in effect for the duration of the city and state governments’ declaration of a public health emergency.
Tom Geiger, UFCW Local 21’s director of special projects, characterized the closures as retaliation by Kroger over the union’s support of the ordinance.
“The announcement was a blatant attempt to send a message and intimidate workers,” Geiger said.
The news that the stores were closing came as a surprise to the store's employees. Apparently, QFC issued a press release announcing the closures at roughly the same time it officially notified the union and workers about the decision.
“The media knew about it before we knew about it,” said Jeff Alexander, a meat cutter at the Wedgwood store and a member of the UFCW 21 bargaining committee. “[Human resources] came in and pulled us to the back room and told us. Half an hour later, I come out and a customer’s like, ‘Sorry to hear you guys are closing.’ And I’m like, you guys knew already? To me, they already knew. We didn’t know. It hadn’t even been an hour yet.”
QFC employees, with the support of their union representatives and other unions in Seattle who showed up in solidarity, hold a rally outside of the Wedgewood QFC on April 8, 2021. They demanded that no more grocery stores close and the workers in those stores receive the hazard pay that the city of Seattle mandated. (Dorothy Edwards/Crosscut)
Alexander said the union is trying to get workers at the closing stores new positions at other QFCs, though he’s unsure whether all of his colleagues will land on their feet. He is confident that he will be placed in another store because of his seniority.
Crosscut asked QFC whether the company attempted to negotiate with UFCW to cut staff hours before announcing the closures. Tiffany Sanders, QFC’s corporate affairs manager, did not say whether the company tried to make a deal. Instead, Sanders wrote in an email that “we notified the union according to [the] process outlined in their contract.”
In an earlier phone conversation, Sanders claimed the ordinance prevented QFC from negotiating cuts.
“If you read the ordinance, it says that you can’t make changes to any store hours, or any associate hours,” Sanders said. “You can’t cut anything. It really kind of ties your hands to making any changes to that store [and] really balanc[ing] the budget. The ordinance does not allow us to change any associate hours, or change the hours of the store to make it so that we can operate in the black.”
However, city officials said Sanders is interpreting the ordinance incorrectly. Sejal Parikh, chief of staff to Seattle City Councilmember Teresa Mosqueda, who authored the ordinance, said the city’s Office of Labor Standards “states that the ordinance does not prohibit cutting hours.”
In the regulatory guidance Parikh referred to, the Office of Labor Standards wrote that “the ordinance does not directly prohibit an employer from reducing an employee’s hours as a result of this ordinance, only their hourly compensation.”
Adding or cutting hours is a normal part of the grocery business. Grocery stores typically staff up during the holidays, the time of year when they do the most business. Alexander said QFC was already cutting hours in his store after the hazard pay ordinance passed — and actually cut hours because of the new law.
“It happened more so when the hazard pay came out, but during the first of the year they always cut hours anyway,” Alexander said.
Part of what surprised Alexander and his colleagues about the announcement was QFC’s previous investment in the Wedgwood store. He mentioned a laundry list of expensive upgrades over the past year, including new floors, glass doors for the dairy aisle and a renovated deli.
“If the store is doing so bad, why do you put money into a store that’s making no profit?” Alexander said.
Sanders also emphasized those investments, and said they were part of a larger strategy to bring more business into the closing stores — which she said weren’t making much money before the hazard pay ordinance passed.
“We’ve been doing things, trying ... out new ideas and trying to make the customer experience better at some of these stores, really serve the customers, and maybe bring in more customers,” Sanders said, so that QFC could “maybe keep these stores so that they’re not struggling any more.”
Kroger had a banner year in 2020. The company spent $1 billion on stock buybacks in September 2020, and was able to restructure its pension obligations at the end of last year. In the company’s fourth quarter earnings call with investors, Kroger Chairman and CEO Rodney McMullen said the company beat its earnings projections for the year and gained market share.
McMullen also touted the near completion of an ongoing effort to upgrade Kroger’s stores, dubbed Restock Kroger. He also alluded to additional investments in stores made during the pandemic, particularly upgrades designed to improve the safety of workers and customers.
Molly Kinder, a research fellow at the Brookings Institution and an adjunct professor at Georgetown University's McCourt School of Public Policy, said Kroger and other national chains have been “some of the few winners of the pandemic,” though she emphasized that she isn’t familiar with the financial particulars of QFC or any other regional Kroger subsidiary.
Over the past year, Kinder has researched hazard pay and found that grocery and retail stores have enjoyed “record profits.”
“Some companies have really shown that they recognize the uniqueness of this moment, and have shown generosity,” Kinder said, adding that Kroger isn’t one of them.
“They’ve increased their dividend at the same time that their workers — who make very low wages compared to other large grocery and retail chains — have gotten almost nothing,” she said. “I think those decisions say a lot about what companies in this truly extraordinary moment, when low-wage workers are risking their families’ lives for the rest of us.”
Alexander added that there is an irony to the store closures.
“I know the union helped try to get us the hazard pay, but they’ve got to realize the Seattle City Council did it. They’re the ones that passed it,” he said. “It’s like they’re just taking it out on us.”
He said his co-workers will face real problems because of the politicking.
“They’re worrying about, ‘Where am I going, how many hours am I going to get?’ ” Alexander said. “A lot of people are living from paycheck to paycheck.”