Kroger Houston Boosting Wages After Union Challenge

Kroger Houston has revealed that it will invest $56 million in wage increases and take steps to ensure access to reliable, affordable health care benefits for its workers. The move comes after months of labor disputes with the United Food and Commercial Workers (UFCW) Union Local 455.

Kroger said that it presented its "last, best and final offer" to the union on Aug. 19, but that the union has refused to schedule a vote that would allow their members (Kroger associates) to vote on the offer. According to the retailer, its new plan should "remove any uncertainty" that front-line associates may have.

"Kroger's commitment to increase wages and ensure our associates have access to world-class affordable, secure and reliable health care benefits is a core priority for the company," said Joe Kelley, president of Kroger's Houston division. "We believe this is the right path forward for our associates."

The grocer contended that Houston-based UFCW Local 455 hasn't allowed members to vote on a tentative agreement that would improve the security and stability of past and future pension benefits by moving to a new variable annuity pension plan (VAPP), which would include a nearly $1 billion investment by Kroger.

Kroger's new investment in its Houston associates includes the following:

• Every front-line Houston associate will receive an increase in pay over the next six months
• This additional wage increase follows wage increases earlier this year, and $8 million in wage increases in October 2019
• Kroger Houston will spend more than $75 million annually on health care for hourly associates
• Kroger Houston associates will pay $32 for individual coverage or $172 for family coverage each month in a company-administered plan. (By comparison, the national average per month for individual coverage is $103 for individual coverage and $501 for family coverage, according to a Kaiser Family Foundation Employer Health Benefits Summary of Findings cited by Kroger.)
• Kroger has offered to invest nearly $1 billion to improve the stability and security of past and future pension benefits for 33,000 associates across 14 divisions, including Houston meat clerks. The retailer said that establishing a new VAPP is the most effective way to do this.

Kroger noted that its associates' health care coverage is transitioning to a company-sponsored plan from their current South-Central Health and Welfare Fund, adding that it views the South-Central Fund as unstable because it significantly reduced benefits in 2019 for the company's associates.

The Kroger Houston division operates more than 100 stores in southeast Texas and Louisiana and employs over 18,000 associates.

Cincinnati-based Kroger employs nearly half a million associates who serve 9 million-plus customers daily through a seamless digital shopping experience and 2,800 retail food stores under a variety of banner names. The company is No. 3 on The PG 100, Progressive Grocer’s 2020 list of the top food and consumables retailers in North America.