Profits soared an average of 39% in the first half of the year at big, publicly traded supermarket chains and other food retailers thanks to the pandemic, although front-line workers reaped little or no benefit, a new report shows.
At Cincinnati-based The Kroger Company, profits for the first two quarters were up a staggering 90%, according to the report from the Brookings Institution, a Washington, D.C.-based think tank.
“We find that while top retail companies’ profits have soared during the pandemic, pay for their front-line workers — in most cases — has not,” the report said.
The report, released Nov. 20, revealed inequalities between retail workers’ pay and company profits during the pandemic. Profits earned at top retailers were described as “eye-popping,” even as most quickly ended so-called “hero pay” that was offered at the beginning of the pandemic in the form of bonuses or temporary bumps in pay for workers.
Among the retailers cited in the report:
— Kroger, which owns QFC and Fred Meyer stores in the Pacific Northwest, saw its net earnings for the first two quarters jump to more than $2.031 billion compared to $1.069 billion in the same period of 2019. Third quarter profits, which were reported last week, were not included in the Brookings Institution report. When those are included, the company’s net earnings of $2.662 billion are up just short of 100% for the first three quarters compared to 2019.
— Walmart profit was $15.6 billion for the first three quarters compared to $10.7 billion for the same period for 2019, a 45% increase.
— Amazon, which owns Whole Foods, saw a $17.4 billion profit for the first three quarters, up $6 billion from the same period last year. That amounted to a 53% increase.
— Costco’s profit was $2.2 billion for the first two quarters of 2020, an increase of $244 million from 2019 or 11%.
The study looked at profits at 13 publicly traded retail companies out of the top 20, including several grocery stores as well as retailers, such as Costco, Target and Amazon, that also sell groceries. The report also looked at how workers were compensated before and after the coronavirus pandemic began in March.
“Amazon and Walmart could have quadrupled the hazard pay they gave their front-line workers and still earned more profit than the previous year,” said Molly Kinder, one of the report’s authors.
In an email statement to the Free Press, Rachael Lighty, an Amazon spokesperson, called the Brookings study “flawed” and said it doesn’t “provide an accurate picture of wages, benefits and career opportunities that exist for employees at Amazon.”
Kristal Howard, a Kroger spokesperson, said the company has invested more than $1 billion since March to reward its associates and safety measures to protect them and customers. In September and November, front-line associates received a $100 store credit and 1,000 fuel points.
Howard added that Kroger continues to provide benefits, such as paid emergency leave and financial support, to associates facing hardships because of the pandemic through its $15 million Helping Hands fund.
“Our most urgent priority throughout this pandemic has been to provide a safe environment for our associates and customers while meeting our societal obligation to provide open stores, e-commerce solutions and an efficiently operating supply chain so that our communities have access to fresh, affordable food and essentials,” Howard said.
Despite record-breaking profits at stores, many grocery workers saw hazard pay — typically an extra $2 per hour at the onset — taken away and replaced, in some instances, with bonuses, sometimes in gift-card form.
The United Food and Commercial Workers union, which represents more than 1.3 million food and retail workers, has been pressing employers to reinstate hazard pay for its members as coronavirus cases resurge across the country after a drop off during the summer. Grocery workers, both union and nonunion, are also demanding mask mandates, free coronavirus testing, paid sick time for those sick or exposed and more.
“America’s essential workers are facing a holiday season of unparalleled danger as COVID-19 cases explode across the country,” Marc Perrone, president of the United Food and Commercial Workers International (UFCW), said in a Nov. 25 nationwide media call. “With more than 1 million new COVID-19 cases in the past week, and deaths spiking to unprecedented levels, we are entering what could be the deadliest phase of this pandemic for millions of America’s essential front-line workers.”
The UFCW said among its members impacted by COVID-19, there have been 350 front-line worker deaths, including 109 grocery workers. More than 17,400 grocery workers have been infected or exposed to the virus, the UFCW said.
Perrone said unless action is taken, ” … many more essential workers will become sick and more, tragically, will die.”
Walmart, whose profits were up 45%, gave full-time workers a $300 bonus in April, June and August, the report showed.
Delia Garcia, a Walmart spokeswoman, said in an email that the retail giant has given out more than $1.1 billion in special cash bonuses this year and awarded more than $1.3 billion in quarterly bonuses. The company also offers a COVID-19 emergency leave for full- and part-time associates.
Amazon called its $15 an hour national minimum wage “industry-leading” and says its spent more than $2.5 billion globally on special bonuses and incentives this year.
On Thanksgiving Day, Amazon announced a special bonus, totaling more than $500 million, for front-line U.S. operations employees. Those employed by the company from Dec. 1 to Dec. 31 will receive a $300 bonus for full-time employees and $150 for part-time employees.
“More than two years ago we increased our starting wage to at least $15 per hour, more in some places, which is nearly twice the Federal minimum wage,” Lighty, the Amazon spokesperson, said. “Since then, we have urged other retailers to do the same and have actively lobbied for a federal minimum wage increase, which has been unchanged since 2009.”
“Unlike many of those cited in the study, Amazon offers full-time jobs with benefits starting on the first day of employment,” she said.