Kroger shareholders urged to pay 'living wage' to workers, address other issues
Alexander Coolidge, Cincinnati Enquirer
Updated 5 min read
Kroger's Downtown headquarters in Cincinnati.
Kroger shareholders at their annual meeting on Thursday will be asked to consider measures urging the company to pay workers more money and pay more attention to environmental impact, the effects of selling tobacco and what charitable causes get help from the grocer.
LGIM America, a Chicago-based investment firm, wants Kroger to set policies to pay a living wage. The firm notes that the company’s average hourly pay of $18 in 2023 fell short of a $25 rate, suggested by a popular index maintained by Massachusetts Institute of Technology as needed to cover necessities. The group noted women and minorities can be disproportionately harmed by poor pay policies.
“Such inequality and disparity harm the entire economy,” the firm said in a proxy statement laying out the meeting's agenda. “By underpaying so many of its employees, Kroger may believe it will increase margins and thus financial performance. But gain in company profit that comes at the expense of society and the economy is a bad trade for company shareholders who are diversified and rely on broad economic growth to achieve their financial objectives.”
United Food and Commercial Workers (UFCW) Local 770, which represents Kroger workers at Ralphs stores in southern California, issued a statement by a local associate in support of the measure.
“We had to take a strike vote and threaten to walk off of the job the last time our contract was renegotiated, just to get the small gains we’ve been able to achieve,” said Miesha Smith, a Los Angeles cashier. “But inflation has eroded most of our gains over the last few years and our paychecks aren’t keeping up.”
Kroger said its board of directors opposes the measure, noting the company has already raised worker pay and plans to continue doing so in the future. It said the current hourly average pay is $19 per hour, while health and other benefits make it closer to $25 an hour. It also added Kroger workers are largely represented by unions.
The retailer noted it has spent $2.4 billion to raise wages more than 33% the last five years, which outpaced inflation.
“Kroger is proud to be an employer with a culture of opportunity and advancement,” the company said. “People from any walk of life can come for a job and discover ... a career.”
Retailer urged to list charitable contributions
The Louis B. & Diana R. Eichhold Trust wants Kroger to list all recipients of charitable contributions of $10,000 or more.
“Corporate philanthropic gifts should be given as much exposure as possible, lest their intended impact on goodwill is diminished,” the fund said in the proxy. “Feedback from employees, shareholders, and customers could help guide the company's future charitable giving process.”
The company’s board of directors opposes the measure, noting the company already discloses its contributions through its two nonprofit foundations, The Kroger Co. Foundation and The Kroger Co. Zero Hunger | Zero Waste Foundation. Many of the company’s charitable efforts are directed toward fighting hunger, with more than 114 million pounds of food donated last year.
“The company provides substantial public reporting on nonprofit foundation grant-making,” the company said in its proxy. “We do not make charitable donations to individuals, political campaigns, sectarian or religious organizations for projects that serve only its own members or supporters, or organizations that discriminate.”
“Kroger undermines its commitments to promoting good health and ultimately the interests of its diversified shareholders by not disclosing the social and environmental costs and risks,” the nonprofit said in the proxy statement. “A report would help shareholders determine whether these externalized costs and the economic harm they may create ultimately serve their interests.”
Kroger’s board of directors said in the proxy it opposes the measure, noting the company’s sales practices follow the law and the grocer respects customers’ “freedom of choice.” The company also added it would not be "reasonable or practicable given the resources and expertise required” to generate such a report.
“Kroger takes the responsibility of selling tobacco products very seriously,” the company said. “We recognize our responsibility as a business to support our communities and help families by making it easier for them to live healthier lives. We also believe in our customers’ freedom of choice, and adult customers can choose to purchase tobacco products understanding fully the potential health impacts.”
Group wants 'just transition' report on environmental efforts
“A ‘just transition’ (report) is increasingly recognized as an important component of climate action to address the needs, priorities, and realities of society while mitigating climate change,” the New York-based fund said in the proxy.
Kroger said its board of directors opposes the measure, noting it has “robust disclosure practices” and “well-established responsible supply chain programs.” It added “just transition” methodologies are new and still evolving.
“The company already provides robust annual reporting on sustainability and social impact topics,” its response said.
