Food retailers see ‘eye-popping profits’ as workers reap little benefit

Detroit Free Press

Profits soared an average of 39% in the first half of the year at supermarket chains and other food retailers thanks to the pandemic, although frontline 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 frontline 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:

Walmart profit was $15.6 billion for the first 3 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.

The study looked at profits at 13 publicly traded retail companies out of the top 20, including several grocery stores and 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 frontline 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.”

Overall, the report revealed, retail companies cited in the analysis earned, on average, an extra $16.9 billion in profit in the first quarters of this year compared to last year, as grocery stores and their workers became a lifeline for people during the initial lockdown.

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 COVID-19 cases resurge across the country after a drop off during the summer. Grocery workers, both union and non-union, are also demanding mask mandates, free COVID-testing, paid sick time for those sick or exposed and more.

The UFCW said among its members impacted by COVID-19, there have been 350 frontline worker deaths, including 109 grocery workers. More than 17,400 grocery workers have been infected or exposed to the virus, the UFCW said.

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.