Dive Brief:

• Kroger’s Food 4 Less and Foods Co banners in California have a new contract with the United Food and Commercial Workers Union (UFCW) that includes pay increases for roughly 7,000 workers at nearly 100 stores, according to a press release on Tuesday. 
• Separately, Kroger announced on Monday that it reached new agreements with UFCW's Local 1996 that include “significant” pay increases for more than 22,000 associates at 170 stores in the greater Atlanta area and Savannah, Georgia. 
• The pay bumps and added incentives in the new contracts come at a time when grocers are struggling to find and retain workers amidst a nationwide labor shortage.

Dive Insight:

The UFCW called the Food 4 Less contract the “best deal ever” for workers at the California grocery banner. The new contract, which members voted on last week, includes pay increases of up to $1.65 over three years and bonuses of $150 to $500 for most workers. 

The contract also increases the number of guaranteed hours for part-time workers, offers more vacation time for senior employees, establishes a COVID-19 safety committee at each store and gives Food 4 Less associates access to a scholarship fund that's currently available to workers at Kroger's Ralphs banner.​

Meanwhile, the new labor agreements with the UFCW Local 1996, which were ratified last week, have Kroger’s Atlanta division investing more than $300 million in wage increases over a four-year span. Atlanta and Savannah associates also get “affordable and comprehensive health care” and continued investment in the worker pension fund, Tim Brown, president of the Kroger Atlanta division, said in a statement. 
 
In total, the new contracts impact more than 29,000 associates at roughly 270 stores operated by Kroger.

In the Monday announcement, Kroger touted its financial investments in associates in recent years, like the $800 million the company has spent on wage increases across the U.S. over the past three years. Last summer, Kroger was one of the major grocery chains to reset pension agreements with the UFCW. 
 
But the grocer has come under fire during the pandemic for closing some stores in areas that mandated hazard pay and for ending hazard pay for its workers while giving CEO Rodney McMullen a $22.4 million pay package for 2020, which Bloomberg reported was his biggest package since he started in 2014. 
 
In recent months, the UFCW has blasted grocers, including Kroger, for not doing enough to protect and compensate workers during the pandemic. The union has called for easier access to and guaranteed paid leave for vaccines for grocery workers and pressed grocers to reinstate the hazard pay that many ended after the initial waves of the pandemic last year. 
 
As a widespread labor shortage pressures grocers to reevaluate their pay and benefits, labor experts recently told Grocery Dive that companies need to offer more incentives, like flexible scheduling and advancement opportunities, beyond short-term pay bumps.