Economic Roundtable

Bullies At The Table

Consequences of Understaffing by Kroger and Albertsons

May 7, 2025 / By Daniel Flaming and Patrick Burns
Underwriters: International Brotherhood of Teamsters Local 38, UFCW Local 3000, UFCW Local 324, UFCW Local 7, UFCW Local 770 Download

Neglected Grocery Stores

Going to the grocery store is shoppers least enjoyable retail experience because of long lines, high prices and limited availability of popular items.

Most grocery workers in California, Colorado and Washington say that product sits in their stores’ backrooms because there is not enough staff to stock store shelves and that their stores are unable to provide good customer service.

They say that they are unable to complete all of their assigned tasks during their shift. This means that most grocery customers are going into stores where tasks such as cleaning and stocking shelves are neglected.

More than nine out of ten grocery store workers in the three states report price gouging at their stores and that their company is raising prices higher than production costs. As a consequence, customers put groceries back on the shelf because they cannot afford to buy them and they are buying less balanced and healthy food than they used to. This means that public health is being adversely affected by inflated grocery prices.

Hard Times for Grocery Workers

The grocery labor force lives with extreme financial insecurity. More than four-fifths of workers are unable to pay basic living costs. The consequence of the poverty wages received by many grocery workers is that more than two-thirds do not have secure housing. This includes being rent burdened and living in overcrowded housing.

Because of low wages and insufficient incomes to afford adequate homes, too many family members, roommates or even multiple families squeeze into housing units that are too small to accommodate them in order to spread the cost of rent across more people. Seventeen percent of frontline grocery workers experience overcrowding.

Half of nonsupervisory grocery workers are precariously housed because of their high level of rent burden. Fifty percent of frontline grocery workers are rent burdened.

U.S. Grocery Store Jobs

The Southern California strike/lockout of 2003 and 2004 was a critical turning point in grocery industry labor conditions. Although the California Attorney General later accused the supermarket employers of engaging in illegal collusion, the ripple effects for local unions bargaining after the strike include lower pay, more workplace stress and unpredictable work schedules.

Three decades of industry ownership concentration have tilted the playing field in favor of grocery giants, to the disadvantage of small brands and the workers who put food on the shelves in stores. The timing of the aggressive stance taken by grocery companies in 2003 followed a phase of significant consolidation among regional supermarket chains in the 1990s.

Kroger and Albertsons are industry giants. They employ 28 percent of U.S. grocery workers. Each local market area has come to account for a smaller part of the grocery corporations’ revenues and profits, making the employers less financially vulnerable to strikes and increasingly resistant to labor organizing.

Wages for nonsupervisory grocery workers throughout the United States peaked at $18.55 in 2003 (in 2024 dollars) and have decreased five percent since then. Grocery workers get an average of only 28.8 hours of work a week. This together with low wages results in poverty earnings.

An average of five percent of grocery workers employed by Kroger and Albertsons in the three states of California, Colorado and Washington were injured or become ill on the job every year from 2019 through 2023.

Physical traumas are the primary type of injury, but workers also experience respiratory harm and skin disorders from their work environment.

Grocery Industry Finances

Kroger’s sales increased 23 percent from 2019 to 2023, and Albertsons’ sales increased 27 percent. Between 2019 and 2024, Kroger’s net income and operating income grew by over 92 percent and 99 percent, respectively. At Albertsons, sales and profit growth was even stronger. Between 2019 and 2024, Albertsons’ net income and operating income grew by over 108 percent and 122 percent, respectively. Kroger and Albertsons’ stock has increased 77 percent more than the overall increase of value in the U.S. stock market.

Despite high profits, both Kroger and Albertsons have reduced staffing levels. In 2023, Kroger reported 14.1 percent fewer labor hours per store than in 2019. Albertsons’ labor shortfall is 13 percent of its 2019 staffing level. Both Kroger and Albertsons workers report missed breaks, departments closing early due to lack of staff, and tasks – such as the regular cleaning and maintenance of equipment – going uncompleted.

Feeding Wall Street

During the five-year period between 2018 and 2022, Kroger and Albertsons took a combined $15.8 billion in cash out of their businesses and sent it to shareholders in the form of stock dividends and buybacks. As a result, capital expenditures for stores have declined as a share of sales and reduced the capacity of these companies to sustain operations into the future.

Kroger and Albertsons have sought to fund payments to Wall Street by lowering labor costs and underinvesting in infrastructure. These cuts have had negative consequences on these companies’ store operations.

The catalyst for ecommerce investments was the acquisition of Whole Foods Markets by Amazon in 2017, which gave rise to investor speculation about the cutting-edge technology and logistical savvy that “the everything store” would unleash upon the traditional grocery store industry.

Ecommerce sales of groceries have grown significantly faster than overall grocery sales during the past several years. However, because it is not profitable, increased ecommerce sales require increased subsidies.

Kroger’s profits would have been 43 percent higher without the losses from ecommerce sales, and Albertsons profits would have been 31 percent higher.

Despite the drain on profits, both companies have continued to prioritize ecommerce over investments in the traditional in-store retail environment.

Poverty Wages Create Public Costs

The adult partners of grocery workers need to earn 79 percent more than the partner working in a grocery job in order for a four-person family to be able to pay for their basic needs. Grocery workers are unable to be equal partners in meeting the basic needs of their families.

The low earnings of nonsupervisory grocery workers make many of them eligible for taxpayer-supported social safety net programs.

Fifteen percent of nonsupervisory grocery workers receive federal Supplemental Nutrition Assistance Program (SNAP) benefits. Fifty percent more grocery workers depend upon Medicaid to pay for health care costs than workers in other industries.

Low wages and scant hours of work create hardship for grocery workers and public costs for taxpayers.

Spillover Benefits from Fair Wages for Grocery Workers

A $5.50 per hour raise for nonsupervisory grocery workers would stimulate almost twice as much new value in the economy.

The aggregate increased earnings of $476 million resulting from a $5.50 per hour raise for nonsupervisory grocery workers in the Colorado, Northwest Washington and Southern California study areas will stimulate the creation of the equivalent of 4,906 new local, year-round jobs and $944.6 million in added local sales.

The additional earnings of nonsupervisory grocery workers will be spent on housing (rent and mortgage payments, 18 percent), health services at hospitals, doctor’s office and clinics (12 percent), banking and insurance services (11 percent), on their own groceries and other retail goods (11 percent), as well as other household expenses.

Other grocery workers who are not covered by UFCW collective bargaining – such as managers and professional specialists – are likely to be indirectly benefited by the $5.50 per hour raise of their coworkers. They will receive an estimated 20.4 percent increase in their salaries as Kroger and Albertsons act to maintain wage parity in their workforces.

The added economic activity generated by a $5.50 hourly raise is projected to produce over $65.2 million in new tax revenue.

Public assistance enrollment and outlays are projected to decrease with a $5.50 per hour wage raise, with an overall estimated annual reduction of $65.8 million. This includes federal-funded, locally administered SNAP, Medicaid and cash aid benefits.

Press Coverage

Grocery workers at Ralphs, Albertsons, Pavilions and Vons approve new contract, covering 45,000 employees
By ABC 7 News, Los Angeles (July 12, 2025)

Grocery strikes spreading as pressure generates settlements in some areas
By Mark Gruenberg and Cameron Harrison, People’s World (June 17, 2025)

45,000 Grocery Workers Overwhelmingly Authorize a Strike at Southern California Ralphs, Albertsons, Vons, and Pavilions
By Los Cerritos Community News staff, Hews Media Group (June 11, 2025)

Union vote could stir summer disruptions in WA grocery stores
By Maddie White, King 5 TV (June 4, 2025)

SoCal Grocery Workers Union Announces Strike Authorization Votes Next Week
By City News Service (May 29, 2025)

Safeway, Albertsons union workers to vote next weekend on possible strike
By Heather Willard, Fox 31 TV Denver (May 25, 2025)

Grocery Giants Face Backlash as 63% of Shoppers Report Major Staffing Shortages at Ralphs, Vons
By Reporters Desk, Random Lengths News (May 20, 2025)

Trabajadores y clientes frustrados con el servicio en los supermercados en L.A.
By Isaac Ceja, La Opinión and MSN (May 21, 2025)

Kroger accused of price discrepancies by Consumer Reports
By Mark Hamstra, Supermarket News (May 15, 2025)

How Underinvestment Is Starving Grocery Stores And Feeding Wall Street
By Errol Schweizer, Forbes (May 12, 2025)

Foodstuffs: Grocery
By Jon Zerolnick, Retail+Roundup (May 12, 2025)