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Below is a brief excerpt from complimentary research note written by our Consumer Staples analysts Howard Penney and Daniel BiolsiIf you are an institutional investor interested in accessing our research email sales@hedgeye.com

Grocery Union Demands Hero Pay Reinstated  - 6 23 2020 12 02 48 PM

The United Food and Commercial Workers International Union (UFCW), which represents 1.3M workers in grocery stores and other retailers have called on the major supermarket chains to reinstate hazard pay.

The union cited the increases in COVID-19 cases in at least ten states. Many businesses extended additional hourly pay or bonuses for front line workers during the initial months of the pandemic.

Kroger and Stater Bros phased out their respective bonus programs in mid-May while Albertsons’ ended on June 13. After the union complained about the initial phase-out plans, Kroger announced a $400 bonus for full-time workers and $200 for part-time workers that totaled to $130M in additional pay.

Walmart is paying a second round of bonuses of $300 for full-time workers and $150 for part-time workers. Sobey’s (Empire) ended its hero pay on June 13. Stop & Shop extended their 10% bonus through July 4. H-E-B extended their extra pay through June 21.

Not all companies paid their front-line workers more, but most have ended it by now, including Amazon, Molson Coors, Starbucks, and Rite Aid. Only 25% of employers that required employees on-site offered hazard pay, according to WorldatWork.

Workers employed in retail were more likely to receive additional compensation, with 46% of supermarkets offering hazard pay compared to 29% of healthcare employers.

One key difference for Kroger and Albertsons is their unionized workforce and the demands they make, notably when the grocers are outperforming.