- A Kroger store management overhaul involving hundreds of firings, demotions, and transfers has sparked fear and uncertainty in some stores, current and former employees told Business Insider.
- Some Kroger employees are worried that the company could be planning additional cuts to jobs and labor hours.
- “The chaos in the stores right now is not giving the impression that they are lightly restructuring,” said an employee of Smith’s, which is owned by Kroger.
- In a statement to Business Insider, a Kroger spokesperson said the staffing changes were designed to keep resources close to the customer and help deliver a better store experience.
- Visit Business Insider’s homepage for more stories.
A Kroger store management overhaul involving hundreds of firings, demotions, and transfers has sparked fear, uncertainty, and “chaos” in some stores, according to current and recent employees.
The restructuring, which Business Insider first reported, has affected hundreds of people in management positions, some of whom had worked for the company for decades, sources said. Store managers and assistant store managers are among the roles impacted by the cuts.
“This is a huge shock,” one fired store manager told Business Insider. “I’m the breadwinner of the family. Now I’m back on the street trying to figure out how I’m going to feed my family.”
This worker and 10 others spoke to Business Insider on the condition of anonymity for fear of reprisal.
Kroger representatives delivered the news to affected employees over the course of several days through private meetings, some lasting about 15 minutes, which were held at corporate offices, hotels, and other meeting spaces outside stores, employees said.
In some cases, fired employees were told they were prohibited from returning to the stores where they worked without an approved escort.
Kroger said the staffing changes were designed to keep resources close to the customer and help deliver a better store experience.
“Like many industries, grocery retail is navigating through disruptive change,” a Kroger spokesperson told Business Insider. “These are not easy decisions, but we do believe they are necessary to ensure the Kroger family of companies can continue to deliver fresh, affordable food for customers, jobs with good benefits and growth opportunities, and our commitment to ending hunger in our communities.”
Kroger employees fear additional cuts
“They met us at a hotel,” said one former assistant manager, describing the meetings where workers learned whether they still had a job. Employees whose roles were impacted by the changes were generally given at least one of four directives: “you were going to be laid off, fired, transferred, or demoted,” she said.
This person found out in one of these meetings that she would be demoted from her salaried position earning more than $60,000 annually to an hourly job in another store. She said the change, which was effective immediately, was expected to wipe out one-third of her annual income.
“I was in shock,” she said. “I just wanted to get out of that meeting, go to my car and call my husband and cry.”
Some workers whose jobs haven’t been directly impacted by the changes said they are fearful that the company could be planning additional cuts or reshuffling more positions.
“The chaos in the stores right now is not giving the impression that they are lightly restructuring,” said an employee of Smith’s, which is owned by Kroger. “From an employee’s point of view, this feels like they’re either being bought out, having extreme financial trouble, or trying to save money by cutting out their store-level employees who are already running thin as it is.”
A former Kroger employee with close ties to current workers described the cuts as a “nightmare.”
“The store employees are all uptight and scared, everyone feels threatened,” this person said.
Kroger did not directly address a question from Business Insider on whether the company was planning additional layoffs or firings.
Restructuring targets middle-management roles
Kroger is the largest traditional grocer in the US with more than 450,000 employees across more than 2,700 stores under banners including Kroger, Fred Meyer, Fry’s, Smith’s, Harris Teeter, Ralphs, Mariano’s, and King Soopers.
Many of Kroger’s hourly employees are unionized. The recent restructuring has largely targeted salaried, non-union middle-management roles.
Some of the positions that have been affected by the changes include store managers, assistant store managers, and district coordinators, who oversee specific departments across multiple stores, sources said.
The company said the changes were made “with an eye toward keeping resources close to the customer.”
“Our focus on the store experience is why our stores continue to hire for hourly positions today,” the Kroger spokesperson said. “Today, we have more than 10,000 hourly store positions open across our family of stores. These are not management roles but front-line associates.”
Kroger CEO says transformation is ‘incredibly difficult’
Kroger is making these staffing changes after announcing last month that it wouldn’t hit its three-year target of $400 million in incremental operating profit as part of the transformation plan that it calls “Restock Kroger.”
“Transformation is incredibly difficult, and that’s the journey we are on with Restock Kroger,” Kroger CEO Rodney McMullen said on a call with analysts in September. “As we reflect on this journey, we want to be transparent about what went according to plan and what didn’t go as anticipated.”
Restock Kroger is a three-year plan focused in part on investing in online grocery and improving profitability. While the company recently delivered disappointing news on its profitability goals, Kroger also announced improvements in other metrics.
For example, in the most recent quarter, same-store sales grew 2.2% excluding fuel, compared to a 1.6% gain in the previous year, and digital sales grew 31% year-over-year.
“Kroger delivered our best identical-sales results since the launch of our transformational plan,” McMullen said on the analyst call. “Our internal customer measures are improving even faster than our identical sales growth.”
‘More and more hours cut, more and more piled on our plates’
Customer feedback may be improving, but some employees say they are feeling pinched.
A Midwest Kroger employee said morale in her store prior to the cuts was already low, with many people complaining that they didn’t have enough time to complete all the work assigned to them within their shifts.
“Morale… has been on a steady decline for quite a while, this was just an additional ‘kick ’em while they’re down,'” she said. “More and more hours cut, more and more piled on our plates yet we are still expected to give our customers unsurpassable customer service.”
A Kroger employee at a Southeast store said resentment is growing among their coworkers, and that turnover rates are disturbingly high.
“People leave because there’s not enough hours and that’s because the budget has been reduced, in my opinion,” this person said. “When you don’t have enough people to keep the stores going, that’s when customer service suffers.”
Kroger did not address a question on whether it has cut labor hours in stores. The company instead highlighted its investments in workers’ wages.
“In addition to creating more than 100,000 new American jobs over the past decade, we are investing more than half a billion dollars in associate wages, and today, our average hourly rate is over $20 with comprehensive benefits factored in – benefits that many of our competitors don’t offer their employees,” the Kroger spokesperson said.
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