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QFC to close 2 Seattle stores, blames City Council's extra pay mandate

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SEATTLE - The QFC grocery chain announced Tuesday it will close two of its Seattle stores in part because of the city's new law mandating $4 an hour pay raises for grocery store workers

The two QFC stores - located at 416 15th Ave. East and at 8400 35th Ave. NE - will shut down for good on April 24, the company announced.

Both stores operate at a loss and the grocery chain says it can't afford to operate them with the new city-mandated higher wage in place.

"Unfortunately, Seattle City Council didn’t consider that grocery stores – even in a pandemic – operate on razor-thin profit margins in a very competitive landscape," the company said in a prepared statement. "When you factor in the increased costs of operating during COVID-19, coupled with consistent financial losses at these two locations, and this new extra pay mandate, it becomes impossible to operate a financially sustainable business."

But a union that represents local retail workers says the company's decision to close two QFC stores is "a case of over-the-top greed and bullying" and "a transparent attempt to intimidate other local governments from passing ordinances that would provide hazard pay to front line grocery store workers."

Seattle Mayor Jenny Durkan says both locations are already slated to close. “Kroger is a huge conglomerate that has made billions in profits during COVID because its frontline workers continued to show up every day, despite the risk to themselves. It is unfortunate that Kroger chose to accelerate closure of stores they had already planned to close, and then blamed it on the need to pay the very workers who brought them these huge revenues," the mayor's office said in a statement.

Hunters Capital, a real estate company in Seattle, bought the block where the 15th Ave E QFC is located in 2017. According to the company's website, they have plans to redevelop.

"Essential workers, our local government, and our communities will not be threatened by this corporate bullying," the United Food & Commercial Workers Local 21 said in a prepared statement.

QFC's store closure announcement comes about two weeks after two grocery industry trade groups filed a lawsuit against the city of Seattle over its new law mandating the pay raises for grocery stores.

The suit was filed Wednesday by the Northwest Grocery Association and the Washington Food Industry Association in U.S. District Court in Seattle. It alleges the city's law interferes with the collective-bargaining process between grocery stores and unions and also "picks winners and losers" by singling out large grocery companies.

Seattle's law was approved by the city council in an emergency move Feb. 1 and took effect two days later. The mandate affects any grocery store with more than 500 employees worldwide and as many as 10,000 workers in Seattle are eligible for the pay boost.

QFC is providing the mandated extra pay to all associates, including those in the two locations scheduled to close as well as its other 13 Seattle stores.

The company says it already offers its employees competitive wages, comprehensive health care and a reliable pension. QFC’s average hourly wage in Seattle is about $20 an hour and total compensation is over $25 an hour, including health care and pension benefits, the company says.

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"Seattle City Council’s misguided mandate targets one industry and not only oversteps our collective bargaining rights, but it altogether exempts several non-union competitors," QFC said in its statement. "City Council and the mayor refuse to answer why their proposal does nothing to raise wages for the city’s own frontline workers, who are serving with the same dignity and determination as our own associates."

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