The Kroger Co. is using corporate tax savings from the federal Tax Cuts and Jobs Act to step up investment in its workforce.
Leading an array of employee-focused initiatives is a new education assistance program called Feed Your Future, part of a fivefold increase in Kroger’s total annual investment in worker education. The Cincinnati-based company said it also plans to raise wages for store associates, boost the 401(k) benefit and enhance associate discount and support programs.
Rodney McMullen, chairman and chief executive officer of Kroger, called the Tax Cuts and Jobs Act “a catalyst” that will help the retailer accelerate investments in Restock Kroger, its companywide initiative to redefine the customer experience.
"Sharing the benefits of tax reform with our associates and customers will create a more sustainable and stronger business model to support Restock Kroger and beyond,” McMullen said in a statement.
Under Feed Your Future, Kroger and its subsidiaries will offer associates an employee education benefit of up to $3,500 annually for continuing education and development, including a high school equivalency exam, professional certifications and advanced degrees. The benefit, which can run to $21,000 over the course of employment, also will now cover all full- and part-time associates after six months on the job.
The program, too, includes a new educational leave of absence that lets associates take time off work to focus on approved studies while maintaining a role with the company and their seniority.
"We care about our nearly half a million associates' growth and development, and we believe investing in education will support and encourage lifelong learning and reinforce our 'come for a job, stay for a career' opportunity culture," McMullen said. "We believe that making education benefits available to more associates and at more generous levels than ever before is the best way to support their future."
In certain markets, Kroger said it will leverage tax savings to lift starting wages and overall wages. The company noted that the Tax Cuts and Jobs Act allowed it to accelerate some of the previously announced $500 million investment in associate wages, training and development over the next three years under Restock Kroger.
For example, in Cincinnati last month, Kroger associates ratified a labor agreement with UFCW Local 75, which the company said enabled starting wage and overall wage gains in various markets nationwide. The pact raised starting wages to at least $10 per hour and expedited wage progressions to $11 an hour after a year of service for store associates in the Cincinnati-Dayton area. The increases became effective April 1.
Also on the financial front, Kroger and its subsidiaries will raise the company’s 401(k) match to 5% of pay, compared with a 4% match currently.
And more associates around the country will be able to take advantage of a 10% discount off “Our Brands” products, a benefit that Kroger said is being made more consistent across supermarket banners. The company added that the discount saved associates $53 million in 2017, and new discounts on general merchandise, home, apparel, and jewelry will be offered.
In addition, Kroger is committing another $5 million to its Helping Hands program, an internal support fund that aids associates during hardships. Last fall under the program, the company awarded $700,000 in grants to support 1,100 associates grappling with hurricane-related hardships.
"We care about our associates,” said Tim Massa, group vice president of human resources and labor relations at Kroger, “and we took the time to thoughtfully consider how to live our purpose and offer meaningful, personalized benefits while helping individuals, families and communities thrive today and in the future."