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Loblaw, Metro scrap premium pay for grocery workers

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Loblaw Companies Limited Executive Chairman Galen Weston speaks during the annual general shareholders' meeting in Toronto, May 2, 2013. Canada's largest grocer and the company behind the discount clothing brand Joe Fresh, is committed to staying in Bangladesh, but will take steps to improve facilities, its top executive said on Thursday. More than 400 factory workers were killed after an illegally built building that housed a number of apparel factories collapsed in Savar, a commercial suburb of Dhaka, Bangladesh.   REUTERS/Mark Blinch (CANADA - Tags: BUSINESS TEXTILE DISASTER)
REUTERS/Mark Blinch

Grocery retailers are preparing to end the $2 per hour pay raise provided to frontline workers through the coronavirus pandemic.

Loblaw (L.TO), Metro (MRU.TO), Empire (EMP) and Walmart Canada have each confirmed that the temporary pandemic pay bump will be coming to an end. Loblaw, Metro and Empire, which operates the Sobeys chain, said the pay increase will end on June 13. Walmart did not specify a date.

In a letter sent to PC Optimum customers on Thursday, Loblaw executive chairman Galen Weston said it was “the right time” to end the temporary pay premium, which was introduced when the pandemic began in mid-March.

“Things have now stabilized in our supermarkets and drug stores,” Weston wrote.

“After extending the premium multiple times, we are confident our colleagues are operating safely and effectively in a new normal.”

Metro spokesperson Marie-Claude Bacon said in a statement the company will pay full-time and part-time employees bonuses of $200 and $100, respectively, as the company ends the premium pay.

“We are no longer working under the crisis conditions that prevailed from March through May as grocers were amongst the only retailers open to the public,” Bacon said.

“Demand is stabilizing as other business are reopening. A host of prevention measures have been implemented and adopted, by both employees and customers, and we are now transitioning into recovery while not letting our guard down.”

Michael Medline, chief executive of Sobeys, sent a letter to employees on Friday announcing the end of its “Hero Pay” program, saying that it was “a natural time” to end the program with provinces reopening and customer behaviour shifting to normal. He said the company will be offering bonuses to employees, with specific details about the program to come.

Walmart Canada, which implemented the pay boost, said in a statement that it has also returned wages to pre-pandemic levels.

Loblaw, Metro and Walmart were three of several retailers that offered a pay increase to workers through the coronavirus pandemic. Empire Ltd., which operates several grocery retailers including Sobeys, also offered a temporary top up of wages for their employees. Empire has not responded to a request for comment.

The United Food and Commercial Workers union, which represents thousands of grocery workers across Canada, released a statement on Thursday calling on companies to continue paying workers the premium wage.

“UFCW Canada is disappointed that employers in various sectors across Canada are choosing to stop paying COVID-19 premium pay while the pandemic continues, and some provinces are still enforcing precautionary measures,” the union said in a statement.

“Premium pay should be maintained throughout the pandemic.”

Grocery stores have seen sales surge amid the coronavirus pandemic.

Sales at Loblaw jumped in the company’s most recent fiscal quarter, which included the first three weeks of March, when the pandemic struck and governments began enforcing lockdowns across the country. The company an extra $751 million in sales in that quarter related to the coronavirus pandemic, while overall sales increased by $1.1 billion, or 10.8 per cent, to $11.8 billion.

Expenses also increased, as the company spent more on expanding online capabilities, increasing staffing and wages, cleaning and safety supplies, installing plexiglass barriers, and social distancing promotion. The measures cost Loblaw $90 million every four weeks, the company said.

At Metro, sales in its most recent quarter hit $3.99 billion, up from $3.7 billion during the same time last year, representing an increase of 7.8 per cent. The company estimated that COVID-19 contributed to a $125 million increase in sales in the quarter.

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