Business

Jesse Jackson calls to expand Kroger boycott over its shuttering of stores in minority neighborhoods

USA Today NetworkAlexander Coolidge and Sharon Coolidge, The Cincinnati Enquirer Published 12:49 p.m. ET April 10, 2018 | Updated 7:24 p.m. ET April 10, 2018

CINCINNATI — The Rev. Jesse Jackson called Tuesday for expansion of a boycott he is waging against Kroger to protest grocery store closures in minority communities.

He also said he wasn’t sure whether he believed Kroger’s claims that a store in this city’s Walnut Hills neighborhood was unprofitable before it was closed last year. More than three-quarters of Walnut Hills residents are black, and the neighborhood’s median household income in the 2010 Census was $29,000, 15% less than the city as a whole.

Jackson came to the city of Kroger (KR) corporate headquarters to protest the retreat of the nation’s largest supermarket chain from here, Memphis and other markets. Minority communities suffer when local consumers lose access to groceries, he said.

Look at the attention suburban stores are getting … with wine and services,” Jackson said. These closed stores, “someone could make these profitable,” but sometimes Kroger doesn’t want competition from another store in the same city.

► April 10: Kroger to hire 11,000 supermarket workers, will also raise wages
► March 23: Retail giants Kroger and Target are in merger talks, report claims
► March 20: Has online grocery delivery reached a tipping point?

Various Krogers have been picketed, including stores in Georgia and Kroger-owned Fred Meyer stores in the West, he said. Beyond additional demonstrations, Jackson was vague on specific actions to be taken.

“Clearly, if you look around, there are people here who eat and buy groceries,” he said. “Is it a management issue or a consumer issue? People are certainly consuming.”

Jackson called for the boycott last week. Kroger closed 41 stores last year out of nearly 2,800 locations.

“Kroger in the heart of the black community pulled out — it created a food desert,” Jackson said Monday. “It has a negative impact on the community.”

Late Monday, Kroger defended its store closure decisions, saying they must turn a profit to serve customers.

“Because we operate a ‘penny profit’ business, we must sometimes make tough decisions in order to keep our prices low for all customers,” Kroger said in a statement, adding no jobs were lost after it cut the Walnut Hills store or three recent closures in Memphis. The company pledged to stay “an active community citizen” and said it was “always open to suggestions and dialogue.”

Kroger closed its Walnut Hills store a year ago after 34 years of operation — more than 20 of them unprofitable. Company officials said the store was projected to lose $900,000 last year if it had stayed open on top of the nearly $5 million it had lost since 2010.

The closure coincided with the reopening of an expanded Kroger Marketplace store 1.3 miles away.

On Tuesday, Kroger officials met with Jackson at their downtown headquarters but were hesitant to speak about the meeting.

► March 19: Kroger stops selling magazines featuring assault rifles
► March 1: Kroger: No more gun sales at Fred Meyer stores unless you’re 21

The company was “open to further conversation and dialogue,” the company was “open to further conversation and dialogue,” Kroger spokeswoman Kristal Howard said. She added senior leadership will meet protesters over store closures.

She declined to provide a timeframe for the discussions.

As digital competition heated up for supermarkets, Kroger has retooled its store spending in recent years.

Two years ago, Kroger announced plans to spend more than $4 billion in capital expenditures in 2016 — much of it on supersizing supermarkets into Marketplaces as well as refreshing, relocating or refurbishing physical stores.

► Jan. 25: Kroger considers teaming up with China’s Alibaba against Amazon
► Jan. 14: Kroger may acquire digital bulk retailer Boxed

Those plans were pared to $3 billion initially amid a price war with Walmart, deflation woes and digital juggernaut Amazon’s 2017 takeover of Whole Foods. Kroger, Walmart and other grocers have been scrambling since this past summer, rolling out their own digital strategies as Amazon expands home delivery of supermarket staples.

While Kroger still is spending $3 billion a year on its physical stores, more of that money has been moved toward ramping up functions that support digital sales. Kroger now offers its buy-online, pickup-at-the-store ClickList service to more than a third of its stores.

Kroger also is ramping up partnerships across the country to offer home delivery services — now available in 45 major U.S. markets.

Follow Alexander Coolidge and Sharon Coolidge on Twitter: @alexcoolidge and @SharonCoolidge

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