Why Is Food Insecurity So Widespread In The Grocery Industry?
Mass market grocery has a curious relationship with food access. On the one hand, grocers are among the largest donors to food aid organizations and help make SNAP benefits possible for millions. On the other hand, food insecurity, driven by low wages and precarity, is growing among grocery workers. Is food insecurity 2022’s biggest grocery trend?
The USDA defines food insecurity as a household-level economic and social condition of limited or uncertain access to adequate food, leading to hunger. According to a recent survey commissioned by UFCW, over three quarters of Kroger workers are food insecure. Kroger is the country’s largest full service grocery chain, with 10% market share and operating over 2700 stores and dozens of banners. The company earned $132 Billion in annual sales and $2.5 Billion in net income in 2021, on relatively slim 23% gross margins. Adjusted for inflation, since 2010, sales have grown by 36%, and net income by over 100%. Yet hourly wages have dipped 3-5% in value in that timeframe, with average wages under $30,000 a year.
Over 37,000 UFCW members at Kroger Divisions in Los Angeles, Colorado and Seattle responded to the survey, which was published by Economic Roundtable. One worker noted, “Every day it’s a struggle and the constant fear of getting fired is getting to me. I'm a single father and I live on pay check to pay check to make sure my kids eat.”
And last week, independent media outlet More Perfect Union revealed that the company was well aware of employees’ struggles. A 2018 leaked internal Kroger report warned that hundreds of thousands of company workers relied on food stamps and other public benefits just to get by. The report quoted an employee saying, “Something is wrong when the people who are actually making this company profitable are the ones deepest in poverty. I literally work at a grocery store and can’t afford to eat regularly.” Kroger declined to comment on the leak.
The 2018 report noted that in their headquarters state of Ohio, Kroger had the third highest number of employees receiving public assistance, after Walmart and McDonald’s MCD -0.5%. Most Kroger employees in Ohio were noted as living in poverty. Low wages were cited as the major reason why employees would quit. According to Payscale.com, the average take home pay for hourly store staff was just over $12 an hour for Kroger employees in 2021, with baggers, cashiers and clerks making as little as $8 an hour. The company recently announced wage investments to lift the average wage to $16 an hour. Livable wages, or the amount of income required for basic needs such as food and housing, tops $46,000 a year for Ohio and $50,000 in Virginia, Colorado, California and Washington, where Kroger operates hundreds of stores.
The 2018 Kroger report coincided with that year’s launch of Zero Hunger Zero Waste. The initiative partners with nonprofits such as Feeding America, Meals on Wheels and WWF to “help unlock critical food access in communities”. It includes an ask for customers to “round up” and donate to the initiative at check out. A Kroger press release in April 2021 highlighted over “$213 million in charitable giving to help end hunger in its communities”, while the affiliated Zero Hunger Zero Waste Foundation granted $16 Million to dozens of noteworthy organizations focused on food security and food waste across the country. The 2021 Kroger proxy statement likewise highlighted not only “racial disparities but food inequities” from Covid-19 and called out company efforts in “focusing on ways to support food-insecure households… we directed a record 1-year total of 640 Million meals to fight increased food insecurity”. The internal Kroger source who leaked the 2018 report noted that the company was focused on suppressing wages while burnishing their public image in order to deliver the promised 8-11% returns for shareholders.
Kroger is not alone in this curious dance with food access. Because Walmart is non-union, there is no comparable survey data to the UFCW report. So instead, here is some context for the country’s largest private sector employer. Nearly 1 out of 3 food retail dollars are spent at Walmart in the U.S. In 2021, Walmart had over $559 Billion in sales and $13.5 Billion in net income, on 25% gross margins. Walmart’s hourly take home for employees is $12.82, with many popular positions such as cashier and stock clerk averaging under $12 an hour. The company recently announced wage hikes to $12 an hour minimum and a $16.40 company average. Walmart is also the largest employer across much of the country, particularly Louisiana, Arkansas, Oklahoma, Mississippi and Alabama. The retailer is also the market share leader in many metro areas across these states, with 69% share in Fayetteville-Rogers Arkansas, 60% in Oklahoma City, 52% in Tulsa, and 56% in Gulfport-Biloxi Mississippi. The livable wage is at least $45,000 a year in these states. Food insecurity is over 16% in Arkansas, Alabama, Oklahoma and Louisiana and over 20% in Mississippi, with at least 1 in 5 children in each state food insecure.
Like Kroger, Walmart partners with nonprofits to alleviate problems that its business model may contribute to. Walmart has closely partnered with Feeding America with the Fight Hunger. Spark Change campaign, stating that “Walmart and Sam’s Club have long-encouraged associates and our customers and members to help fight hunger and spark change in their communities.” Walmart is one of Feeding America’s visionary partners and most generous donors, funding the distribution of over 265 million meals in the past year. Like Zero Hunger Zero Waste, Feeding America has encouraged customers to “round up” and donate at Walmart's cash registers. While vital to ensuring millions have food, such food charities have come under criticism for not advocating for higher wages and collective bargaining efforts.
And we can’t discuss food access with bringing up SNAP, among the world’s largest food aid programs. SNAP feeds nearly 9 times as many people as all food banks combined; over 42 Million people and 22.1 million households are enrolled. SNAP is crucial to the grocery industry. Over 80% of SNAP benefits are spent in supermarkets such as Kroger and Walmart, contributing $64 Billion in revenue annually, and growing. Researchers have estimated that up to 4% of annual Walmart revenues are derived from SNAP. And across 9 states that track SNAP beneficiaries, Walmart was by far their largest employer, with over 14,500 workers enrolled. Monthly SNAP benefits recently increased for the first time in 45 years, up $36.24 monthly per person to $157. Yet this may be stretched thin by the profit-driven food price inflation of these same major grocery retailers.
And here’s the big picture. Over 40% of Americans live in poverty or in low income households. The federal minimum wage has been held at $7.25 since 2009, despite recent market adjustments driven by retail and hospitality workers quitting by the thousands. And while most food insecure households are white, the racial disparities in food insecurity have worsened since 2019, with food insecurity increasing to 21% of Black and 17% of Hispanic households. It is not a coincidence that Black and Hispanic workers are overrepresented in many of the low wage jobs in the food systems, in particular retail and wholesale, and that up to 8 of the top 10 lowest paid jobs are in the food industry. Is it any surprise that ex-retail workers started the 1.6 million strong r/antiwork? Or that 7000 grocery workers are on strike in Colorado? Even Henry Ford, warts and all, realized he should pay his workers enough to afford his products.
So is food insecurity a key trend of mass market grocery in 2022? The broader food industry has been largely quiet on this phenomenon. Or maybe it is just a case of winners take all. But food insecurity may hint at a greater dynamic at play in the grocery sector, one that demands solidarity and collective action. Farmer, Bronx community organizer and food justice icon Karen Washington can break this down for us:
“Food apartheid” looks at the whole food system, along with race, geography, and economics. You say “food apartheid” and you get to the root cause of some of the problems around the food system. It brings in hunger and poverty. It brings us to the more important question: What are some of the social inequalities that you see, and what are you doing to erase some of the injustices?”
