How Underinvestment Is Starving Grocery Stores And Feeding Wall Street

Forbes

12-05-2025

A new report on Kroger and Albertsons reveals the stunning impacts of continued underinvestment and understaffing in retail stores, all while stock buybacks and Ecommerce losses have skyrocketed. Commissioned by a group of retail and wholesale unions currently in contract negotiations, Bullies At The Table surveys employees across stores in three states and underscores how customers and retail workers are paying the price for the misguided priorities of two of America's largest grocery chains.
Kroger and Albertsons are, respectively, the second and third largest U.S. grocery chains (after Walmart) and employ 28 percent of U.S. grocery workers. Both grocers rank in the top three in market share across dozens of metro areas where they operate, including significant dominance in Seattle, Chicago and much of California. A federal judge recently blocked a two year long, billion dollar attempt by the two chains to merge. Kroger's longtime CEO resigned in March and the CEO of Albertsons retired in early May. Both companies face significant headwinds in the grocery industry, including impending tariffs, competitive pressures from non-union discounters and specialty chains, and a slowdown in consumption driven by years of price increases. Albertsons management in particular has disclosed to investors concerns about the company's longterm fiscal health and retail readiness.
Grocery workers surveyed in Bullies At The Table cited understaffing and pay that was not commensurate to their work as major concerns at the chains, while the amount of work they have to complete during their shift has continued to increase. Their stores are also unable to provide good customer service, with tasks such as the regular cleaning and maintenance of equipment also going uncompleted. Surveyed workers also said that product sits in their stores' backrooms because there are not enough staff to stock store shelves.
Marshay Clark, a bakery clerk at a Safeway in South Auburn, Washington stated, "They've been cutting hours, and they've been expecting us to fit eight hours' worth of work into these shorter, five and half or six-hour shifts. As the only person in my household who earns an income, I'm struggling to get by and I'm more stressed at work."
The 2003-2004 Southern California grocery strike and lockout was a turning point in the fortunes for such Kroger and Albertsons workers. Since that time, scheduled hours dropped by eleven percent, actual buying power of hourly wages decreased five percent, weekly earnings declined by fifteen percent and the pay gap between the earnings of grocery workers and their counterparts in all other industries jumped from thirty two percent in 2003 to fifty percent in 2024. The result is that fifteen percent of nonsupervisory workers at the two chains receive Supplemental Nutrition Assistance Program (SNAP) benefits.
More than four-fifths of surveyed workers are unable to pay basic living costs and more than two-thirds do not have secure housing, while more than nine out of ten workers reported price gouging at their stores, that their company is raising prices higher than production costs. As a consequence, customers cannot afford to buy the healthy foods they used to. Such pricing moves have helped drive profitability and record shareholder payouts across the food industry over the last four years.
While employee real wages and spending power dropped off, Kroger and Albertsons' sales and profits skyrocketed. Between 2019 and 2024, Kroger's net income and operating income grew by over 92 percent and 99 percent, and Albertsons' net income and operating income grew by over 108 percent and 122 percent. And from 2018 and 2022, Kroger and Albertsons took a combined $15.8 billion in cash out of their businesses and sent it to shareholders in the form of stock dividends and buybacks. The report documents that as a result, 'capital expenditures for stores have declined as a share of sales and reduced the capacity of these companies to sustain operations into the future… Kroger and Albertsons have sought to fund payments to Wall Street by lowering labor costs and underinvesting in infrastructure.' The two companies also announced over $10 billion in additional buybacks in 2024 after their failed merger.
Ecommerce, including the Kroger-Ocado partnership, has been a loss leader for both chains and drag on profitability. The report estimates that Kroger's profits would have been 43 percent higher and Albertsons profits would have been 31 percent higher without the losses from Ecommerce.
In order to fund Wall Street payouts and compensate for these Ecommerce losses, both Kroger and Albertsons reduced staffing levels in stores. In 2023, Kroger reported 14.1 percent fewer labor hours per store than in 2019 and Albertsons' reported 13 percent lower staffing levels. and this potent combination of market dominance and cost cutting has been well-received by investors. In that timeframe, the value of Kroger and Albertsons' stock increased at a faster rate than the U.S. stock market as a whole.
"I juggle multiple roles—opening check stands, managing self-checkout, unloading pallets—while the front end falls apart. We're working with a skeleton crew, yet CEOs give billions to shareholders instead of investing in our stores," said Paszion Horner-Smith, a front-end supervisor at Vons in Granada Hills. "Customers wait in 35-minute lines, endure frustrating self-checkouts, and even abandon full carts out of sheer frustration," she added.
Bullies At The Table was partly underwritten by trade unions representing 65,000 grocery workers whose current contract expired on March 2, 2025 and are fighting for 'living wages, affordable healthcare benefits, a reliable pension, and more staffing and better working conditions for a better customer experience'. The report picks up where a previous study of Kroger's business model left off. This 2022 survey commissioned by UFCW found that over three quarters of Kroger workers were food insecure and fourteen percent were housing insecure. A 2018 leaked internal Kroger report showed that hundreds of thousands of company workers relied on food stamps and other public benefits in order to make ends meet. The 2018 report also coincided with that year's launch of the Kroger Zero Hunger Zero Waste. The source who leaked the 2018 report noted that the company leveraged such initiatives while suppressing wages in order to deliver higher returns for Wall Street, reinforcing the inequality that causes hunger. A recent survey by Food Chain Workers Alliance illustrated that the crisis of food insecurity and poverty among food workers is widespread and severe. Frontline food workers were 93% more likely to be food insecure than non-food workers, with nearly one in five frontline food workers being insecure and food workers 60% more likely to rely on SNAP.
For grocery clerks, whose workdays revolve around food and whose livelihoods are dependent on how much food their customers can afford, Bullies At The Table documents a case both of insult to injury and Robin Hood in reverse: grocers cutting hours, underinvesting in stores, suppressing wages, and raising prices to boost earnings and shareholder payouts, while taxpayers pick up the tab of increased food insecurity and medical needs. These two powerhouse retailers' business models and priorities have gone far afield of what they ostensibly should be doing: providing well-staffed stores and affordable, healthy food to their customers, with living wages and fulfilling jobs to their staff. While executives and investors have done quite well, retail workers and store customers alike deserve so much better.
The author did not receive responses to requests from comments from Kroger and Albertsons.