Kroger uses tax savings to introduce education benefit
Kroger will spend about $130 million more per year on employee benefits, including a more generous 401(k) benefit and a new education-assistance perk that will allow both part- and full-time workers the chance to go back to school.
The supermarket giant, the country’s third largest employer, announced its new employee investments this week, attributing the enhanced offerings to its estimated $400 million savings as a result of recent tax law changes. Kroger joins a growing list of employers — including Chipotle, CVS Health and Disney — that have enhanced benefits due to President Trump’s tax overhaul, which in December lowered corporate rates from 35% to 21%.
Kroger’s new education benefit, called Feed Your Future, will offer employees 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, will cover all full- and part-time associates after six months on the job. Under the new benefit, Kroger expects to increase by five times its total annual investment in employee education.
“Feed Your Future will support both full- and part- time associates, wherever they are on their personal education journey,” says Rodney McMullen, Kroger’s chairman and CEO. “In this way, we’re offering more than a one-time award — we’re offering an investment in our associates’ future.”
Nationwide, Kroger employs nearly 500,000 people.
The Feed Your Future program, too, will include a new educational leave of absence that allows “associates to take time off work to focus on approved studies, while maintaining their seniority,” a Kroger spokesperson explained. Eligible associates may be granted an educational leave of absence, without pay, for up to a maximum of six months. The associate must be pursuing higher education full time at an accredited college or university, a technical or vocational school or a specialized training program. Employees may request approval for an educational leave of absence an unlimited number of times, returning to work during semester and short-term breaks.
The new education benefit is also seen as a way to recruit and retain talent, McMullen says.
“We believe investing in education will support and encourage lifelong learning and reinforce our ‘come for a job, stay for a career’ culture,” he says.
There has been a recent wave of initiatives among retailers to invest more in employee perks — notably education benefits — to contend with a tightening labor market and high employee turnover rates. Lowe’s, McDonald’s and Taco Bell are among the companies that this year have introduced or increased education benefit investments.
The education benefit is one of several new enhancements that will be funded from Kroger’s expected annual tax savings.
Kroger is increasing its 401(k) match to 5%, up from 4%, starting June 1. The company also is expanding its employee discount program for associate shopping in its stores and investing $5 million more into its Helping Hands program, an internal fund to aid associates during hardship. Last fall under the program, the company awarded $700,000 in grants to support 1,100 associates grappling with hurricane-related hardships.