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Kroger announces voluntary retirement offering for non-store employees

Cincinnati-based grocer, The Kroger Co., announced on Thursday, Dec. 15, a one-time voluntary retirement offering to as many as 2,000 of its non-store associates.

The buyout is part of the company’s “ongoing cost controls” to maximize investment directly related to its Customer 1st Strategy, and reduce costs in areas not affecting the customer experience, such as in stores, according to Kroger CEO Rodney McMulen in a company press release.

Screen-Shot-2016-12-16-at-10.05.39-AM "Kroger would not be the successful company it is today without the incredible efforts of all of our associates. We believe a generous Voluntary Retirement Offering is in line with our company values and recognizes the long careers many of our associates have had with Kroger," said McMullen. "Kroger is committed to our operating model of lowering costs to invest in the areas that matter most to our customers."

Because the program is voluntary, savings and cost will be based on the number of associates who accept the offer between now and early March, when the consideration periods expire, Kroger stated in the press release.

Eligibility for the voluntary retirement offering will generally include administrative associates who meet certain criteria related to age and years of service as of Dec.1, 2016. The offer does not include store and district associates, senior officers, and supermarket division presidents. Expenses related to the offer will be reflected in Kroger's first quarter 2017 results. The effect of this plan was not included in the company's initial comments on fiscal 2017.

The announcement from the company, which employs some 431,000 workers across the United States, comes on the heels of weakening sales, which early this month posted non-fuel comparable-store sales of 0.1 percent in its fiscal third quarter — it’s lowest quarterly sales gain in 13 years. The move is also in line with other retailers of late, including Pittsburg-based Giant Eagle, which laid off roughly 35o corporate employees as part of a cost-cutting plan.

“This admirable move by Kroger is not as dire as direct layoffs, but could be a step in that direction, depending on numbers of volunteers,” said Bill Kirk, an analyst at RBC Capital.