Big Household Retail Corporations Saw Profits Skyrocket by More Than $14.6 Billion During the Pandemic – Yet Most Ended Extra Pay for Employees
The COVID-19 pandemic is raging out of control, and the profits of the biggest U.S. corporations providing essential household goods – companies such as Amazon, Walmart and Kroger – are booming. That’s good news for executives and shareholders, but most essential workers staffing the front lines of these businesses are no longer receiving extra pay despite their ongoing – in fact, rising – risk of infection.
Starting in March and April, these companies offered workers additional compensation. Sometimes called “hazard pay” or “thank you bonuses,” some added as much as $2 to employees’ hourly wage while others offered occasional lump sum bonuses.
Public Citizen analyzed the top 15 U.S.-based household retail corporations’ most recent quarterly earnings reports and their pandemic pay policies. The analysis revealed that, despite a combined $14.6 billion increase in profits in the companies’ profits in fiscal year 2020 compared to the same time frame in fiscal year 2019, nine halted additional pay for workers.
Descriptions of pandemic pay policies are based on the companies’ press releases and news reports. Public Citizen reached out to each company to confirm the accuracy of the descriptions of the company pay policies included in the appendix. (Six of the 15 companies responded: Albertsons, BJ’s Wholesale Club, Home Depot, Kroger, Publix and Target. This report does not weigh one form of pay over another – only whether the additional pay continues or has ceased.)
Additionally, six of the companies bought back a combined $3.7 billion in stock and seven of the companies announced plans in the late summer and fall to buy back $17.8 billion in their own stock. Of the 12 companies spending billions or hundreds of millions on stock buybacks, only three – Costco, Home Depot and Lowe’s – continuously offer workers additional pay.
- The 15 top U.S.-based household retail corporations collectively made $60.8 billion in profits so far in fiscal year 2020 – an increase of $14.6 billion over 2019’s profits over the same time frame. Nine have completely stopped providing any additional pay to frontline workers, despite the worsening pandemic. The nine that stopped providing additional pay together made $10.5 billion more in profits in fiscal year 2020 than in 2019.
- Twelve of the companies are spending big on stock buybacks. Six reported a combined $3.7 billion in stock buybacks in the latest quarter while seven announced plans in the late summer and fall to spend a combined $17.8 billion on buybacks. Of the 12 companies spending billions or hundreds of millions on stock buybacks, only three – Costco, Home Depot and Lowe’s – continuously offer workers additional pay.
- Four companies that stopped offering employees extra pay – Albertsons, BJ’s Wholesale Club, Dollar General and Walmart – together spent nearly $3 billion on stock buybacks, according to their latest quarterly earnings reports.
- Amazon has tripled its profits to $6.3 billion in its third quarter, up from $2.1 billion in the same quarter of 2019. So far in 2020, Amazon has reported $14.1 billion in profits – $2.8 billion more than last year. The company concluded its $2-an-hour increase in worker pay at the end of May and awarded workers a “special one-time Thank You bonus” of $500 million – about 8% of the third quarter profits – at the end of June.
- Despite the $15.6 billion in profits Walmart reported making so far in fiscal year 2020 – an increase of $4.9 billion, or 45%, over 2019 – the retailer hasn’t provided frontline hourly workers additional pay since July. The retailer paid full-time frontline hourly workers a bonus of $300 and part-time workers a bonus of $150 three times since March. The $1.1 billion Walmart paid in bonuses is 7% of its fiscal year 2020 profits.
- Grocery chains Albertsons and Kroger’s latest quarterly earnings both show profits that more than doubled compared to the previous year – and both stopped providing extra pay to employees months ago. Albertsons spent $1.8 billion on stock buybacks in the previous quarter and Kroger announced in September its intention to spend $1 billion on stock buybacks.
- Just four of the companies – Costco, Lowe’s, Home Depot and Publix – persist in providing employees with ongoing extra pay. Target has paid bonuses to hourly frontline workers twice and has separately paid two bonuses to managers and salaried employees, but has not provided extra pay continually, as the four above have.
There are more than 4.6 million retail sales workers in the U.S., and the mean wage they earn is $12.23 an hour, according to the Bureau of Labor Statistics.
A recent peer-reviewed study finds that the infection rate among grocery workers in one store reached an alarming 20%. In October, Amazon said there had been nearly 20,000 cases among its workforce. At least 238 members of the United Food and Commercial Workers – the largest union representing grocery workers – have died from illness caused by the coronavirus.
Across the top U.S.-based household retail corporations, profits surged in the most recent quarter. Collectively, these companies earned more than $10.1 billion more in profits in the latest quarter of 2020 compared to 2019. Comparing the latest quarter of 2020 with the same quarter of 2019, their average increase in profits was 121%, with six more than doubling their earnings.
Table 1: Top 15 U.S.-based household retail corporations, ranked by $ increase in profits in the latest quarter between 2019 and 2020.*
|Corporation||Net profits, latest quarter 2020||Net profits, comparable quarter 2019||Difference between 2020 and 2019||% Increase|
|BJ's Wholesale Club||$122,796,000||$55,092,000||$67,704,000||123%|
*Albertsons and Big Lots profits exclude large, one-time sale-leaseback transactions, and Lowe’s excludes a loss on extinguishment of debt in latest quarter. See appendix in full PDF version for sources and calculations.
An analysis of the companies’ net profits earned through the latest quarter of 2020 reveals even more pronounced increases in profits. Collectively, these companies earned more than $14.6 billion more in profits in fiscal year 2020 through the latest quarter compared to the same period of fiscal year 2019. Collectively, the companies’ profits increased by 32% over last year’s profits.
Table 2: Top 15 U.S.-based household retail corporations, ranked by profits earned in the fiscal year up to the latest quarter of 2020.*
|Corporation||Net profits so far in fiscal year 2020||Net profits to same date in fiscal year 2019||Difference between 2020 and 2019||% Increase|
|BJ's Wholesale Club||$325,148,000||$145,413,000||$179,735,000||124%|
*See appendix in full PDF version for sources.
All of the household retail corporations offered workers some form of additional pay, which is occasionally called hazard pay, hero pay or appreciation pay. Nine companies, however, halted the additional pay. Ace Hardware, which is structured as a cooperative, delegates the decision to offer pay increases to its individual local co-op members – some of whom reportedly provided $1- or $2-an-hour wage increases for employees, and some of whom did not.
Among the household retail companies that provided additional pay to their employees, Dollar General’s single payment to employees in April made it the earliest company to end the additional pay. Kroger is next, having provided their last additional payments to employees in May. Albertsons, Amazon and Dollar Tree held out until June to make their final additional payments to employees. Big Lots and Walmart made their last additional payments in July. Best Buy ended its extra pandemic pay for employees in August. BJ’s Wholesale Club ended its $2 hourly wage increase in July and paid employees an additional bonus in September. Lowe’s and Target pay periodic bonuses and may pay more. Target’s last bonus was awarded in October and Lowe’s’ last bonus was awarded in November.
Only Costco, Home Depot, Lowe’s and Publix have continued additional payments to workers for the duration of the pandemic. Costco offers that additional pay by adding $2 to workers’ hourly wage. Home Depot provides bonuses of $100 per week for full-time hourly employees and $50 per week for part-time hourly employees. Lowe’s started paying front line hourly workers an additional $2 an hour in April, then switched to awarding periodic bonuses of $300 for full-time workers and $150 for part-time workers, which it has distributed seven times. According to a spokesperson, Publix has implemented unspecified permanent pay raises across its workforce.
Table 3: Pandemic pay policies of 15 top U.S.-based household retail corporations, nine of which no longer provide employees additional pay.*
|Corporation||Workers still receive additional pay||Last additional payment provided||Pandemic pay policy|
|Ace Hardware||Varies||Varies||Decision whether to offer pay increases or sick leave benefits for employees rests with individual local co-op members (i.e. local franchise owners).|
|Albertsons||No||June||Ended its $2-an-hour increase in worker pay on June 13. Provided employees who worked between March 15 and June 13 a “reward” that is “equivalent to $4 per hour for the average hours worked” during this time.|
|Amazon||No||June||Ended its $2-an-hour increase in worker pay at the end of May. Announced a “special one-time Thank You bonus” for employees at the end of June.|
|Best Buy||No||August||Paid unspecified "incremental appreciation pay" between March 22 and August 1, raised starting wage to $15 an hour.|
|Big Lots||No||July||Started paying hourly employees an additional $2 an hour in March and ended the additional pay in early July.|
|BJ's Wholesale Club||No||September||Paid front-line hourly workers an additional $2 an hour starting on March 23 and extended this increase through July 4. Awarded a one-time bonus of $125-$225 to hourly employees who worked between July 3 and Aug. 29. Additionally, BJ’s awarded bonuses ranging between $500 and $3,000 to “managers and key personnel” in March and May.|
|Costco||Yes||Ongoing||Started paying hourly workers an additional $2 an hour in March.|
|Dollar General||No||April||Paid $60 million in “employee appreciation bonuses.” Unknown how much paid per employee. With over 157,000 employees, amount estimated to be approximately $382 per employee.|
|Dollar Tree||No||June||Paid employees an additional $2 an hour between March 8 and June 27. Website says company is “investing $200 million in our hourly-paid store and distribution center Associates with wage premiums in recognition of, and appreciation for, their dedication and efforts to serving our customers.” With over 193,000 employees, benefit amount estimated to be approximately $1,036 per employee.|
|Home Depot||Yes||Ongoing||Provides bonuses of $100-per-week for full-time hourly employees and $50-per-week for part-time hourly employees.|
|Kroger||No||May||Provided employees with a one-time bonus on March 21 and a “Hero Bonus” of an additional $2 an hour from March 29 through May 16.|
|Lowe's||Yes||November||Paid front line hourly workers an additional $2 an hour in April, then switched after April to awarding periodic bonuses of $300 for full-time workers and $150 for part-time workers. Lowe’s has paid these bonuses seven times, most recently on Nov. 13.|
|Publix||Yes||Ongoing||According to a Publix spokesperson, Publix announced permanent pay increases because of the pandemic.|
|Target||Occasionally||October||Accelerated planned 2020 increase of starting wage to $15 an hour and has awarded $200 bonuses to store and distribution workers twice (once in June and again in October).|
|Walmart||No||July||Paid full-time frontline hourly workers a bonus of $300 and part-time workers a bonus of $150 three times since March, most recently in July.|
*See appendix in full PDF version for expanded policy descriptions and sources.
The uncertainty created by the pandemic initially caused many companies to pause plans to buy back their own stocks. Corporations buy back their own stock in order to reduce the number of shares available. Reducing the number of available shares raises the value of the stock – and the value of executives’ stock-based compensation – without the corporations having to improve or invest in their core business. The Coronavirus Aid, Relief, and Economic Security (CARES) Act aid package that Congress passed and President Donald Trump signed in the spring prohibited big corporations that receive government support in the form of loan guarantees from spending on share repurchases. But by the end of the summer, businesses that benefited from, or at least were not devastated by, the pandemic resumed stock buybacks, which totaled $86 billion that quarter. Some companies never stopped buybacks.
Table 4: Stock buyback plans for top U.S.-based household retail corporations.*
|Corporation||Buyback amount authorized||Authorization date||Latest quarter 2020 stock buybacks||Last additional payment to employees|
|Home Depot||$15,000,000,000||February 2019||$0||Ongoing|
|Best Buy||$3,000,000,000||February 2019||$0||August|
|Dollar General||$2,000,000,000||August 2020||$664,600,000||April|
|Dollar Tree||$800,000,000||September 2020||$0||June|
|Big Lots||$500,000,000||August 2020||$0||July|
|BJ's Wholesale Club||$250,000,000||November 2019||$50,000,000||September|
*See appendix in full PDF version for sources.
Thirteen of the 15 top U.S.-based household retail corporations have announced plans in recent years to collectively spend over $65 billion buying back their own stock. In August, September and October of this year, seven of these companies announced new buyback plans or the resumption of previously authorized plans the companies had paused during the pandemic. Among these seven companies, which collectively plan to spend $17.8 billion on stock buybacks, only Lowe’s is offering its employees additional pay.
Six of the companies reported a combined $3.7 billion in stock buybacks in the latest quarter. Albertsons spent $1.76 billion on buybacks; Dollar General spent $665 million; Lowe’s spent $621 million; Walmart spent $500 million; Costco spent $85 million; and BJ’s Wholesale Club spent $50 million. Among these companies, only Costco and Lowe’s are continuing to provide additional pay to their employees. The companies that stopped offering employees extra pay – Albertsons, BJ’s Wholesale Club, Dollar General and Walmart – together spent nearly $3 billion on stock buybacks.
If “we’re all in this together,” as so many have said during the coronavirus pandemic, why are so many businesses holding out on workers? Why are they prioritizing making executives and shareholders richer over providing a living wage for the workers who risk their health and the health of their loved ones in order to carry out the business’ work?
In reality, the pandemic is worsening the systemic inequities – especially economic, racial, and gender inequities – that have long plagued this country. The shameful fact of most of these “essential” household retail corporation’s collective cessation of additional pay for workers, even as they plan or actively engage in stock buybacks, shows that it is the corporations who are “together.” And if they are together “with” anyone besides one another, it is Wall Street they are with more so than their workers.