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Why Kroger is closing 60 stores: 'One hit after another'

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Why Kroger is closing 60 stores: 'One hit after another'

After a series of setbacks, Kroger’s recent decision to close 60 locations nationwide is the latest sign of distress for the grocer that operates more than 300 stores in California.

Kroger, the parent company of Ralphs and Food 4 Less, is reducing its footprint after the resignation of its chief executive and a failed merger with competing grocery giant Albertsons. The company faces a lawsuit related to the merger and also has been struggling with labor unrest.

Employees had been threatening to strike until the company reached a tentative agreement with the United Food and Commercial Workers union this week.

Based in Cincinnati, Kroger also owns Harris Teeter, King Soopers and Dillons. The company operates more than 2,700 stores under different brands across the country and offers fresh goods, some household items and pharmacy services.

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“Instead of popping champagne and toasting to their merger, Kroger is instead just enduring one hit after another,” said Jeff Wells, lead editor at the trade publication Grocery Dive. “They’re still a pretty stable business, but they’re facing a lot in terms of challenges.”

Impending closures

Kroger announced late last month in its quarterly earnings report that it plans to close 60 stores over the next 18 months. The company did not disclose which locations would be shut down.

“We’re simplifying our business and reviewing areas that will not be meaningful to our future growth,” interim Chief Executive Ronald Sargent said in an earnings call. “Today, not all of our stores are delivering the sustainable results we need.”

Kroger temporarily paused routine store closures while the Albertsons merger was pending, Sargent said. The company normally closes about 30 stores per year, Melius Research analyst Jacob Aiken-Phillips said.

The company is on track to complete 30 major store projects this year and expects to accelerate store openings in 2026, Sargent said on the earnings call.

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Competitive market

Kroger is under increasing pressure from competitors, experts said, some of which offer a wider range of items and convenient one-stop shops.

“Kroger faces this intensely competitive field in the grocery industry,” Wells said. “From Walmart to Costco to Whole Foods and Sprouts Farmers Market, everybody in the industry is kind of gunning for them.”

The Albertsons merger would have given Kroger the scale to compete with giants such as Walmart and Amazon, Aiken-Phillips said.

“After the merger failed, they had to reexamine their strategy and focus on how they can grow and compete without that scale,” he said. “That’s the major challenge right now.”

Kroger relies on pharmacy services, advertising and e-commerce for additional revenue, experts said. Although the company grew its e-commerce business 15% in the first quarter of this year, the business remains unprofitable.

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A chief executive shuffle

Former Kroger CEO Rodney McMullen stepped down in March after an investigation into his personal conduct, the company announced. Sargent was appointed chairman of the board of directors and interim CEO.

Kroger did not share details of the investigation into McMullen. His “personal conduct, while unrelated to the business, was inconsistent with Kroger’s Policy on Business Ethics,” the company’s statement said.

“When he resigned, it threw a wrench in progressing the company because now you need a new leader to come in,” Aiken-Phillips said.

A failed merger

In 2022, Kroger agreed to buy Albertsons for $24.6 billion, a sale that would have been the largest supermarket merger in U.S. history.

The Federal Trade Commission, California and several other states sued to stop the merger, arguing that it would hobble competition in many parts of the country, leaving customers at the mercy of a newly formed behemoth and driving up prices. Kroger and Albertsons collectively own about 5,000 grocery stores.

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In late 2024, Albertsons scrapped the deal after a federal judge in Oregon issued a preliminary injunction in the case. The high-stakes court battle centered on concerns that the megamerger would add to the financial woes of consumers who have grappled with the rising cost of food.

Albertsons also sued Kroger, claiming that the grocer didn’t do enough to win over regulators. Kroger has since countersued.

Ongoing labor unrest

In June, grocery workers at Albertsons and Kroger — numbering about 45,000 — voted to authorize a strike to protest what they called unfair labor practices. A walkout would have caused a major disruption for two of the nation’s largest grocery chains during the busiest season of the year.

The United Food and Commercial Workers union announced Thursday that it reached a tentative agreement with the two companies that would allow them to avoid a strike. The union will vote on whether to approve the agreement July 9-11.

“Following an intense 40 plus hour bargaining session that began on Friday morning, we’ve secured an agreement that addresses our priorities,” the union said in a statement.

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The agreement includes higher wages, improved pension plans as well as health and welfare improvements, the union said. Kroger did not respond to requests for comment.

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Senate committee kills bill mandating insurance coverage for wildfire safe homes

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Senate committee kills bill mandating insurance coverage for wildfire safe homes

A bill that would have required insurers to offer coverage to homeowners who take steps to reduce wildfire risk on their property died in the Legislature.

The Senate Insurance Committee on Monday voted down the measure, SB 1076, one of the most ambitious bills spurred by the devastating January 2025 wildfires.

The vote came despite fire victims and others rallying at the state Capitol in support of the measure, authored by state Sen. Sasha Renée Pérez (D-Pasadena), whose district includes the Eaton fire zone.

The Insurance Coverage for Fire-Safe Homes Act originally would have required insurers to offer and renew coverage for any home that meets wildfire-safety standards adopted by the insurance commissioner starting Jan. 1, 2028.

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It also threatened insurers with a five-year ban from the sale of home or auto insurance if they did not comply, though it allowed for exceptions.

However, faced with strong opposition from the insurance industry, Pérez had agreed to amend the bill so it would have established community-wide pilot projects across the state to better understand the most effective way to limit property and insurance losses from wildfires.

Insurers would have had to offer four years of coverage to homeowners in successful pilot projects.

Denni Ritter, a vice president of the American Property Casualty Insurance Assn., told the committee that her trade group opposed the bill.

“While we appreciate the intent behind those conversations, those concepts do not remove our opposition, because they retain the same core flaw — substituting underwriting judgment and solvency safeguards with a statutory mandate to accept risk,” she said.

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In voting against the bill Sen. Laura Richardson, (D-San Pedro), said: “Last I heard, in the United States, we don’t require any company to do anything. That’s the difference between capitalism and communism, frankly.”

The remarks against the measure prompted committee Chair Sen. Steve Padilla, (D-Chula Vista), to chastise committee members in opposition.

“I’m a little perturbed, and I’m a little disappointed, because you have someone who is trying to work with industry, who is trying to get facts and data,” he said.

Monday’s vote was the fourth time a bill that would have required insurers to offer coverage to so-called “fire hardened” homes failed in the Legislature since 2020, according to an analysis by insurance committee staff.

Fire hardening includes measures such as cutting back brush, installing fire resistant roofs and closing eaves to resist fire embers.

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Pérez’s legislation was thought to have a better chance of passage because it followed the most catastrophic wildfires in U.S. history, which damaged or destroyed more than 18,000 structures and killed 31 people.

The bill was co-sponsored by the Los Angeles advocacy group Consumer Watchdog and Every Fire Survivor’s Network, a community group founded in Altadena after the fires formerly called the Eaton Fire Survivors Network.

But it also had broad support from groups such as the California Apartment Association, the California Nurses Association and California Environmental Voters.

Leading up to the fires, many insurers, citing heightened fire risk, had dropped policyholders in fire-prone neighorhoods. That forced them onto the California FAIR Plan, the state’s insurer of last resort, which offers limited but costly policies.

A Times analysis found that that in the Palisades and Eaton fire zones, the FAIR Plan’s rolls from 2020 to 2024 nearly doubled from 14,272 to 28,440. Mandating coverage has been seen as a way of reducing FAIR Plan enrollment.

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“I’m disappointed this bill died in committee. Fire survivors deserved better,” Pérez said in a statement .

Also failing Monday in the committee was SB 982, a bill authored by Sen. Scott Wiener, (D-San Francisco). It would have authorized California’s attorney general to sue fossil fuel companies to recover losses from climate-induced disasters. It was opposed by the oil and gas industry.

Passing the committee were two other Pérez bills. SB 877 requires insurers to provide more transparency in the claims process. SB 878 imposes a penalty on insurers who don’t make claims payments on time.

Another bill, SB 1301, authored by insurance commissioner candidate Sen. Ben Allen, (D-Pacific Palisades), also passed. It protects policyholders from unexplained and abrupt policy non-renewals.

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How We Cover the White House Correspondents’ Dinner

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How We Cover the White House Correspondents’ Dinner

Times Insider explains who we are and what we do, and delivers behind-the-scenes insights into how our journalism comes together.

Politicians in Washington and the reporters who cover them have an often adversarial relationship.

But on the last Saturday in April, they gather for an irreverent celebration of press freedom and the First Amendment at the Washington Hilton Hotel: The White House Correspondents’ Association dinner.

Hosted by the association, an organization that helps ensure access for media outlets covering the presidency, the dinner attracts Hollywood stars; politicians from both parties; and representatives of more than 100 networks, newspapers, magazines and wire services.

While The Times will have two reporters in the ballroom covering the event, the company no longer buys seats at the party, said Richard W. Stevenson, the Washington bureau chief. The decision goes back almost two decades; the last dinner The Times attended as an organization was in 2007.

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“We made a judgment back then that the event had become too celebrity-focused and was undercutting our need to demonstrate to readers that we always seek to maintain a proper distance from the people we cover, many of whom attend as guests,” he said.

It’s a decision, he added, that “we have stuck by through both Republican and Democratic administrations, although we support the work of the White House Correspondents’ Association.”

Susan Wessling, The Times’s Standards editor, said the policy is a product of the organization’s desire to maintain editorial independence.

“We don’t want to leave readers with any questions about our independence and credibility by seeming to be overly friendly with people whose words and actions we need to report on,” she said.

The celebrity mentalist Oz Pearlman is headlining the evening, in lieu of the usual comedy set by the likes of Stephen Colbert and Hasan Minhaj, but all eyes will be on President Trump, who will make his first appearance at the dinner as president.

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Mr. Trump has boycotted the event since 2011, when he was the butt of punchlines delivered by President Barack Obama and the talk show host Seth Meyers mocking his hair, his reality TV show and his preoccupation with the “birther” movement.

Last month, though, Mr. Trump, who has a contentious relationship with the media, announced his intention to attend this year’s dinner, where he will speak to a room full of the same reporters he often derides as “enemies of the people.”

Times reporters will be there to document the highs, the lows and the reactions in the room. A reporter for the Styles desk has also been assigned to cover the robust roster of after-parties around Washington.

Some off-duty reporters from The Times will also be present at this late-night circuit, though everyone remains cognizant of their roles, said Patrick Healy, The Times’s assistant managing editor for Standards and Trust.

“If they’re reporting, there’s a notebook or recorder out as usual,” he said. “If they’re not, they’re pros who know they’re always identifiable as Times journalists.”

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For most of The Times’s reporters and editors, though, the evening will be experienced from home.

“The rest of us will be able to follow the coverage,” Mr. Stevenson said, “without having to don our tuxes or gowns.”

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MrBeast company sued over claims of sexual harassment, firing a new mom

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MrBeast company sued over claims of sexual harassment, firing a new mom

A former female staffer who worked for Beast Industries, the media venture behind the popular YouTube channel MrBeast, is suing the company, alleging she was sexually harassed and fired shortly after she returned from maternity leave.

The employee, Lorrayne Mavromatis, a Brazilian-born social media professional, alleges in a lawsuit she was subjected to sexual harassment by the company’s management and demoted after she complained about her treatment. She said she was urged to join a conference call while in labor and expected to work during her maternity leave in violation of the Family and Medical Leave Act, according to the federal complaint filed Wednesday in the U.S. District Court for the Eastern District of North Carolina.

“This clout-chasing complaint is built on deliberate misrepresentations and categorically false statements, and we have the receipts to prove it. There is extensive evidence — including Slack and WhatsApp messages, company documents, and witness testimony — that unequivocally refutes her claims. We will not submit to opportunistic lawyers looking to manufacture a payday from us,” Gaude Paez, a Beast Industries spokesperson, said in a statement.

Jimmy Donaldson, 27, began MrBeast as a teen gaming channel that soon exploded into a media company worth an estimated $5 billion, with 500 employees and 450 million subscribers who watch its games, stunts and giveaways.

Mavromatis, who was hired in 2022 as its head of Instagram, described a pervasive climate of discrimination and harassment, according to the lawsuit.

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In her complaint, she alleges the company’s former CEO James Warren made her meet him at his home for one-on-one meetings while he commented on her looks and dismissed her complaints about a male client’s unwanted advances, telling her “she should be honored that the client was hitting on her.”

When Mavromatis asked Warren why MrBeast, Donaldson, would not work with her, she was told that “she is a beautiful woman and her appearance had a certain sexual effect on Jimmy,” and, “Let’s just say that when you’re around and he goes to the restroom, he’s not actually using the restroom.”

Paez refuted the claim.

“That’s ridiculous. This is an allegation fabricated for the sole purpose of sparking headlines,” Paez said.

Mavromatis said she endured a slate of other indignities such as being told by Donaldson that she “would only participate in her video shoot if she brought him a beer.”

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“In this male-centric workplace, Plaintiff, one of the few women in a high-level role, was excluded from otherwise all-male meetings, demeaned in front of colleagues, harassed, and suffered from males be given preferential treatment in employment decisions,” states the complaint.

When Mavromatis raised a question during a staff meeting with her team, she said a male colleague told her to “shut up” or “stop talking.”

At MrBeast headquarters in Greenville, N.C., she said male executives mocked female contestants participating in BeastGames, “who complained they did not have access to feminine hygiene products and clean underwear while participating in the show.”

In November 2023, Mavromatis formally complained about “the sexually inappropriate encounters and harassment, and demeaning and hostile work environment she and other female employees had been living and experiencing working at MrBeast,” to the company’s then head of human resources, Sue Parisher, who is also Donaldson’s mother, according to the suit.

In her complaint, Mavromatis said Beast Industries did not have a method or process for employees to report such issues either anonymously or to a third party, rather employees were expected to follow the company’s handbook, “How to Succeed In MrBeast Production.”

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In it, employees were instructed that, “It’s okay for the boys to be childish,” “if talent wants to draw a dick on the white board in the video or do something stupid, let them” and “No does not mean no,” according to the complaint.

Mavromatis alleges that she was demoted and then fired.

Paez said that Mavromatis’s role was eliminated as part of a reorganization of an underperforming group within Beast Industries and that she was made aware of this.

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