One of the nation's largest grocers is ordering thousands of office employees to return to their desks three days a week, even if it means they need to relocate to make the newly required commute.
Cincinnati-based Kroger Co. is joining a growing collection of corporate giants across the United States that are ditching pandemic-era policies that allowed some workers to operate remotely in favor of mandates that they show up to a physical workspace for a minimum of three to four days per week.
Kroger's new guidance underscores employers' growing confidence in their ability to enforce stricter rules surrounding in-person requirements. The policy revises previous guidelines implemented in early 2021 that asked employees to be in an office for about two days a week. It then takes that mandate further by warning employees who live far from a corporate hub that they may have to move if they want to keep their jobs.
Kroger framed the change as a necessary step in anticipation of its plans to acquire rival grocer Albertsons for $24.6 billion.
"As we look ahead to our planned merger with Albertsons, we expect in-person collaboration to be a critical foundational element of the future combined company," Kroger wrote in a letter to employees. "As such, associates who are located outside of a reasonable proximity to [any] corporate hub may be eligible and expected to relocate to an approved company facility by June 2025."
The mandate affects about 5,800 of the grocer's corporate employees who would now be expected to work from Kroger offices in Charlotte, North Carolina; Portland, Oregon; San Jose, California; Boca Raton; Florida; and Chicago, Illinois, in addition to the Cincinnati area. Kroger employs upwards of 430,000 people across its more than 2,700-store network.
“We know our teams thrive when we collaborate, come together to achieve our goals and support one another,” Tim Massa, Kroger's senior vice president and chief people officer, said in a statement. “This new guidance further supports that collaboration while maintaining a level of flexibility that allows our associates to best serve our customers and communities."
A Mix of Strategies
Kroger's escalated mandate is the latest in a slew of similar policies implemented by companies pushing to enforce stricter in-office schedules. Disney, Amazon, Apple, Meta, Alphabet's Google and others have ramped up efforts to get workers back to physical office space, deploying a mix of strategies that include attendance-tracking apps and threats to link in-person time with annual performance reviews.
By and large, most return-to-office mandates have avoided demands for employees to relocate to be closer to physical offices. A tight labor market, ongoing pandemic concerns and an aversion by some people to working in an office led many employers to offer some flexibility for people who don't live near a company outpost, especially if those employees were hired in the early years of the pandemic on a remote-only basis.
However, those tables appear to be turning as the job market cools, providing companies with more leverage to implement firmer in-office policies and make better use of their real estate.
The escalated in-office mandates have yet to significantly move the needle on occupancy rates nationally, but there are some early signs that could soon change. Office use remains stubbornly below pre-pandemic levels in major metropolitan areas around the country, according to data tracked by Kastle Systems, but average attendance for the week ended Dec. 6 surpassed 51.6%, an all-time high since March 2020.
That's welcome news for the office industry, which has for years been plagued by record amounts of sublet availability and tenants' disinterest in signing for additional space.
Softened demand has pushed the national office vacancy rate beyond 13.5% nationally, according to a CoStar analysis. Tenants now have collectively dumped nearly 175 million square feet of office space on the market since the beginning of 2020, according to the data, much of which has been concentrated in major office markets such as San Francisco, Los Angeles and New York.