Lowe’s is spending a total of $55 million on bonuses for hourly store associates to help them offset the sting of inflation, which has remained near 40-year highs for much of summer.
“In recognition of some of the cost pressures they are facing due to high inflation, we are providing an incremental $55 million in bonuses to our hourly front-line associates this quarter,” CEO Marvin Ellison said on the home improvement retailer’s second quarter call. “These associates have the most important jobs in our company, and we deeply appreciate everything they do to serve our customers to deliver a best-in-class experience.”
Joe McFarland, EVP, stores, said that, in addition to the bonus, Lowe’s is granting associates an additional 10 percent discount on everyday household and cleaning items for a limited time to offset inflation pressures. Mr. McFarland added, “Associates can now purchase these products at a 20 percent discount, which we hope will ease the burden of inflation impacting many of these items. We will continue to look for meaningful ways to improve our associates’ work-life balance, while providing them with the tools to build a career at Lowe’s.”
Lowe’s employs approximately 300,000 associates.
Among other retailers, Stew Leonard’s on August 15 announced its 2,500 full- and part-time associates will each receive a gift card to purchase food products at the grocer to offset inflation. A few other firms in other sectors and some municipalities are also handing out inflation-related bonuses.
Retailers have been raising wages and enhancing benefits packages to improve recruiting in a tight labor market and as minimum wage rates increase in many markets. Some have paid employees pandemic-related hazard pay bonuses, as well.
Continual pay hikes can create a self-perpetuating cycle of runaway inflation in a feared “wage-price spiral,” but wage increases overall have not kept pace with inflation.
Over the past 12 months through July, average hourly earnings in the U.S. have increased by 5.2 percent to reach an average at private employers of $32.27. Inflation in July was up 8.5 percent from a year ago.
- Lowe’s (LOW) Q2 2022 Earnings Call Transcript – The Motley Fool
- Lowe’s becomes latest employer to give workers inflation bonuses – The Washington Post
- Employment Situation Summary – U.S. Bureau of Labor Statistics
- With inflation running at a 40-year high, 36% of U.S. adults tapped their savings to cover living expenses: Survey – CNBC
- Consumer prices rose 8.5% in July, less than expected as inflation pressures ease a bit – CNBC
- Norwalk-based Stew Leonard’s announces employee bonus plan to offset rising inflation on grocery costs – Newstimes
- Employers Weigh Inflation’s Impact on Annual Pay Raises, SHRM Survey Shows – SHRM
- Inflation Cooled in July, Welcome News for White House and Fed – The New York Times