By Todd Welch / Herald Columnist
Kroger’s decision to close its Fred Meyer store on Everett’s Evergreen Way has stirred anger among workers, city leaders, and shoppers.
On the surface, company executives point to “rising theft” and a “challenging regulatory environment.” But the reality is more complicated. While Everett has worked to create a business-friendly climate, a combination of state laws, local initiatives and regulatory uncertainty piled up until one of the area’s major retailers could no longer make the math work.
A law that raises grocery prices: The Washington Recycling Reform Act (Senate Bill 5284 – Improving Washington’s solid waste management outcomes) was adopted this year with sustainability in mind, but its hidden costs are already weighing on grocers. By shifting recycling and packaging fees onto producers, the law virtually ensures higher grocery prices as companies pass costs down the line. Families already stretched thin will feel it most, and smaller stores face steep compliance burdens. What was meant to be an environmental fix now risks functioning as an added tax on the dinner table.
Minimum wage pressure: Everett’s voter-approved Citizen Initiative 24-01 raised the local minimum wage for large employers to $20.24 an hour this summer; one of the highest rates in the nation. For a store employing hundreds, payroll costs skyrocketed. Grocery chains operate on razor-thin margins, and every extra dollar in wages erodes profitability.
Higher business taxes: The 2025 state tax package increased business and occupation (B&O) tax rates and expanded them to more services. While groceries themselves are exempt from sales tax, costs for security, logistics, IT and marketing all climbed. Fred Meyer also sells general merchandise, which is taxed. Add surcharges on large companies, and the tax burden becomes heavy for retailers already battling rising costs.
Rules targeting self-checkout: Proposed legislation from state Rep. Mary Fosse, D-Everett, would have required one worker for every two self-checkout stations and mandated that manual lanes stay open whenever self-checkouts were running. Though the bill didn’t passed, companies such as Kroger plan years ahead, and the prospect of higher labor mandates adds to the uncertainty.
Merger blocked, efficiencies lost: Then-Attorney General Bob Ferguson’s lawsuit blocking the Kroger-Albertsons merger eliminated potential cost savings from shared distribution networks. Without those efficiencies, Kroger has less flexibility to absorb rising wages, taxes, and compliance costs.
The theft issue: Kroger highlighted theft as a major factor, but Everett Police data show shoplifting incidents at this store have fallen sharply since 2020. Theft is real and costly, but it wasn’t the only story. In 2021, the Legislature raised the felony theft threshold to $750, meaning many offenders’ cycles through the courts with misdemeanor charges. The decrease in shoplifting also seems to coincide with the passage of the higher limits on a felony count; could there be an under-reporting of misdemeanor crime since most will not see true justice? Both a local Starbucks and the nearby Walmart shut down in recent years, with crime reported as the main reason. And let’s be honest; stores like that don’t just close their doors unless something big is going on. Everett police may make arrests, but repeat theft remains a revolving-door problem.
The bigger picture: Layered together — higher wages, new taxes, regulatory proposals, blocked merger savings, and the ongoing cost of theft prevention — Kroger’s decision becomes easier to understand. For a corporate office looking at spreadsheets, south Everett’s Fred Meyer was an underperformer in a high-cost environment.
A policy challenge: The closure is a blow to south Everett. Beyond the lost jobs, residents lose access to an anchor grocery store in a working-class neighborhood.
And yet, elected officials at both the local and state levels are unlikely to reflect on the cumulative impact of their own policies that helped drive this outcome. Instead of asking how these layers of cost and regulation stacked up to make one store unsustainable, it is easier to focus on corporate greed or theft statistics.
If lawmakers want to keep essential retailers open, they’ll need to balance sustainability and worker protections with policies that don’t tip stores into closure. That could mean targeted tax relief, stronger support for theft prevention and labor rules that give grocers room to stay viable.
The Fred Meyer closure isn’t just about one store. It’s a warning sign that when costs pile too high, even a national chain can walk away, leaving a community with fewer jobs and fewer places to shop.
Todd Welch is a columnist for The Herald, addressing local and state issues. He lives in Everett.
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