A company managing a distribution warehouse serving Kroger stores in the Dallas area has informed state authorities that it would lay off nearly 700 workers next month as Kroger transitions to a different third-party manager.
South Star LLC told the Texas Employment Commission that 690 of the workers at the Tarrant County warehouse would be laid off Dec. 10. A Kroger spokeswoman told Winsight Grocery Business Tuesday that the facility would not be closing but transitioning to a different manager, Penske Logistics, which is expected to recruit staff from existing and outside sources.
Most of South Star’s workers are represented by local chapters of the Teamsters and United Food and Commercial Workers unions, according to the Dallas Morning News, which first reported on the transition Monday. The warehouse serves 93 Kroger stores in North Texas.
The change comes as Kroger, based in Cincinnati, is reportedly taking a tighter look at expenses associated with supply and distribution. A Wall Street Journal story earlier this week said the company is fining suppliers $500 for every order that is more than two days late to any of its 42 warehouses.