THE FRIDAY 5: Judge Delays Kroger-Albertsons Merger; Listeria Outbreak Turns Fatal

1. Kroger-Albertsons Merger On Hold as Grocers Make Other Moves

The Kroger-Albertsons merger was back in the news this week as Denver District Court Judge Andrew J. Luxen temporarily halted the proposed $24.6 billion merger between the two grocers. During a hearing on July 25, Luxen granted a preliminary injunction delaying the merger while also canceling an Aug. 12 hearing on the matter. Both grocers have agreed to the delay.

In place of the hearing will be a two-week trial set to start on Sept. 30, based on the lawsuit filed in Denver District Court in February by Colorado Attorney General Phil Weiser that aims to block the merger. According to the lawsuit, the merger would eliminate head-to-head competition between Kroger and Albertsons and consolidate an already concentrated market. 

A Kroger spokesperson told Progressive Grocer that the latest decision is welcome news since it eliminates the need for a preliminary injunction hearing. “We look forward to defending in court how the combination of Kroger and Albertsons will provide meaningful, measurable benefits, including lower prices and more choices for families across the country and more opportunities for stable, well-paying union jobs,” said the spokesperson.

In non-merger news this week, and despite posting a lower-than-expected first-quarter profit, Albertsons Cos. saw some positive results thanks to its Our Customers for Life strategy. CEO Vivek Sankaran credited the strategy for a couple of highlights in the retailer’s first quarter, which ended June 15, including an increase in loyalty members by 15% to 41.4 million and a digital sales boost of 23%.

Finally, readers were also interested in the addition of new technology from Ocado Group to Kroger’s customer fulfillment centers. The grocer will implement a wide range of new automated technologies at CFCs in its existing network, as well as those still in the pipeline, bringing new levels of efficiency and labor productivity to Kroger’s grocery delivery network by driving down its cost to serve from CFCs and enhancing its customer proposition. 

2. Lowes Foods' Parent Company Adjusts Store Portfolio

News this week of the closure of two Lowes Foods locations and a Kj’s Market in the Carolinas by parent company Alex Lee caught readers’ attention. The closings are part of Alex Lee’s broader growth strategy to invest in new stores and remodel existing stores. 

Lowes Foods opened a new store in Aiken, S.C., this week, and the banner also has several other store openings pending: Concord, Kannapolis and Waxhaw, N.C., and Indian Land and Lexington, S.C. Plus, the grocer is making moves outside of the Carolinas as it readies its first store in Georgia, at Marble Hill.

3. Deli Meats Likely Culprit Behind Multi-State Listeria Outbreak

The Centers for Disease Control reported a multistate Listeria outbreak linked to eating meats sliced at deli counters. Investigators are currently collecting information to determine the specific products that may be contaminated, and the CDC is warning consumers that products sold at the deli, especially those sliced or prepared at the deli, may be contaminated with Listeria. 

As of July 25, 34 sick people have been identified in 13 states, including 33 hospitalizations and two deaths. The investigation is ongoing, and FSIS continues to work with the CDC and state partners. On July 26, Boar’s Head issued a recall of its deli meat over Listeria concerns. 

4. The Store of the Future, Plus Walmart’s Version of Future-Forward Shopping

PG’s all-encompassing Store of the Future report gained reader attention this week, covering four disruptive imperatives – workforce, sustainability, customer experience and omnichannel – each of which should be carefully considered when making investment decisions and forward-looking plans. Visionaries from Tosca, Placer.ai, Givex and Axonify shared their insights within the report, and also during this week’s symposium on the topic.

Speaking of forward-looking shopping, Walmart’s latest update on its adaptive retail strategy also made waves this week. The grocer’s new concept is considered an evolved form of retail that brings shopping to the customer in exactly the way they want and need. The company is now offering a glimpse into how its strategy is paying off with its inaugural "State of Adaptive Retail" report, having surveyed more than 2,200 U.S. shoppers to gauge their current and future expectations of adaptive retail. 

According to the retailer, the study uncovered several overarching themes, including the fact that “retailers that can proactively predict individual customer needs, offer personalized suggestions and deliver at exactly the right moment are the ones who will succeed.”

5. Inside Lipton Teas' Transformation

PG Senior Editor Lynn Petrak recently sat down with Lipton CEO Nathalie Roos and North American President Racquel Harris Mason, both of whom spoke at the recent Consumer Goods Forum Global Summit in Chicago. Now known as Lipton Teas and Infusions, the Amsterdam, Netherlands-headquartered business is privately owned by CVC Capital Partners, which purchased the global operation from Unilever in 2021, and includes the Lipton, Pukka, T2, PG Tips and Tazo brands, in addition to some local brands. 

“I came for this mission to transform the industry and really create value for all, improving the experience and to have more consumers buying more tea at a higher quality,” said Roos of her role at the helm of the legacy company. “From this value we create at the end consumer side, it is also really creating value for everyone in the supply chain and particularly for retailers.”

For Roos, Mason and their teams at the Lipton Teas and Infusions, tapping opportunities involves the contemporary facets of value, including taste, variety, convenience, affordability, health and sustainability. The company is also working hard to bolster a younger base with a portfolio that includes hot and cold teas, black, and green teas, specialty teas, mixes and more.

“To me, what I’m most excited about is the potential to recruit a whole new generation of users that we can bring wonderful physical and mental health benefits to. Tea has been around for more than 2,000 years but Gen Z needs and wants tea,” said Mason, who was named president in 2023. “Our mission is to reset tea in the minds of people, especially Gen Z, because they are a beacon for the rest of the world.”