THE FRIDAY 5: Kroger's Courtroom Drama; Publix Pushes North

1. Kroger, Albertsons Go to Court

Unsurprisingly, coverage of court proceedings in the FTC’s case against the proposed merger between The Kroger Co. and Albertsons Cos. topped the PG charts this week. 

Opening statements were heard Aug. 26, with U.S. District Judge Adrienne Nelson of Oregon overseeing the FTC’s request for preliminary injunction against the merger, which, if granted, would put the merger on hold while the FTC undertakes an administrative hearing against the deal. In her opening remarks, FTC Chief Trial Counsel Susan Musser focused on the idea that the merger would reduce business competition “that acts as a check on rising grocery prices and spurs improvements in quality and innovation.”

Matthew Wolf, legal counsel for Kroger, contended in his opening statement that price reductions would happen immediately on the items that American families need most if the merger is approved. Additionally, he shared that collective bargaining agreements with local unions will be transferred and maintained.

According to Enu Mainigi, counsel for Albertsons, the decision to merge with Kroger was not made lightly, but offered the best opportunity for the company to ensure long-term competitiveness. In addressing a future where the merger does not go through, she said layoffs, store closures, or even exiting certain markets could occur.

“These are the kind of things that are on the table if the measure does not go through and we recognize, as a company, the disruption that happens at the community level and the impact on our customers, our employees, their families, and the broader community with these kinds of changes,” Mainigi explained. “And we hope we don't have to get there.”

Later in the week, the two grocers shared that if the injunction is granted to pause the merger, it will likely end the merger outright. This presents a real issue for Albertsons, which is having difficulty competing against the “Goliaths” of food retailing, i.e. Walmart, Costco, Target and Amazon. 

The hearing is expected to last three weeks.

Meanwhile, workers at Fred Meyer stores in the Portland area who are members of UFCW 555 went on strike on Aug. 28 following seven days of talks.

“A ULP strike is crucial to force Fred Meyer to comply with their obligations as an employer to their employees. Our members are united in demanding fair treatment, which can only be reached if Fred Meyer actually stands behind its public statements and is willing to fulfill all their obligations and legal requirements. Our membership came out in overwhelming support of this action and the community has our back,” declared Dan Clay, president, UFCW Local 555.

2. Publix Moves North

Readers were also interested in the news that Florida-based Publix Super Markets announced plans for yet another new store in Kentucky – this one in Owensboro, about 100 miles southwest of Louisville and the fourth largest city in the state. The Owensboro site is Publix’s 11th planned location in Kentucky, as the retailer continues to push north beyond its traditional service area. 

No opening date has been announced yet. Later this year, Publix is set to unveil two more stores in Louisville and another in Lexington, and is in various planning and construction phases of its outposts in the Bluegrass State. Meanwhile, crews are putting the finishing touches on a 54,964-square-foot Publix in Gainesville, Ga., that will welcome shoppers on Sept. 12.

3. Stop & Shop Will No Longer Sell Cigarettes, Tobacco

As part of its commitment to community wellness, Stop & Shop has announced it will stop selling all cigarettes and tobacco products at its 360 stores. The grocery retailer, with stores across Massachusetts, Rhode Island, Connecticut, New York, and New Jersey, plans to end sales of all tobacco products at all stores by Aug. 31.

“Our responsibility as a grocer goes far beyond our aisles, and we are committed to taking bold steps to help our associates, customers, and communities work towards better health outcomes,” said Gordon Reid, president at Stop & Shop. “From our team of registered dietitians that serve our customers at no cost to our trained and trusted pharmacy associates, Stop & Shop aims to support the health and well-being of the neighborhoods we serve – and this exit from tobacco is one more way we’re accomplishing that goal.”

4. CPG Divestitures, C-Suite Moves

Moves in the consumer packaged goods space made waves this week, first with Campbell Soup Company selling off its Pop Secret popcorn business to Our Home, a better-for-you snack company. 

Privately owned Our Home includes such brands as Popchips, Should Taste Good and Real Food From The Ground Up within its portfolio, and Pop Secret marks the company’s entry into the microwave popcorn category. Our Home is on a growth spurt, picking up the Sonoma Creamery cheese snack brand in May. It also acquired the RW Garcia and Good Health brands and several manufacturing facilities from Utz Brands earlier this year. 

Also making news this week was Milo's Tea Co., Inc., which appointed Emily Backstrom to the role of CFO. As a member of the executive team, she will lead financial strategy for the family-owned tea and lemonade business as it continues to expand by scaling its operations and focusing on innovation.  A CPG industry veteran, Backstrom joins Milo’s from General Mills, where she most recently served as VP of corporate finance.

5. Sprouts Coming to 10 More Communities

In addition to the dozen new store openings announced last week, Sprouts Farmers Market informed PG this week of 10 more grand openings it has planned in the coming months. The accelerated growth is part of the company's goal of opening 35 new locations during its fiscal year 2024. 

“Given our business momentum, we are eager to expand into more communities,” said CEO Jack Sinclair during a July 29 earnings webcast. Click here for that additional list of communities.