THE FRIDAY 5: What’s Next for the Kroger-Albertsons Merger?

Nationwide industry growth, Hy-Vee’s evolution also made news
Emily Crowe, Progressive Grocer
Kroger Albertsons Merger
A Kroger spokesperson said the FTC’s decision to sue over its proposed merger with Albertsons Cos. will mean higher food prices for American consumers.

Welcome to The Friday 5, Progressive Grocer’s weekly roundup of the top news and trends in the food retail industry. Each Friday, we’ll take a look at the stories that are most important to our readers and also keep tabs on the trends that are poised to impact grocers. 

1. What’s Next for the Kroger-Albertsons Merger Following FTC Lawsuit?

After much speculation that it would do so, the FTC and nine state attorneys sued to stop the proposed merger between The Kroger Co. and Albertsons Cos. According to the FTC, the $24.6 billion merger and divestiture proposal with C&S Wholesale Grocers "falls far short of mitigating the lost competition between Kroger and Albertsons."

“If the Federal Trade Commission is successful in blocking this merger, it would be hurting customers and helping strengthen larger, multi-channel retailers such as Amazon, Walmart and Costco – the very companies the FTC claims to be reining in – by allowing them to continue increasing their growing dominance of the grocery industry,” said an Albertsons Cos. spokesperson.

Added a Kroger spokesperson: “The FTC’s decision makes it more likely that America’s consumers will see higher food prices and fewer grocery stores at a time when communities across the country are already facing high inflation and food deserts. In fact, this decision only strengthens larger, non-unionized retailers like Walmart, Costco and Amazon by allowing them to further increase their overwhelming and growing dominance of the grocery industry.”

While details on what happens next are scarce, the FTC claims that the issuance of this administrative complaint marks the beginning of a proceeding in which the allegations will be tried in a formal hearing before an administrative law judge.

Albertsons says the company “is disappointed that the FTC continues to use the same outdated view of the U.S. grocery industry it used 20 years ago, and we look forward to presenting our arguments in Court.”

2. Cross-Country Grocery Growth

News of grocers large and small opening new stores across the U.S. struck a chord with PG’s readers. Regional player Fareway Stores Inc. and the city of Basehor, Kan., have revealed that they will soon submit an application for the development of an approximately 21,000-square-foot full-service Fareway Meat & Grocery store in Basehor. If approved, this will be the first Fareway Meat & Grocery Store in the state of Kansas. 

Sprouts Farmers Market, meanwhile, revealed that it anticipates opening approximately 35 new stores this year. Readers were also rapt by news that Dollar General opened its 20,000th store at its DG Market location in Alice, Texas, on Feb. 24. This latest company achievement comes on the heels of the announcement last month that more than 5,000 Dollar General stores offer produce, providing more individual points of produce distribution than any other U.S. mass retailer or grocer. 

Hy-Vee_Jeremy Gosch Main Image
Jeremy Gosch, CEO of Hy-Vee, spoke exclusively with PG about the grocer's next moves.

3. Behind Hy-Vee’s Next Evolution

PG Editor-in-Chief Gina Acosta had the exclusive opportunity to sit down with executives from Iowa-based grocery chain Hy-Vee, which in January 2023 announced that Jeremy Gosch would become CEO of the company, taking the reins from iconic leader Randy Edeker, who led the company more than 10 years and remains executive chairman of the board of directors until July 31. 

Edeker told Acosta that he started thinking about his replacement several years ago, and that Gosch had the foresight to look at the business differently than others he was considering for the position. “He spoke about it more globally,” Edeker said. “He really looked at the business in a larger picture, beyond just his store.” For his part, Gosch shared that Hy-Vee is moving slowly with growth plans due to inflation, construction costs and inventory-carrying costs, but the grocer is looking to have a presence in Tennessee, Indiana and Kentucky, and will get moving on those plans this summer. 

4. A New Worker Contract at Meijer

Meijer has a new deal with some of its workers, after members of the United Food and Commercial Workers (UFCW) Local 951 voted to ratify new contracts with improved wages and benefits. Most of the private sector union’s members are Meijer workers, and the deal spans three different contacts across the retail, distribution center, transportation and facilities maintenance sectors. 

The agreements come several days after the repeal of Michigan’s right-to-work law that allowed workers to opt out of paying union dues. The new contract also calls for all new employees to join the union or pay a service fee as a condition of their employment. Meijer has not publicly commented on the labor negotiations or contracts.

5. Independents Still Take the Cake

PG announced its Outstanding Independents of 2024 to much fanfare last week, and the clicks keep coming. One key point in common among this class of winners is their deep connection to the neighborhoods where their stores are located and where, very often, they live as well. This is the main differentiator of independent grocers: Their ability to anticipate the needs of area shoppers and create a long-lasting bond in a way that larger players can only envy.

Read on to see the full list of winners and find out more about PG’s 2024 Outstanding Independents.

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