KROGER IN COURT: Grocer Plans to Rest Its Case in Seattle
The Kroger Co. plans to rest its case on Oct. 8 after its final witness is called in a trial in Washington state that aims to stop the retailer's proposed $24.6 billion merger with Albertsons Cos. The state will then have a chance to call its rebuttal witness. Both parties will then have 10 business days to submit final briefings before closing arguments, which are scheduled for Oct. 23.
After testimony from Kroger's expert, Dr. Mark Israel, an antitrust economist, on Oct. 7 in the Seattle courtroom, the national grocer reiterated that its merger with Albertsons will help the combined company compete effectively and offer customers the lowest possible prices, while providing good-paying jobs to union workers.
Kroger said that the merger will result in substantial efficiencies, including cost synergies, which will allow the company to compete for customers and associates more effectively than either can alone.
According to Upside’s "Consumer Spend Report 2024," today's shoppers spend their food dollars at about three separate stores monthly, with 81% of grocery shoppers comparing prices across stores.
Kroger contended that it's singularly focused on closing the pricing gap with Walmart, one of its biggest competitors. The merger will allow the national grocer to drive down pricing at Albertsons so those stores can better compete with Walmart – to which Albertsons is currently losing share of wallet.
[RELATED: Kroger in Court - Ruling to Decide Fate of Albertsons]
As part of its plans, Kroger will dedicate $1 billion dollars in pricing investments, of which more than $100 million will specifically be invested to lower prices in stores across the state of Washington.
Kroger insisted that the efficiencies generated by the merger aren't just aspirational – they are also supported by its track record of lowering prices for customers following mergers. This included Kroger's investment of $100 million aimed at cutting prices at Roundy's stores after its acquisition of that chain in 2015. Plus, the acquisition of Harris Teeter 10 years ago led to lower prices after a $125 million investment.
Washington State Attorney General Bob Ferguson filed a lawsuit on Jan. 15 to block the Kroger-Albertsons-merger. In the suit, Ferguson asserted that the proposed merger of the two largest supermarket companies in Washington state will severely limit shopping options for consumers and raise grocery prices. Washington state is also seeking to avoid the situation it found itself in a decade ago, when Albertsons acquired the Safeway chain, which resulted in Haggen’s bankruptcy.
The Washington case is one of three attempts to block the mega-merger. Kroger and Albertsons' legal teams are currently flying between Washington to Colorado as they work on another trial in Denver. Additionally, Oregon U.S. District Judge Adrienne Nelson is still weighing the case that wrapped in her court in late September, noting that the deliberation process is moving as “as expeditiously as possible.”
Cincinnati-based Kroger serves more than 11 million customers daily through a digital shopping experience and retail food stores under a variety of banner names. The grocer employs 420,000 associates and is No. 4 on The PG 100, Progressive Grocer’s 2024 list of the top food and consumables retailers in North America.
As of June 15, Albertsons Cos. operated 2,269 retail food and drug stores with 1,725 pharmacies, 403 associated fuel centers, 22 dedicated distribution centers and 19 manufacturing facilities. The Boise, Idaho-based company operates stores across 34 states and the District of Columbia under more than 20 well-known banners. Albertsons is No. 9 on The PG 100.
