Stopping Mergers Won’t Save Grocery Stores

OPINION: EDITOR'S NOTE

Grocery stores are the lifeblood of the community.

They are an essential service, like firefighters and hospitals.

So why is everyone suddenly attacking grocers as greedy profiteers looking to stomp on workers and consumers?

Well, it’s an election year. The Biden administration has made a national pastime of calling out retailers and consumer goods companies for post-COVID prices being higher and packages being smaller. Plus, the days of consumer love for grocery retailers being “heroes” (as during the pandemic) are far behind us. That’s my reaction to the news that the Federal Trade Commission has sued to block Kroger’s merger with Albertsons. 

Anyone with a bit of business sense knows that this merger will allow the two companies to achieve greater scale to better compete with the discounters eating away at their shrinking share of grocery sales. The merger will also allow the new, larger company to consolidate operations, cut expenses, reduce costs and negotiate lower prices with suppliers — all of which will benefit consumers and workers. 

Blocking this merger will not stop high prices, consolidation or job losses in the traditional grocery industry. But blocking this merger will hurt the traditional supermarket retailers that we all want to see thrive, including Kroger and Albertsons, to the detriment of workers and consumers.    

As former U.S. Rep. Kurt Schrader, D-Ore., wrote in the Portland Tribune: “Competition is good for business and consumers, but there must be a level playing field. America’s supermarket grocers need to have the option to get bigger in order to better compete, drive down prices, and protect good-paying, American union jobs.”

Putting aside the political theater, the FTC, Kroger and Albertsons all have highly experienced legal teams fighting this out in court, and the transaction deserves intense scrutiny into whether monopolistic and restrictive trade practices might ensue with a merged company. 

According to Reuters, the FTC’s lawsuit was assigned to U.S. District Judge Adrienne Nelson, a former Oregon Supreme Court justice who was confirmed to the federal bench in February 2023. Nelson was a public defender in the late 1990s and then worked in private practice from 1999 to 2004 at the worker-focused labor and employment firm Bennett Hartman, where her clients included labor unions. A Reuters search of U.S. court cases in Oregon didn’t yield records of any other antitrust cases before Nelson, who likely won’t be scheduling a hearing on the matter for months. A protracted litigation timeline seems certain.

In the end, I believe the two sides will eventually hash out terms seen as more beneficial for workers and consumers (divesting more stores, selling more assets, etc.), and the $24.6 billion deal will go through. 

PG’s Editorial Advisory Board

Progressive Grocer has been fortunate for more than 100 years to cover this industry, and we want to see every grocery retailer thrive. With the Kroger-Albertsons deal — the biggest merger ever in the U.S. grocery sector — in the crosshairs, and so much other important news happening in this industry, PG is pleased to announce the creation of a new Editorial Advisory Board in 2024. The Editorial Advisory Board will bring highly respected and accomplished professionals in the grocery industry to advise and review the direction of PG content, with the aim of widening our reach and enhancing the quality of our offering to you, our cherished reader.

Progressive Grocer’s Editorial Advisory Board members are:

• Lynette Ackley, Group VP Merchandising, HBC, Consumables and Hardlines, Meijer
• Charles D’Amour, Executive Chairman, Big Y Foods
• Ryan Draude, Head of Loyalty, Giant Food
• Zachary Lane, Director of Retail Systems, Fareway Stores 
• Kevin Miller, Chief Marketing Officer, The Fresh Market
• Diana Marshall, Chief Growth Officer, Sam’s Club
• Ryan Roberts, EVP of Perishables, Hy-Vee
• Rachel Shemirani, VP, Barons Markets

But we don’t just want to hear from our new board. We want to hear from you. Let us know what you think about the Kroger-Albertsons deal and other pressing issues of the day in grocery, as well as how we can do better in shining a light on them.