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KROGER shoppers aren’t sure how they feel about the chain’s plans to merge with Albertsons.
The $24.6 billion deal was announced in 2022 and immediately faced a lawsuit from the Federal Trade Commission (FTC).
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Antitrust concerns were detailed in the suit, with the FTC claiming that the merger would result in higher prices for American consumers and in lower-quality products, as well as a lack of healthy competition in the industry.
“Direct competition between Kroger and Albertsons has brought grocery prices down and the quality of grocery products and services up,” the FTC noted.
“The proposed acquisition would destroy this.”
Still, Kroger CEO Rodney McMullen and other executives have argued directly against the FTC’s claims.
During court hearings earlier this week, McMullen promised that price cuts on merchandise at Kroger would happen with the merger in only a day and continue far beyond that, per ABC affiliate WFAA.
“The day that we merge is the day that we will begin lowering prices,” McMullen said during questioning from an attorney with the FTC.
“We know that pricing is going to continue to go down.”
BUMPED UP
McMullen’s comments come after Andy Groff, Kroger’s senior director for pricing, faced questions about pricing from the FTC attorney.
Groff admitted that Kroger upped the costs for eggs and milk above inflation rates after an internal email sent to staff in March was shown in court.
“On milk and eggs, retail inflation has been significantly higher than cost inflation,” the email read, per Common Dreams.
In court, Groff added that Kroger intended to “pass through our inflation to customers.”
A Kroger spokesperson later argued that the email was “cherry-picked” and “covers a specific period and does not reflect Kroger’s decades-long business model to lower prices for customers by reducing its margins” when speaking to Bloomberg.
As the lawsuit battle continues, some Kroger shoppers have sided with the FTC against the merger.
FAN FURY
“So, less competition equals lower prices?” someone asked concerning McMullen’s comments in a post on Facebook.
The day that we merge is the day that we will begin lowering prices.
Rodney McMullen
“He took a different economics class than I did. I have lived this nightmare with one supermarket chain buying another.”
“There is nothing good about it. Employees lose out in every way and customers lose out because of less competition,” they continued.
“Says the man who makes $15.7 million,” another added in agreement.
“He can do lower rates now. This is an excuse,” wrote a third.
PRICING PROMISE
Kroger insists that their proposed partnership with Albertsons would help it compete with other retail giants like Walmart and Amazon, where the lower prices would supposedly come from.
To ease the FTC’s concerns, the supermarket chain also recently committed to investing $1 billion in food cost-cutting and agreed to divest 579 stores for $2.9 billion to C&S Wholesale Grocers in July.
Even so, the FTC seemingly remains unconvinced, claiming that in the 22 states where Kroger and Albertsons currently compete, prices and services are around the same, which is only a benefit to shoppers.
Additionally, the commission argued that the lack of competition would negatively impact wages and benefits for employees at both stores.
Kroger has also come under fire recently for other reasons.
A shopper recently raged over a same-medication error and demanded answers from the retailer online.
Someone else left their cart behind recently with hundreds of dollars worth of groceries after a “huge” checkout error.
