Skip to main content

- Advertisement -

Kroger responds to FTC lawsuit

By
Ryan Beckman

Yesterday the Federal Trade Commission sued to block Kroger’s $24.6 billion acquisition of the Albertsons Cos. Inc. —the largest proposed supermarket merger in U.S. history — saying the deal is anticompetitive. In response, Kroger said blocking its merger with Albertsons will harm consumers and workers.

Kroger said its business model is to take costs out of the business and invest in lowering prices for customers. Kroger has reduced prices every year since 2003, resulting in $5 billion invested to lower prices and a 5 percent reduction in gross margin over this period.

"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," Kroger said in a statement. "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."

Kroger said it committed to investing $500 million to begin lowering prices day one post-close, and an additional $1.3 billion to improve Albertsons Cos.' stores.

The FTC charges that the deal would eliminate head-to-head price and quality competition, which have driven both supermarkets to lower their prices and improve their product and service offerings

Henry Liu, director of the FTC’s bureau of competition, said , "This supermarket mega merger comes as American consumers have seen the cost of groceries rise steadily over the past few years. Kroger’s acquisition of Albertsons would lead to additional grocery price hikes for everyday goods, further exacerbating the financial strain consumers across the country face today. Essential grocery store workers would also suffer under this deal, facing the threat of their wages dwindling, benefits diminishing, and their working conditions deteriorating.”

Kroger said as union membership continues to decline nationwide, especially in the grocery industry, this merger is the best way to secure union jobs, noting it has added more than 100,000 union jobs since 2012.

Though the FTC sees things differently, saying, Kroger’s proposed acquisition of Albertsons would immediately erase aggressive competition for thousands of grocery store workers, threatening the ability of employees to secure higher wages, better benefits and improved working conditions.

"The merging parties look forward to litigating this action in court so we can deliver the benefits of this merger to communities across America — lower prices, more choices and more good-paying union jobs for decades to come," Kroger said in its statement.

Ryan Beckman

Ryan Beckman

About Ryan Beckman  |  email

Ryan Beckman was born and raised in New Jersey. After studying creative writing at Rutgers University, he attended SUNY Binghamton and earned his master’s degree in English. The following year he and his wife, Amanda, journeyed to the province of Ontario to spend some time living in Toronto and cheering for the Maple Leafs. Ryan and Amanda now live in New York and spend their evenings staring at their ever-smiling son, Oscar.

Ryan is always looking for a good book to read, is sure to be a few hours behind on sleep and will never stop loving 8-bit games.

 

Tagged in:

- Advertisement -

- Advertisement -

- Advertisement -

- Advertisement -

- Advertisement -

- Advertisement -

- Advertisement -

- Advertisement -

- Advertisement -

- Advertisement -

- Advertisement -