Getting away with merger: How will Kroger’s plan to acquire Albertsons impact area stores?
Kroger, owner of City Market and King Soopers, issued a press release in October 2022 announcing its plans to acquire Albertsons for $24.6 billion, raising a number of concerns from state and federal officials of a grocery monopoly forming from a merging of the two grocery giants.
If approved, the deal is expected to close in 2024.
In an effort to secure regulatory approval, the two stores are in talks of selling off more than 400 locations throughout the country to C&S Wholesale Grocers, according to Bloomberg News.
Among the many areas mentioned for potential store locations, “Mountain states” made the list, which is why Attorney General Phil Weiser has been busy touring much of Colorado recently to meet with consumers and answer questions.
“We have a smorgasbord of concerns that we’re going to continue looking at,” he said. “One is could this merger result in a closure of stores that would have a series of effects. After the merger between Safeway and Albertsons, there was a store in Glenwood Springs that was closed, circa 2013, and that store remains closed a decade later, no one has gone in to occupy it.”
Weiser has been actively investigating the potential merger to determine whether it would violate antitrust laws, as well as determine the fairness for the consumer.
One of the main concerns he’s heard expressed is the issue of store closures, which could result in food deserts, cutting communities off from grocery stores within a reasonable distance.
A Kroger spokesperson said in a statement that it “will not lay off any frontline associates or close any stores, distribution centers or manufacturing facilities as a result of the merger.”
“As we have in past mergers, we will hold ourselves accountable to our customer commitments, including investing $500 million to lower prices, offering a broader selection of fresh products, and delivering value without compromise through an expanded Our Brands portfolio.”
The statement added that Kroger has a “long-standing commitment” to investing in its associates and intends to invest $1 billion to raise wages and benefits should the merger take place.
Along with closures, Weiser said additional comments he’s received have revolved around the uncertainty of job loss and limited food chains.
“One thing that’s come up in some of the conversations is there have been community-wide efforts to develop a food mapping program to understand where food comes from and what the food ecosystem looks like,” he said. “San Luis Valley, did a very extensive project on this, for example.”
While visiting Montrose, he said he heard from a number of farmers who expressed concerns over less access to local produce resulting from a more concentrated company and less competition.
With fewer competitors, the ability to compare prices is potentially lost along with the benefit of lower prices, leaving consumers to pay more at a time when food prices have already increased and people are struggling to make ends meet.
Clark’s Market CEO Tom Clark, Jr. has many store locations throughout the valley that could be potentially affected, but he said the real concern is for the communities. In a recent statement provided to The Aspen Times, he said with less competition, it’s almost always the consumer who feels the impact the most.
“Groceries are already more expensive due to inflation, and the increasing costs of goods and the impact of the Kroger/Albertsons merger will only exacerbate the impact to consumers in many places,” he said.
Though the listening tour is winding down to a close, Weiser said there’s still plenty of opportunity for the public to provide input online and are asked to do so at coag.gov/grocerymerger.
When asked if he could think of any potential upside to the merger moving forward, he said given the fact that he has yet to hear from both parties, he wants to give them each a chance to make that case before speculating on what positive outcomes could result.
“I believe that our democracy is a team sport, and that we need people on the field,” he said. “The consumers who are thinking about the merger or those growers and sellers, those workers, they have a voice, and I’ve worked hard going across the state with these town halls to hear from people, and we’ve created this website, so that people can be further heard. We encourage people to let us know what’s on their minds, their concerns, ideas, thoughts — any feedback is welcome.”
This story is from AspenTimes.com.
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