Kroger and Albertsons merger needed to close the gap with Walmart, executives testify

Jozette Leal, left, holds a placard as the 20-year-veteran of toiling at Safeway joins fellow union members in a protest against the proposed merger of grocery store chains Kroger and Albertsons Monday, Sept. 30, 2024, outside the City/County Building while inside the courthouse the Colorado attorney's general office presented its case against the merger in the opening day of the trial in Denver. .

Kroger aims to align Albertsons’ prices with its lower costs, benefitting consumers and boosting its sales. By the fourth year, Kroger forecasts that Albertsons and Safeway customers will enjoy $1 billion a year in savings, McMullen said.Colorado, however, won’t see the same level of benefits. That’s because only 19 stores will come under the Kroger umbrella.

McMullen and Aitken emphasized that Walmart, with 3.5 times the grocery sales of Kroger, is the key competitor not Albertsons. Kroger has built its business strategy entirely around matching Walmart’s prices and staying ahead of a host of other rivals like Costco, Whole Foods, Trader Joe’s, etc. “We have 66 units up in the mountains for our associates so they can afford to stay up there. These costs are costs we are looking to recoup,” McMullen said.Kroger developed a “flywheel” strategy to close the gap with Walmart. Lower prices on essential food staples so more customers come in the door. More sales generate more money that can be pumped back into price reductions.

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Kroger-Albertsons merger needed to close pricing gap with Walmart, executives testifyTwo Kroger executives took the stand Monday in Denver District Court saying a merger with Albertsons is the key to competing with Walmart.
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Kroger-Albertsons merger trial begins in ColoradoDanielle Kreutter is a multimedia journalist for Denver7 KMGH in Denver, Colorado.
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Federal Government Urges Court To Block Kroger-Albertsons MergerThe Federal Trade Commission (FTC) argues that the $24.6 billion merger between Kroger and Albertsons would eliminate competition and lead to higher food prices for consumers, while the supermarket chains claim it would allow them to better compete with rivals like Walmart and Amazon.
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Albertsons and Kroger CEOs testify in pivotal trial over $24.6 billion mergerThe heads of Albertsons and Kroger took the stand today in a trial that will decide if a massive merger between the two companies can move forward.
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