Kroger CEO says shoppers would see price shift after merger with Albertsons

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Kroger operates 2,800 stores in 35 states, including brands like Ralphs, Smith’s and Harris Teeter. Albertsons operates 2,273 stores in 34 states, including…

Kroger CEO Rodney McMullen also addressed an issue that has worried shoppers in communities with both Albertson and Kroger-run stores: whether stores would close.insisted Wednesday that merging with rival Albertsons would allow the two supermarket companies to lower prices and more effectively compete with retail giants like Walmart, Costco and Amazon.

The Federal Trade Commission sued early this year to stop the merger the two companies proposed in Oct. 2022 after Kroger agreed to purchase Albertsons. The commission alleged the deal would eliminate competition and lead to higher food prices for already struggling consumers. McMullen countered that argument by saying that Albertsons prices are 10-12% higher than Kroger's and that the merged company would try to reduce the disparity as part of a strategy for keeping customers. Walmart now controls around 22% of U.S. grocery sales. Combined, Kroger and Albertsons would control around 13%.His statements and the upcoming testimony of Albertsons CEO Vivek Sankaran were expected to be critical components of the three-week hearing, which is at its mid-point.

The FTC and labor union leaders also claim that workers’ wages and benefits would decline if Kroger and Albertsons no longer compete with each other. They’ve additionally expressed concern that potential store closures could create so-called food and pharmacy “deserts” for consumers. Under the proposed deal, Kroger and Albertsons would sell 579 stores in places where their locations overlap to C&S Wholesale Grocers, a New Hampshire-based supplier to independent supermarkets that also owns the Grand Union and Piggly Wiggly store brands.

 

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