Kroger Unveils Huge $20B Update

SHOPPERS have rejected Kroger’s attempt at a $20 billion merger with rival Albertsons, despite the company claiming it will cut prices.

Senators Elizabeth Warren and Bernie Sanders were among those condemning the move this week as shoppers feared a new lack of competition would trigger a price hike in stores.

Kroger announced the new merger this week

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Kroger announced the new merger this weekPhoto credit: Getty

The deal talks, which would bring together several popular grocery chains including Ralph’s and Von’s, emerged on Friday.

It would bring together more than 2,700 Kroger and 2,200 Albertsons grocery stores across the United States, according to Reuters.

The stores collectively employ more than 710,000 people in nearly 5,000 stores.

They also have a total of almost 4,000 pharmacies and more than 2,000 gas stations.

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Jamie Court, president of Santa Monica-based consumer advocacy group Consumer Watchdog, said the merger was a “terrible idea.”

“This would give a large behemoth too much market power, especially in California,” Court said.

“We call on the administration to oppose this merger.”

Massachusetts Senator Elizabeth Warren said, “The FTC should oppose this deal.”

“Grocery chains like Kroger and Albertsons are price drivers for families with inflated grocery prices, and further corporate consolidation would lead to higher prices, employee layoffs and weaker supply chains,” she added

Another Twitter user commented, “Kroger just agreed to buy its competitor Albertsons for $24.6 billion.

“Eliminating competition will result in higher prices, lower food quality, overworked staff, lower wages for workers, fewer small businesses, etc.”

The backlash comes despite Kroger’s claim that it would use the merger to lower prices and raise wages.

The merger would also give Kroger and Albertsons “a broader supplier base,” it said.

This should allow both to maximize their supply chains and get products to customers faster.

Kroger estimates the merger would result in reaching 85 million homes.

Rodney McMullen, Kroger’s chairman and chief executive, pledged that he would use his $1 billion in annual savings to lower prices after recent inflation, revamp the retail stores if the merger is successful, and the Increase employee wages and benefits.

“We will use the insights from each company to deliver greater value and a better experience to more customers, more employees and more communities,” McMullen said in a conference call with analysts and investors on Friday.

McMullen noted that it will also allow Kroger to “continue to improve technology and innovation, promote healthier lifestyles, expand our healthcare and pharmacy network, and grow our alternative for-profit businesses.”

Based in Cincinnati, Kroger operates 2,800 stores in 35 states with subsidiaries including Ralph’s, Harris Teeter, Food 4 Less and Smith’s.

Based in Bosie, Idaho, Albertsons controls 2,273 stores in 34 states with sister companies including Vons, Pavillions, Safeway, Jewel-Osco and Shaw’s.

According to experts, the merger would have a huge impact on Southern California, the nation’s largest and most competitive food processing market, which would generate $4.6 billion in annual sales.

The Sun reported that under the agreement, Kroger will pay $34.10 each for Albertsons — a premium of almost 33 percent on the stock’s closing price on Wednesday.

As part of the merger, Kroger and Albertsons would also spin off up to 375 stores into a separate company called SpinCo.

Upon receipt of regulatory approval, the merger is expected to be completed in early 2024.

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Additionally, Kroger plans to expand its portfolio of fresh items while extending shelf life.

As part of the merger, Kroger and Albertsons would also spin off up to 375 stores into a separate company called SpinCo.

https://www.the-sun.com/news/6450635/kroger-reveals-albertsons-merger/ Kroger Unveils Huge $20B Update

DevanCole

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