Kroger to merge with Albertsons?

[TW-Upstate NY]

Here's the real question that nobody is willing to ask - it's very easy to determine when you just pull public company balance sheets which are public documents - HOW MUCH IS THE AMERICAN CONSUMER PAYING EACH MONTH IN CORPORATE DEBT SERVICING COSTS? I'll bet we are all paying more in debt service costs shopping these public companies than we pay in taxes now. This is the REAL cause of our rampant inflation and it is only going to get worse as long as these mergers keep getting approved and funded. Scary as all hell.

I've seen that here locally when Price Chopper bought Tops. Prior to the merger, I did most of my shopping at Price Chopper; they were competitive and I like supporting the "home team". Now they are so much higher on pretty much everything that aside from cherry picking their ad every now and then, I pretty much shop at Hannaford exclusively now.

[Romr123]

One big question is, what private labels will this Albertsons/Kroger use?

That also depends on the existing contracts that Albertsons has with it's suppliers. It'll probably be several years before they're completely transferred over to Kroger suppliers.

Labeling/branding can occur quite quickly...the vendor base is quite common for all the chains (with some regionalization).

Kroger runs an extensive private label MANUFACTURING business (Albertsons' is not quite as extensive) which will immediately benefit from additional volume and are generally optimized for production efficiency(if they're missing any of the volume, honestly---Kroger subsidiary Tara Foods, for instance, does private label peanut butter for the world, I think).

Fresh bread/bakery and fresh dairy and water/soft drinks consolidation are entirely questions of distribution (bulky/heavy/make sense to manufacture close to the store location); so you see the strange situations in isolated stores/divisions. This won't change with the merger...they'll keep what ever they've got and leverage it into the combined footprint.

Centralized meat/deli/fish/cheese/frozen bakery are similar to manufacturing--they'll take the extra volume gratefully.

[cw06]

One big question is, what private labels will this Albertsons/Kroger use?

That also depends on the existing contracts that Albertsons has with it's suppliers. It'll probably be several years before they're completely transferred over to Kroger suppliers.

Labeling/branding can occur quite quickly...the vendor base is quite common for all the chains (with some regionalization).

Kroger runs an extensive private label MANUFACTURING business (Albertsons' is not quite as extensive) which will immediately benefit from additional volume and are generally optimized for production efficiency(if they're missing any of the volume, honestly---Kroger subsidiary Tara Foods, for instance, does private label peanut butter for the world, I think).

Fresh bread/bakery and fresh dairy and water/soft drinks consolidation are entirely questions of distribution (bulky/heavy/make sense to manufacture close to the store location); so you see the strange situations in isolated stores/divisions. This won't change with the merger...they'll keep what ever they've got and leverage it into the combined footprint.

Centralized meat/deli/fish/cheese/frozen bakery are similar to manufacturing--they'll take the extra volume gratefully.

Honestly it wouldn't shock me if Kroger already makes some of Albertsons' private label products already. I worked at Harris Teeter during their Kroger buyout, and that was a big reason that it happened: Kroger was already a major supplier for them so supply chain disruptions were minimal.

[Bagels]

One big question is, what private labels will this Albertsons/Kroger use?

That also depends on the existing contracts that Albertsons has with it's suppliers. It'll probably be several years before they're completely transferred over to Kroger suppliers.

Labeling/branding can occur quite quickly...the vendor base is quite common for all the chains (with some regionalization).

Kroger runs an extensive private label MANUFACTURING business (Albertsons' is not quite as extensive) which will immediately benefit from additional volume and are generally optimized for production efficiency(if they're missing any of the volume, honestly---Kroger subsidiary Tara Foods, for instance, does private label peanut butter for the world, I think).

Fresh bread/bakery and fresh dairy and water/soft drinks consolidation are entirely questions of distribution (bulky/heavy/make sense to manufacture close to the store location); so you see the strange situations in isolated stores/divisions. This won't change with the merger...they'll keep what ever they've got and leverage it into the combined footprint.

Centralized meat/deli/fish/cheese/frozen bakery are similar to manufacturing--they'll take the extra volume gratefully.

Kroger has shrunk its manufacturing business in recent years. In contrast, Albertsons was seeking to expand its manufacturing business. I wouldn’t be surprised if Albertsons was catching up.

Kroger, for example, use to own several bottling plants and supply private label soda to numerous small grocers. But they’ve sold all but one or two, and we’re looking to sell those (they may have done so). It’s one of the major reasons Big K cola went from 39c-59c to almost $2 per two liter.

[Bagels]

That also depends on the existing contracts that Albertsons has with it's suppliers. It'll probably be several years before they're completely transferred over to Kroger suppliers.

Labeling/branding can occur quite quickly...the vendor base is quite common for all the chains (with some regionalization).

Kroger runs an extensive private label MANUFACTURING business (Albertsons' is not quite as extensive) which will immediately benefit from additional volume and are generally optimized for production efficiency(if they're missing any of the volume, honestly---Kroger subsidiary Tara Foods, for instance, does private label peanut butter for the world, I think).

Fresh bread/bakery and fresh dairy and water/soft drinks consolidation are entirely questions of distribution (bulky/heavy/make sense to manufacture close to the store location); so you see the strange situations in isolated stores/divisions. This won't change with the merger...they'll keep what ever they've got and leverage it into the combined footprint.

Centralized meat/deli/fish/cheese/frozen bakery are similar to manufacturing--they'll take the extra volume gratefully.

Honestly it wouldn't shock me if Kroger already makes some of Albertsons' private label products already. I worked at Harris Teeter during their Kroger buyout, and that was a big reason that it happened: Kroger was already a major supplier for them so supply chain disruptions were minimal.

I doubt Kroger manufactures any private label goods for Albertsons, but many of their private label goods have a common manufacture. All of the paper products, for example, are made by the same two companies.

[storewanderer]

Kroger has shrunk its manufacturing business in recent years. In contrast, Albertsons was seeking to expand its manufacturing business. I wouldn’t be surprised if Albertsons was catching up.

Kroger, for example, use to own several bottling plants and supply private label soda to numerous small grocers. But they’ve sold all but one or two, and we’re looking to sell those (they may have done so). It’s one of the major reasons Big K cola went from 39c-59c to almost $2 per two liter.

Albertsons may have said a lot of things but it seems like not much really went the way it needed to.

The Kroger 2 Liter are still .99 at Smiths (had been .79 for years). At Smiths this is made in Phoenix at a third party then distributed out via the distribution center in Las Vegas and eventually makes its way up to Reno.

Over at Safeway despite the soda coming from a plant about 3 hours away in the bay area owned by Albertsons, the 2 L Signature Cola is "on sale" for 1.29 and regularly costs 1.79.

[pseudo3d]

I will be interested to see, in successful Kroger markets, how converting Albertsons/Safeway Stores to a Kroger format works out. Will they increase volume in those stores- absolutely. But will the volume increase come from competitors or will it come from the longer term Kroger owned store? Kroger seems to be of the impression their format of a conventional supermarket will be the only one customers want in a market and customers won't seek other options. I am not so sure of this.

Converting any store to the Kroger format will take time and money--whether slowly or a weekend reset. I am curious how stores that have been converted to Kroger in Kroger-dependent markets have fared--Hiller's in Michigan and the Memphis Schnucks stores come to mind.

[storewanderer]

I doubt Kroger manufactures any private label goods for Albertsons, but many of their private label goods have a common manufacture. All of the paper products, for example, are made by the same two companies.

Roughly, this is what Kroger has in terms of plants and product lines.
https://www.interamericanproducts.com/plants.htm

There is a King Soopers Bakery in Denver at 60 Yuma Street not listed here. It hasn't been listed for years but still exists. It makes all private label breads, and also certain bakery items that go to the stores with the breads and are sold out of the bakery department itself such as some cookies and other things. Also a King Soopers meat plant at 65 Yuma Street in Denver which does all of the case ready meat for that division.

[retailfanmitchell019]

Roughly, this is what Kroger has in terms of plants and product lines.
https://www.interamericanproducts.com/plants.htm

I'm surprised they still have a dairy in Minnesota, a state that Kroger left 52 years ago.
And when all is said and done with this merger, only 2 states will not have a Kroger presence: Minnesota and Oklahoma.
There will be large enough markets around the US without a Kroger presence, or with minimal Kroger presence: NYC, upstate NY, pretty much all of Florida, most of Alabama, New Orleans, Pittsburgh, Cleveland, St. Louis, Kansas City, Des Moines, Sioux Falls, Fargo, San Antonio/south TX.
Well, a website has been launched for the merger: https://www.krogeralbertsons.com/

[storewanderer]

Roughly, this is what Kroger has in terms of plants and product lines.
https://www.interamericanproducts.com/plants.htm

I'm surprised they still have a dairy in Minnesota, a state that Kroger left 52 years ago.

That is a cheese plant. Near WI border.
Marginal quality product being produced there.
In the 00's when Kroger items started showing up at Smiths, a few cheese SKUs from that plant were some of the first items.

You can get a lot of cheese into boxes so despite its distance it is not a huge deal to transport the cheese from that plant down to the South or out the West or East.