https://www.supermarketnews.com/laws-re ... ponses-ftc
Albertsons and Kroger have slapped back at the FTC.
Some notes:
"The retailers assert that C&S would be well-positioned to operate the stores and that their divestiture plan bears no resemblance to previous failed divestitures that Safeway and Albertsons made to Haggen and Lawrence Bros." I'm not sure if someone made a typo but Albertsons bought stores FROM Lawrence Bros. (an IGA operator that sold about half of its stores to United Supermarkets in 2016). However, C&S doesn't have a track record of operating stores successfully with any longevity and never this much at once.
"'C&S is not a mom-and-pop operation or a risky private equity venture,' Kroger said in its filing. 'It is a well-capitalized company with deep industry experience.'"
It's taking on a lot of debt to buy the stores (and again, why they're not buying the additional 200 stores is a mystery...if that was at all an option to success I'm sure Kroger would jump on it. But C&S doesn't have experience actually OPERATING stores. They kept the lights on at Bruno's and Grand Union until they got sold to other operators, and they seemed to do the same with the new Grand Union stores that Tops/Price Chopper divested.
"It cited competition from other grocery retailers, including Walmart, Target, Costco, Amazon/Whole Foods, other specialty grocers such as Trader Joe's and Sprouts, and dollar stores."
See this is what someone was stating, if you decide these are competition you're essentially arguing that the supermarket is functionally obsolete and its the only way to survive. That was the way Sirius Satellite Radio and XM Radio got away with it, and part of the agreement was changes in pricing (and a freeze in pricing for three years--no way can Albertsons/Kroger freeze prices for three years!)
"Albertsons cited Costco in particular as one of the company's 'most fervent competitors.'" Is it really? I guess when you knock off Kroger and Walmart, it is...but that still seems like a stretch.
"'Even crediting the Commission’s improper market definition, the number of competitors will not change,' Kroger said."
Until C&S starts closing stores which they all but outright stated they would do. And every merger whittles away the number of competitors. It doesn't matter when there are three or four other companies to pick up the pieces, it matters when you have to invent one because now, in every market there is one or zero other major competitors. When it came to John Van de Kamp and his crusade against American Stores, the merger of Lucky and Alpha Beta still left a number of other chains in SoCal, including Ralphs, Boys Markets, Hughes, Albertsons, and Vons.
