🛒 Kroger-Albertsons Merger: National Impact

[storewanderer]

If this is the case, they actually need to say it because those are valid issues that are not being talked about when people talk against this merger. These politicians are looking for PR points and something to campaign with. nothing more. But their going against it is worth something, I guess... better than the lawmakers in the impacted states who seem to be radio silent now. Not sure if the CA/WA ones who should be fighting this loudly got bought off or what.

If they want PR points, then they can yell about it to the media, but if they actually plan to file a lawsuit to block it, then it is best to keep quiet.

At this point I think states are waiting to see what the FTC does. If the FTC files a case to block it, states may join the settlement talks. If the FTC gives the go-ahead, a few states might file their own lawsuit, either to block it or to get more concessions.

We will see what happens. More local politicians need to go against this. I think in an election year the politicians in these states are preoccupied with other matters.

FTC needs to hurry up and do something before these chains pull a 7-Eleven/Speedway and just merge themselves as planned "in early 2024" and do the divest plan as they have set up with C&S without FTC approval... Didn't Alpha Beta/Lucky also do something where they merged themselves without approval back in the 80's?

The other impacted party I see here is C&S. They stand to gain a lot if this deal goes through due to the bargain purchase of the divested stores/warehouses. If it doesn't go through... can they say they were harmed? They could have deployed money on other expansion efforts... if this drags on and doesn't ultimately go through, will they be able to prove they were harmed?

[ClownLoach]

If this is the case, they actually need to say it because those are valid issues that are not being talked about when people talk against this merger. These politicians are looking for PR points and something to campaign with. nothing more. But their going against it is worth something, I guess... better than the lawmakers in the impacted states who seem to be radio silent now. Not sure if the CA/WA ones who should be fighting this loudly got bought off or what.

If they want PR points, then they can yell about it to the media, but if they actually plan to file a lawsuit to block it, then it is best to keep quiet.

At this point I think states are waiting to see what the FTC does. If the FTC files a case to block it, states may join the settlement talks. If the FTC gives the go-ahead, a few states might file their own lawsuit, either to block it or to get more concessions.

I think this is the case. They know that the FTC is going to sue to block, so no point in discussing what becomes a court matter and less of a political situation. Meanwhile I have a feeling Kroger is negotiating with the FTC directly.

Kroger is 100% correct that it is silly to shoehorn and pretend that Walmart, Costco, Dollar General and such are not competing with them. But then Kroger makes preposterous statements such as Amazon selling incredible amounts of food which isn't true, and grossly mis-stating Costco's sales figures claiming their online food sales are over 4X what Costco's actual books state they sell online including the high dollar categories of jewelry, appliances, and tires that have effectively moved to the website (all appliances being delivered go to the online store, all tires ordered in go to the online store which is most as they now carry very few in regular store inventory). At the end of the day, the merger rules are poorly written and the definitions of market share must recognize the fact that we are in an omnichannel world today where the same items are sold different ways. If the FTC wants to continue to insist on doubling down on their dated approaches to what market share is then I think Kroger has a winning court case because who in their right mind would say that another consumer business selling meat, produce and other foods to the public is not relevant just because it is registered under a different industrial code?

If we changed categories and were discussing pharmacy, the FTC arguments are that CVS, Rite Aid and Walgreens compete with one another but they do not compete with Walmart, Costco, Amazon online pharmacy, or even CVS inside Target. So if say Walgreens was trying to acquire the remains of Rite Aid it would be blocked under the same logic, but if Walmart wanted to acquire Rite Aid it would be rubber stamped approved because they are "different." No, they're not!

So they need to revise that approach and use actual data instead of the lies (yes I said that) Kroger reports and see what the real damage is by market. There may be some areas where no remedy is needed at all, while others require so much more than current proposals that Kroger would be forced to divest more than they will tolerate. SoCal might only require the "across the street" stores to divest but there may be no viable option for the PNW short of releasing nearly every Safeway thus rendering the merger a pointless exercise since nothing much will be acquired and their money would be better spent on other transactions.

[pseudo3d]

If this is the case, they actually need to say it because those are valid issues that are not being talked about when people talk against this merger. These politicians are looking for PR points and something to campaign with. nothing more. But their going against it is worth something, I guess... better than the lawmakers in the impacted states who seem to be radio silent now. Not sure if the CA/WA ones who should be fighting this loudly got bought off or what.

If they want PR points, then they can yell about it to the media, but if they actually plan to file a lawsuit to block it, then it is best to keep quiet.

At this point I think states are waiting to see what the FTC does. If the FTC files a case to block it, states may join the settlement talks. If the FTC gives the go-ahead, a few states might file their own lawsuit, either to block it or to get more concessions.

We will see what happens. More local politicians need to go against this. I think in an election year the politicians in these states are preoccupied with other matters.

FTC needs to hurry up and do something before these chains pull a 7-Eleven/Speedway and just merge themselves as planned "in early 2024" and do the divest plan as they have set up with C&S without FTC approval... Didn't Alpha Beta/Lucky also do something where they merged themselves without approval back in the 80's?

The other impacted party I see here is C&S. They stand to gain a lot if this deal goes through due to the bargain purchase of the divested stores/warehouses. If it doesn't go through... can they say they were harmed? They could have deployed money on other expansion efforts... if this drags on and doesn't ultimately go through, will they be able to prove they were harmed?

The Lucky/Alpha Beta merger was an unprecedented disaster for American Stores. They had to divest most of Alpha Beta to keep Lucky (a few stores were converted), Alpha Beta went on to become Ralphs and be a competitor up to now, and in the next five years jettisoned 150 stores in the chain across several divisions.

[ClownLoach]

If they want PR points, then they can yell about it to the media, but if they actually plan to file a lawsuit to block it, then it is best to keep quiet.

At this point I think states are waiting to see what the FTC does. If the FTC files a case to block it, states may join the settlement talks. If the FTC gives the go-ahead, a few states might file their own lawsuit, either to block it or to get more concessions.

We will see what happens. More local politicians need to go against this. I think in an election year the politicians in these states are preoccupied with other matters.

FTC needs to hurry up and do something before these chains pull a 7-Eleven/Speedway and just merge themselves as planned "in early 2024" and do the divest plan as they have set up with C&S without FTC approval... Didn't Alpha Beta/Lucky also do something where they merged themselves without approval back in the 80's?

The other impacted party I see here is C&S. They stand to gain a lot if this deal goes through due to the bargain purchase of the divested stores/warehouses. If it doesn't go through... can they say they were harmed? They could have deployed money on other expansion efforts... if this drags on and doesn't ultimately go through, will they be able to prove they were harmed?

The Lucky/Alpha Beta merger was an unprecedented disaster for American Stores. They had to divest most of Alpha Beta to keep Lucky (a few stores were converted), Alpha Beta went on to become Ralphs and be a competitor up to now, and in the next five years jettisoned 150 stores in the chain across several divisions.

Alpha-Beta wound up in the Yucaipa group under Ron Burkle, the former supermarket magnate. They acquired Ralphs and merged them together only to then sell to Fred Meyer. This was a disastrous pairing for Ralphs who has since shed nearly every Alpha-Beta unit or had to rebuild/expand them to Ralphs standards at significant expense (I know there are a handful with minimum improvements left in LA). Today Ralphs has less stores than before they were acquired, and I am not sure that would be the case if they had not been merged with Yucaipa. I think the capital expenditure costs skyrocketed and thus Kroger was less interested in investing once they acquired Fred Meyer. Plus the failed Norcal expansion that Kroger had to kill. If Ralphs only consisted of the newer and larger fleet of Ralphs stores I think Kroger would have built out more of them especially in fast growth areas like the Inland Empire, Central Coast, and Ventura where they're now in last place.

[storewanderer]

We will see what happens. More local politicians need to go against this. I think in an election year the politicians in these states are preoccupied with other matters.

FTC needs to hurry up and do something before these chains pull a 7-Eleven/Speedway and just merge themselves as planned "in early 2024" and do the divest plan as they have set up with C&S without FTC approval... Didn't Alpha Beta/Lucky also do something where they merged themselves without approval back in the 80's?

The other impacted party I see here is C&S. They stand to gain a lot if this deal goes through due to the bargain purchase of the divested stores/warehouses. If it doesn't go through... can they say they were harmed? They could have deployed money on other expansion efforts... if this drags on and doesn't ultimately go through, will they be able to prove they were harmed?

The Lucky/Alpha Beta merger was an unprecedented disaster for American Stores. They had to divest most of Alpha Beta to keep Lucky (a few stores were converted), Alpha Beta went on to become Ralphs and be a competitor up to now, and in the next five years jettisoned 150 stores in the chain across several divisions.

Alpha-Beta wound up in the Yucaipa group under Ron Burkle, the former supermarket magnate. They acquired Ralphs and merged them together only to then sell to Fred Meyer. This was a disastrous pairing for Ralphs who has since shed nearly every Alpha-Beta unit or had to rebuild/expand them to Ralphs standards at significant expense (I know there are a handful with minimum improvements left in LA). Today Ralphs has less stores than before they were acquired, and I am not sure that would be the case if they had not been merged with Yucaipa. I think the capital expenditure costs skyrocketed and thus Kroger was less interested in investing once they acquired Fred Meyer. Plus the failed Norcal expansion that Kroger had to kill. If Ralphs only consisted of the newer and larger fleet of Ralphs stores I think Kroger would have built out more of them especially in fast growth areas like the Inland Empire, Central Coast, and Ventura where they're now in last place.

I think you are right here. Ralphs in its form without Alpha Beta would have been a much better fit for Kroger than with those lousy small stores mixed into the lot (Cala/Bell came from Yucaipa too- all very small stores). Add in the NorCal Ralphs banner which was mostly 45k square foot outdated/not great located former Albertsons units and that was yet another block of stores that wasn't a great fit for Ralphs or Kroger but that initiative was all Fred Meyer and a lot of the capex to do the major remodels had already been committed at the time of merger so Kroger moved forward with it. Remodels stopped by early 2001 but Kroger did proceed with 3 new construction stores (they owned all of those) in future years in Sacramento (plus 2 in Fresno, 2 in Bakersfield).

[retailfanmitchell019]

Two more Senators, Jacky Rosen (Nev.) and Ron Wyden (Ore.) have showed opposition to the merger:
https://www.reviewjournal.com/business/ ... s%20merger

Wyden wants the merger to be blocked: https://www.wyden.senate.gov/news/press ... ons-merger

Oregon state health officials are also seeking community help to review the merger’s impact on pharmacies: https://www.oregonlive.com/business/202 ... erger.html

This is yet another issue, with Rite Aid’s bankruptcy being a factor in the Oregon pharmacy market. CVS has few freestanding stores in Oregon.

The PNW is definitely the harbinger for this merger.

[storewanderer]

Two more Senators, Jacky Rosen (Nev.) and Ron Wyden (Ore.) have showed opposition to the merger:
https://www.reviewjournal.com/business/ ... s%20merger

Wyden wants the merger to be blocked: https://www.wyden.senate.gov/news/press ... ons-merger

Oregon state health officials are also seeking community help to review the merger’s impact on pharmacies: https://www.oregonlive.com/business/202 ... erger.html

This is yet another issue, with Rite Aid’s bankruptcy being a factor in the Oregon pharmacy market. CVS has few freestanding stores in Oregon.

The PNW is definitely the harbinger for this merger.

I am glad the NV Senator who is up for re-election this year finally came out and said something, I think this is the first comment we have heard from her on this merger. The union in Las Vegas must have provoked her to talk out on it, and it appears to have taken them significant effort to do so- like over a year. Better late than never. Hopefully we will get some other new politicians commenting against this merger as well.

OR/WA/CO should really be loudly opposing this. The divest remedy in CA also warrants significant action from CA as it is so insufficient in terms of number of stores divested.

I am also glad OR is commenting on the pharmacy issue as I have said before this in my opinion is also a big deal with this merger. Also a big deal in CO where there are no Rite Aids, almost no freestanding CVS units...

[ClownLoach]

Two more Senators, Jacky Rosen (Nev.) and Ron Wyden (Ore.) have showed opposition to the merger:
https://www.reviewjournal.com/business/ ... s%20merger

Wyden wants the merger to be blocked: https://www.wyden.senate.gov/news/press ... ons-merger

Oregon state health officials are also seeking community help to review the merger’s impact on pharmacies: https://www.oregonlive.com/business/202 ... erger.html

This is yet another issue, with Rite Aid’s bankruptcy being a factor in the Oregon pharmacy market. CVS has few freestanding stores in Oregon.

The PNW is definitely the harbinger for this merger.

I am glad the NV Senator who is up for re-election this year finally came out and said something, I think this is the first comment we have heard from her on this merger. The union in Las Vegas must have provoked her to talk out on it, and it appears to have taken them significant effort to do so- like over a year. Better late than never. Hopefully we will get some other new politicians commenting against this merger as well.

OR/WA/CO should really be loudly opposing this. The divest remedy in CA also warrants significant action from CA as it is so insufficient in terms of number of stores divested.

I am also glad OR is commenting on the pharmacy issue as I have said before this in my opinion is also a big deal with this merger. Also a big deal in CO where there are no Rite Aids, almost no freestanding CVS units...

I just don't see any way to remedy the problems in Washington state and Oregon. There just aren't enough competitors there. It really is bad enough to justify squashing the entire merger over those two states. And I'm not even sure it would ultimately be good for Krogersons, as the lack of competition will drive customers to Walmart and strengthen their position in what is likely one of their least saturated markets. There aren't enough ethnic operators either and as a result they operate more like a niche business versus the SoCal operations where they're running more mainstream stores to take advantage of the relatively underwhelming businesses of Ralphs, Vons and Albertsons.

As I said before I would be fine with only forcing the sale of any direct overlap in California (same intersection, across the street/highway from each other, very close by less than a quarter mile apart, including "leftovers" from past merger divest errors like Vons across the street from Albertsons). Two and three store towns/markets also need to be evaluated separately, but I still question if C&S is the answer or rather if they need to get real, enforceable agreements not to consolidate in those towns beyond taking them at their word.

The other point is that they must be ordered to release any closed store for lease immediately and must not "strip" or otherwise damage the store to the point where it cannot be easily reused as a supermarket (my understanding is that some grocers have done this to discourage grocery reuse, they remove refrigeration infrastructure, demolish all interior walls, fill drains with cement etc.). If they own the building then there needs to be a C&S type firm that agrees to immediately write a (small) check and take ownership of the store with the intent to flip it either via sale or lease, and Krogersons needs to be accountable for ensuring that the facility is in good condition before the automatic sale. Basically they must be agreeable to hold up their end of the bargain, they claim no closures or layoffs, so then if they're being honest they should not have any problem signing to basically forfeit stores they close and pay landlords full lease severance to make room for competitors.

I still do not trust the FTC to get the divestiture scheme right at all either. Way too much discussion of C&S as the right buyer, which makes me suspicious that they are a distraction for the real issue of what locations were chosen to be kept vs sold. The FTC does an absolutely horrible job with this as can be seen with how poorly they executed the Central Coast of California where I firmly believe there would still be more open Vons and Albertsons today instead of all the Grocery Outlet and Smart&Final low service stores that wound up in their spaces after the Haggen collapse. They managed to create exactly what they intend to protect against which was food deserts.

[storewanderer]

I just don't see any way to remedy the problems in Washington state and Oregon. There just aren't enough competitors there. It really is bad enough to justify squashing the entire merger over those two states. And I'm not even sure it would ultimately be good for Krogersons, as the lack of competition will drive customers to Walmart and strengthen their position in what is likely one of their least saturated markets. There aren't enough ethnic operators either and as a result they operate more like a niche business versus the SoCal operations where they're running more mainstream stores to take advantage of the relatively underwhelming businesses of Ralphs, Vons and Albertsons.

As I said before I would be fine with only forcing the sale of any direct overlap in California (same intersection, across the street/highway from each other, very close by less than a quarter mile apart, including "leftovers" from past merger divest errors like Vons across the street from Albertsons). Two and three store towns/markets also need to be evaluated separately, but I still question if C&S is the answer or rather if they need to get real, enforceable agreements not to consolidate in those towns beyond taking them at their word.

The other point is that they must be ordered to release any closed store for lease immediately and must not "strip" or otherwise damage the store to the point where it cannot be easily reused as a supermarket (my understanding is that some grocers have done this to discourage grocery reuse, they remove refrigeration infrastructure, demolish all interior walls, fill drains with cement etc.). If they own the building then there needs to be a C&S type firm that agrees to immediately write a (small) check and take ownership of the store with the intent to flip it either via sale or lease, and Krogersons needs to be accountable for ensuring that the facility is in good condition before the automatic sale. Basically they must be agreeable to hold up their end of the bargain, they claim no closures or layoffs, so then if they're being honest they should not have any problem signing to basically forfeit stores they close and pay landlords full lease severance to make room for competitors.

I still do not trust the FTC to get the divestiture scheme right at all either. Way too much discussion of C&S as the right buyer, which makes me suspicious that they are a distraction for the real issue of what locations were chosen to be kept vs sold. The FTC does an absolutely horrible job with this as can be seen with how poorly they executed the Central Coast of California where I firmly believe there would still be more open Vons and Albertsons today instead of all the Grocery Outlet and Smart&Final low service stores that wound up in their spaces after the Haggen collapse. They managed to create exactly what they intend to protect against which was food deserts.

On the Central Coast aside from the Los Osos Vons which probably would have been closed regardless, I don't think Albertsons/Vons would have done one single store closure had they not merged (and maybe even if they had been allowed to not divest anything in the merger).

They had already done a lot of closures of junk stores in recent years- the Albertsons in SLO on the highway out to Los Osos (became Spencers, think it closed too), the Vons in Morro Bay (became Country Crock or something, maybe closed too) were the more recent ones. But the divests let some really nice and/or really high performing stores go to limited service operators who were a pathetic fit. I never understood why Raleys didn't swoop in and buy some of those stores, it would not have been a major geographic stretch for them. Even Save Mart would have probably worked.

[retailfanmitchell019]

Arizona AG Kris Mayes cites antitrust laws for the state’s opposition to the merger:
https://ktar.com/story/youtube_videos/v ... ns-merger/

AZ is another battleground for the merger: Albertsons/Kroger would get a combined 40% market share in Metro Phoenix without divests. In Tucson (Pima County), the combined share is closer to 50% (Walmart is weaker in Tucson due to a lack of Supercenter presence).