Kroger to merge with Albertsons?

[ClownLoach]

And the gloves are coming off. Kroger has placed a supposed expert quote on their website literally saying that Kroger and Albertsons could BOTH GO OUT OF BUSINESS if not allowed to merge! Apparently the competitive juggernaut of Amazon Fresh is going to kill both companies, at least according to this expert who probably makes more money than you or I. I'm sure she firmly believes that the spinoff or sale of any store will also mortally wound the company even if they are next door to each other.

From krogeralbertsons.com

"With Walmart and Amazon as competitors, it’s understandable that traditional grocery stores need to scale up to stay competitive. Critics see this as one less competitor in the market, but if Kroger and Albertsons are prevented from merging and go out of business because they can’t combine their resources to compete on price, it will be government meddling that stifled competition. If allowed to merge, they’ll be better able to put competitive pressure on the other market leaders and that’s a win for consumers."

Jessica Melugin

Competitive Enterprise Institute, Director of Center for Technology & Innovation

If this was remotely true (which it isn't), merging weak companies together to survive is almost NEVER a winning solution. Though I have to wonder if this is some weird admission that Kroger's financials are actually abysmal...after all, they did have all those issues with store closures and strike threats...

I know she doesn't specifically add the word Fresh and just refers to Amazon, but really Fresh is their largest conduit of grocery sales outside Whole Foods. I am still trying to understand how anyone considers Amazon to be noteworthy in any way in the grocery business. They are not worth mentioning in the same paragraph as Walmart, let alone the same sentence. Whole Foods prior to the sale had what, less than 2% of the US grocery share? I do not believe that Amazon has any significant or even measurable share of grocery deliveries outside of the few areas where Fresh stores exist. And as abysmal as they perform I believe Los Angeles is their top volume delivery market which still is not a lot of products. Those first few stores did great with deliveries after opening but then Amazon made so many pricing changes and struggled so much with in stocks that I expect they lost 90% of their daily delivery volume. Some Stores used to have their entire days budget in before opening, now I can't imagine that any of them come close to achieving any kind of budget let alone a positive operating margin. I believe that if broken down to true grocery orders with perishable foods on the ticket the total grocery revenues of Amazon outside of Whole Foods would be less than a few hundred million a year. What is that, a couple days worth of sales for Kroger? I saw some UFCW propaganda that listed the complete total revenue of Amazon (merchandise including marketplace sales, AWS, advertising, etc) and tried to sell all of those dollars as groceries to make them look like a grocery store competitor selling hundreds of billions which again is way out of line with reality. If Amazon had anything close to hundreds of billions in grocery sales my little neighborhood would probably require a dozen full delivery vans every day, and so would every other in America. The reality is 7-Eleven probably has a higher overall annual grocery volume than Amazon (minus Whole Foods).

[storewanderer]

Wouldn't you just love the SEC to sue Kroger over falsely reporting themselves as a going concern while publicly stating they could go out of business? Not that anyone believes their claims are true, but still.

All I am going to say about Kroger is... great private label program!

Problem is you have to go to their messy stores to get it, deal with their terrible digital app that offers up 850+ digital coupons but only lets you add 150 digital coupons at a time, pay their lousy self checkout that still doesn't accept Tap Cards, and walk through their icy parking lot because they couldn't be bothered to clear the ice.

The good thing about the Kroger and Albertsons merger is it will open up more space in the room for better, growing, grocery competitors. Amazon is probably not even going to be one of those competitors. Wal Mart unless they start building stores again likely already has reached its ceiling for market share.

But if the politicians buy off on what the Kroger Expert says, I guess all we can say is we elected gullible politicians. Not that I expect the politicians to be experts in the grocery business.

[veteran+]

And the gloves are coming off. Kroger has placed a supposed expert quote on their website literally saying that Kroger and Albertsons could BOTH GO OUT OF BUSINESS if not allowed to merge! Apparently the competitive juggernaut of Amazon Fresh is going to kill both companies, at least according to this expert who probably makes more money than you or I. I'm sure she firmly believes that the spinoff or sale of any store will also mortally wound the company even if they are next door to each other.

From krogeralbertsons.com

"With Walmart and Amazon as competitors, it’s understandable that traditional grocery stores need to scale up to stay competitive. Critics see this as one less competitor in the market, but if Kroger and Albertsons are prevented from merging and go out of business because they can’t combine their resources to compete on price, it will be government meddling that stifled competition. If allowed to merge, they’ll be better able to put competitive pressure on the other market leaders and that’s a win for consumers."

Jessica Melugin

Competitive Enterprise Institute, Director of Center for Technology & Innovation

What a joke! Shamefull SHILL

[buckguy]

And the gloves are coming off. Kroger has placed a supposed expert quote on their website literally saying that Kroger and Albertsons could BOTH GO OUT OF BUSINESS if not allowed to merge! Apparently the competitive juggernaut of Amazon Fresh is going to kill both companies, at least according to this expert who probably makes more money than you or I. I'm sure she firmly believes that the spinoff or sale of any store will also mortally wound the company even if they are next door to each other.

From krogeralbertsons.com

"With Walmart and Amazon as competitors, it’s understandable that traditional grocery stores need to scale up to stay competitive. Critics see this as one less competitor in the market, but if Kroger and Albertsons are prevented from merging and go out of business because they can’t combine their resources to compete on price, it will be government meddling that stifled competition. If allowed to merge, they’ll be better able to put competitive pressure on the other market leaders and that’s a win for consumers."

Jessica Melugin

Competitive Enterprise Institute, Director of Center for Technology & Innovation

If this was remotely true (which it isn't), merging weak companies together to survive is almost NEVER a winning solution. Though I have to wonder if this is some weird admission that Kroger's financials are actually abysmal...after all, they did have all those issues with store closures and strike threats...

I know she doesn't specifically add the word Fresh and just refers to Amazon, but really Fresh is their largest conduit of grocery sales outside Whole Foods. I am still trying to understand how anyone considers Amazon to be noteworthy in any way in the grocery business. They are not worth mentioning in the same paragraph as Walmart, let alone the same sentence. Whole Foods prior to the sale had what, less than 2% of the US grocery share? I do not believe that Amazon has any significant or even measurable share of grocery deliveries outside of the few areas where Fresh stores exist. And as abysmal as they perform I believe Los Angeles is their top volume delivery market which still is not a lot of products. Those first few stores did great with deliveries after opening but then Amazon made so many pricing changes and struggled so much with in stocks that I expect they lost 90% of their daily delivery volume. Some Stores used to have their entire days budget in before opening, now I can't imagine that any of them come close to achieving any kind of budget let alone a positive operating margin. I believe that if broken down to true grocery orders with perishable foods on the ticket the total grocery revenues of Amazon outside of Whole Foods would be less than a few hundred million a year. What is that, a couple days worth of sales for Kroger? I saw some UFCW propaganda that listed the complete total revenue of Amazon (merchandise including marketplace sales, AWS, advertising, etc) and tried to sell all of those dollars as groceries to make them look like a grocery store competitor selling hundreds of billions which again is way out of line with reality. If Amazon had anything close to hundreds of billions in grocery sales my little neighborhood would probably require a dozen full delivery vans every day, and so would every other in America. The reality is 7-Eleven probably has a higher overall annual grocery volume than Amazon (minus Whole Foods).

They're in trouble if they're reduced to getting testimonials from a third-string "think tank".

As for Amazon, they do have a large food business, apart from the brick and mortar. I have neighbors who buy all kinds of stuff from them, but they're probably no more representative than your neighbors--I suspect they are most popular with people who buy in bulk, people in rural areas and people in metro areas who aren't near places that have good specialty food stores. Even in a place like DC, there are few places to get a wide selection of, for example, Italian foods and even the many Asian food stores have gaps. I end up buying Thai food (along with Italian) when I'm in Ohio (surprising but true), because of the gaps in DC and Maryland and having only infrequent reasons to shop in Virginia.

[ClownLoach]

If this was remotely true (which it isn't), merging weak companies together to survive is almost NEVER a winning solution. Though I have to wonder if this is some weird admission that Kroger's financials are actually abysmal...after all, they did have all those issues with store closures and strike threats...

I know she doesn't specifically add the word Fresh and just refers to Amazon, but really Fresh is their largest conduit of grocery sales outside Whole Foods. I am still trying to understand how anyone considers Amazon to be noteworthy in any way in the grocery business. They are not worth mentioning in the same paragraph as Walmart, let alone the same sentence. Whole Foods prior to the sale had what, less than 2% of the US grocery share? I do not believe that Amazon has any significant or even measurable share of grocery deliveries outside of the few areas where Fresh stores exist. And as abysmal as they perform I believe Los Angeles is their top volume delivery market which still is not a lot of products. Those first few stores did great with deliveries after opening but then Amazon made so many pricing changes and struggled so much with in stocks that I expect they lost 90% of their daily delivery volume. Some Stores used to have their entire days budget in before opening, now I can't imagine that any of them come close to achieving any kind of budget let alone a positive operating margin. I believe that if broken down to true grocery orders with perishable foods on the ticket the total grocery revenues of Amazon outside of Whole Foods would be less than a few hundred million a year. What is that, a couple days worth of sales for Kroger? I saw some UFCW propaganda that listed the complete total revenue of Amazon (merchandise including marketplace sales, AWS, advertising, etc) and tried to sell all of those dollars as groceries to make them look like a grocery store competitor selling hundreds of billions which again is way out of line with reality. If Amazon had anything close to hundreds of billions in grocery sales my little neighborhood would probably require a dozen full delivery vans every day, and so would every other in America. The reality is 7-Eleven probably has a higher overall annual grocery volume than Amazon (minus Whole Foods).

They're in trouble if they're reduced to getting testimonials from a third-string "think tank".

As for Amazon, they do have a large food business, apart from the brick and mortar. I have neighbors who buy all kinds of stuff from them, but they're probably no more representative than your neighbors--I suspect they are most popular with people who buy in bulk, people in rural areas and people in metro areas who aren't near places that have good specialty food stores. Even in a place like DC, there are few places to get a wide selection of, for example, Italian foods and even the many Asian food stores have gaps. I end up buying Thai food (along with Italian) when I'm in Ohio (surprising but true), because of the gaps in DC and Maryland and having only infrequent reasons to shop in Virginia.

I agree that there are people who buy some regional packaged food items on Amazon, or specialty products like the aforementioned disaster bulk dry foods, just like they buy food items from many regional or fancy foods businesses that have been around forever like Sur La Table, or Williams Sonoma, or regional like Stew Leonards, or Omaha Steaks. None of these are considered to be true grocery industry transactions or "share of market" measurable in the grocery industry.

I truly believe that Amazon is not getting any meaningful amount of true "shopping Amazon to replace this week's trip to Kroger" transactions. They are not capturing meaningful share. The fact that they don't discuss in detail how their non AWS/non Ad revenue breaks down makes me believe that Amazon as a serious retailer of foods and groceries is the greatest smoke and mirrors scam of all time. Walmart at least provides enough granular data that analysts can understand how much of their revenue is actually grocery categories comparable to say Kroger or Albertsons, they pull out the Wrangler jeans and Vizio televisions from the numbers. Amazon won't provide such data. As such I firmly believe their actual market share *excluding Whole Foods* is a rounding error, maybe a single decimal point, yet the entire grocery industry and Wall Street wet their pants every time they hear that big bad Amazon is finally going to demolish their entire industry because they posted a new size of Tang powder yesterday so now it's really coming this time.

[Romr123]

exactly--I only buy groceries at Amazon when there's a pricing error or weird anomaly and as often as not they mail (!) the item I buy separately (have had this happen recently with a $1.09 bottle of Happy Belly BBQ sauce made in Peru (!); a 15 oz can of tomato sauce (.88) and an 8 oz can of tomato sauce (.53). They're neither doing meaningful volume nor making any $$$ playing at grocery as they do.

[arizonaguy]

And the gloves are coming off. Kroger has placed a supposed expert quote on their website literally saying that Kroger and Albertsons could BOTH GO OUT OF BUSINESS if not allowed to merge! Apparently the competitive juggernaut of Amazon Fresh is going to kill both companies, at least according to this expert who probably makes more money than you or I. I'm sure she firmly believes that the spinoff or sale of any store will also mortally wound the company even if they are next door to each other.

From krogeralbertsons.com

"With Walmart and Amazon as competitors, it’s understandable that traditional grocery stores need to scale up to stay competitive. Critics see this as one less competitor in the market, but if Kroger and Albertsons are prevented from merging and go out of business because they can’t combine their resources to compete on price, it will be government meddling that stifled competition. If allowed to merge, they’ll be better able to put competitive pressure on the other market leaders and that’s a win for consumers."

Jessica Melugin

Competitive Enterprise Institute, Director of Center for Technology & Innovation

Nobody is going out of business.

Kroger will be fine without the merger (in fact I think it's future is brighter without the merger). Albertsons is a mixed bag and may not exist in its current form long term but most of its stores will survive (except for some of the Safeway stores in Colorado or the DMV area as well as some Albertsons / Tom Tumb / Randalls stores in Texas).

[pseudo3d]

And the gloves are coming off. Kroger has placed a supposed expert quote on their website literally saying that Kroger and Albertsons could BOTH GO OUT OF BUSINESS if not allowed to merge! Apparently the competitive juggernaut of Amazon Fresh is going to kill both companies, at least according to this expert who probably makes more money than you or I. I'm sure she firmly believes that the spinoff or sale of any store will also mortally wound the company even if they are next door to each other.

From krogeralbertsons.com

"With Walmart and Amazon as competitors, it’s understandable that traditional grocery stores need to scale up to stay competitive. Critics see this as one less competitor in the market, but if Kroger and Albertsons are prevented from merging and go out of business because they can’t combine their resources to compete on price, it will be government meddling that stifled competition. If allowed to merge, they’ll be better able to put competitive pressure on the other market leaders and that’s a win for consumers."

Jessica Melugin

Competitive Enterprise Institute, Director of Center for Technology & Innovation

What a joke! Shamefull SHILL

To me this illustrates that the only difference between retail analysts and people on this site is that one just has the advantage of knowing certain people and one doesn't.

There are a number of bad, misinformed takes that I've seen on RetailWatchers, but I've also seen a number of bad, misinformed takes for actual "analysts" as well. After all, she's not the only one beating the drum when it came to how Amazon was going to take over the grocery industry.

[Bluelightspecial]

From krogeralbertsons.com

"With Walmart and Amazon as competitors, it’s understandable that traditional grocery stores need to scale up to stay competitive. Critics see this as one less competitor in the market, but if Kroger and Albertsons are prevented from merging and go out of business because they can’t combine their resources to compete on price, it will be government meddling that stifled competition. If allowed to merge, they’ll be better able to put competitive pressure on the other market leaders and that’s a win for consumers."

Jessica Melugin


Isn't this "analyst's" argument counter-intuitive? It's more of a point to not approve the merger. If both chains can't survive against Walmart and Amazon separately and need to merge how the heck is Spinco supposed to survive? The statement actually foreshadows another Haagen fiasco. I think they picked the wrong analyst.

[storewanderer]

From krogeralbertsons.com

"With Walmart and Amazon as competitors, it’s understandable that traditional grocery stores need to scale up to stay competitive. Critics see this as one less competitor in the market, but if Kroger and Albertsons are prevented from merging and go out of business because they can’t combine their resources to compete on price, it will be government meddling that stifled competition. If allowed to merge, they’ll be better able to put competitive pressure on the other market leaders and that’s a win for consumers."

Jessica Melugin


Isn't this "analyst's" argument counter-intuitive? It's more of a point to not approve the merger. If both chains can't survive against Walmart and Amazon separately and need to merge how the heck is Spinco supposed to survive? The statement actually foreshadows another Haagen fiasco. I think they picked the wrong analyst.

Hopefully the unions pick up on that fact. Because that is definitely a fact.

I still think whatever happens with this merger, Albertsons as we know it gets broken up again.