Kroger to merge with Albertsons?

[storewanderer]

If Albertsons has their own bread plant, why don't they have O Organics bread?

Not sure. Safeway has had bread plants for years. All CA/OR/WA is served by the bread plants for private label bread. Also why is there no O Organics yogurt? Safeway has dairy plants that make a lot of dairy items. There is at least one bread plant in NorCal and one bread plant in I think OR. There used to be more bread plants (there was one in WA, Albertsons sold it as I recall; also SoCal had one and maybe still does).

[storewanderer]

I know Albertsafeway’s meat quality is better-at least in Arizona-than at Fry’s. Especially ground beef. Although Fry’s has more of a meat selection.

That is interesting. I find Safeway NorCal's ground beef to be terrible quality. Also you should never purchase "ground beef." You should only purchase items labeled specifically as "Ground Chuck, Ground Round, Ground Sirloin." This is due to the pink slime thing. The meat producers can (and may or may not) add pink slime to "Ground Beef" but if the product is labeled as "Ground Chuck, Ground Round, or Ground Sirloin" they cannot add pink slime to it.

With Kroger, the ground beef to purchase needs to be the Private Selection Ground Round or Private Selection Ground Sirloin, preferably from the service meat counter. At Smiths these items are 4.99/lb for the Round and 5.99/lb for the Sirloin. I think those prices are significantly lower than surrounding Kroger divisions.

The only stores that I see locally who sell ground beef labeled explicitly as "Ground Chuck, Ground Round, or Ground Sirloin" are Kroger and Wal Mart and sometimes Save Mart, and you have to look for it, because the majority of what they sell is also labeled generically as "Ground Beef."

Safeway NorCal wants 7.99/lb for 80/20 Ground "Beef," though this Friday, if you add the digital offer and buy a 6+ pound pack it is 3 pounds for $5.

[HCal]

Who are the politicians in favor (other than ones they hired to promote their merger; I don't count those)? I am seeing bi-partisan opposition to this merger at the state levels.

I am disappointed there has been no opposition raised by Nevada especially our Attorney General. Not clear what the issue there is. The NV AG is a son of an old career hourly Safeway employee who lost his job when they tanked in Texas. Due to his lack of opposition to this merger, I do not regret how I voted in that race last November, I had a feeling he wouldn't do anything before the election, but was hoping maybe after the election he would.

I think it's an unspoken rule that the GOP is pro-business and will therefore not oppose mergers. The opposition I have seen so far seems like lip service. Tom Cotton (senator from Arkansas) made a comment at the hearing implying that he was only against the merger because Kroger had a gay pride uniform for employees.

Nevada is one of the states reviewing the merger, so it's hard to know where they stand. Some people are more vocal than others. Some AG's like to go to the news media and build public support (especially if they are up for re-election soon) while others prefer to work behind the scenes.

[storewanderer]

I think it's an unspoken rule that the GOP is pro-business and will therefore not oppose mergers. The opposition I have seen so far seems like lip service. Tom Cotton (senator from Arkansas) made a comment at the hearing implying that he was only against the merger because Kroger had a gay pride uniform for employees.

Nevada is one of the states reviewing the merger, so it's hard to know where they stand. Some people are more vocal than others. Some AG's like to go to the news media and build public support (especially if they are up for re-election soon) while others prefer to work behind the scenes.

Well look at what happened with Chase and First Republic Bank. Chase now will have what, 16% marketshare in the bank sector in the US? Elizabeth Warren and some others that you'd expect came out against the deal but it did not matter. The more powerful Democrats in control at the national level were up against a wall in an emergency situation requiring a "rush" decision, and allowed it to go through and nobody said a word. No time for anyone to say a word.

So I don't really buy in the current era that either political party is for or against mergers at a national level. My general impression is both parties at the national level are for mergers that will make very big corporations even bigger.

15 years ago I would have agreed with your statement about GOP/pro-business/not oppose mergers and had no further comment. At this point in time I do agree with your statement but I have the further comment that at the end of the day when it comes to the very biggest corporations trying to do mergers, I don't think the present day Democrats are any different and they support these mergers full stop. Neither political party is looking out for the consumer and what is best for the consumer (and certainly not the employee). It is all about the very wealthy donors, and what is best for them.

The only possible opposition from this merger is at the state level and union level. There is a slight hope with the FTC also. It isn't going to come from politicians at the national level of either party.

[HCal]

Well look at what happened with Chase and First Republic Bank. Chase now will have what, 16% marketshare in the bank sector in the US? Elizabeth Warren and some others that you'd expect came out against the deal but it did not matter. The more powerful Democrats in control at the national level were up against a wall in an emergency situation requiring a "rush" decision, and allowed it to go through and nobody said a word. No time for anyone to say a word.

Sales of failed banks are not subject to antitrust review. The regulator (in the case of First Republic, that would be the California banking department) closes the bank and appoints the FDIC receiver, and the FDIC is required to sell it to the highest bidder in order to minimize the cost to its insurance fund. The FTC and state governments have no say over it. That is why no one said a word, because short of getting Congress to change the law, there wasn't anything that anyone could do. It's a completely different situation from a retail merger that can be negotiated with the parties.

[rwsandiego]

Well look at what happened with Chase and First Republic Bank. Chase now will have what, 16% marketshare in the bank sector in the US? Elizabeth Warren and some others that you'd expect came out against the deal but it did not matter. The more powerful Democrats in control at the national level were up against a wall in an emergency situation requiring a "rush" decision, and allowed it to go through and nobody said a word. No time for anyone to say a word.

Sales of failed banks are not subject to antitrust review. The regulator (in the case of First Republic, that would be the California banking department) closes the bank and appoints the FDIC receiver, and the FDIC is required to sell it to the highest bidder in order to minimize the cost to its insurance fund. The FTC and state governments have no say over it. That is why no one said a word, because short of getting Congress to change the law, there wasn't anything that anyone could do. It's a completely different situation from a retail merger that can be negotiated with the parties.

You are right. Chase would not have been allowed to acquire First Republic had it not failed. Chase was the only bank willing to acquire First Republic as a whole. The other bidders wanted pieces and parts.

Given First Republic's client base (wealthy individuals who carry very large balances) the ordinary consumer will feel zero effects from this merger. Relating it to retail, if Kohl's and JCPenney merged one could argue that consumers could feel adverse effects related to higher prices and fewer choices. If Neiman Marcus and Saks merged, consumers would feel nothing.

[storewanderer]

Sales of failed banks are not subject to antitrust review. The regulator (in the case of First Republic, that would be the California banking department) closes the bank and appoints the FDIC receiver, and the FDIC is required to sell it to the highest bidder in order to minimize the cost to its insurance fund. The FTC and state governments have no say over it. That is why no one said a word, because short of getting Congress to change the law, there wasn't anything that anyone could do. It's a completely different situation from a retail merger that can be negotiated with the parties.

They have been negotiating for weeks. Recall when 3 larger banks, Chase being one, infused First Republic with $30 billion to try to keep it afloat a number of weeks ago (trying to avoid the scenario that just happened this week- really I think that was a backroom maneuver to keep First Republic from going down at that moment and keep it afloat a while longer to help stabilize the system, but it was decided behind closed doors weeks ago that First Republic was being seized and going to Chase). This was a maneuver to allow what happened to happen without going through any type of comment period where the public at large could provide feedback.

[pseudo3d]

Who are the politicians in favor (other than ones they hired to promote their merger; I don't count those)? I am seeing bi-partisan opposition to this merger at the state levels.

I am disappointed there has been no opposition raised by Nevada especially our Attorney General. Not clear what the issue there is. The NV AG is a son of an old career hourly Safeway employee who lost his job when they tanked in Texas. Due to his lack of opposition to this merger, I do not regret how I voted in that race last November, I had a feeling he wouldn't do anything before the election, but was hoping maybe after the election he would.

I think it's an unspoken rule that the GOP is pro-business and will therefore not oppose mergers. The opposition I have seen so far seems like lip service. Tom Cotton (senator from Arkansas) made a comment at the hearing implying that he was only against the merger because Kroger had a gay pride uniform for employees.

The whole "an unspoken rule that the GOP is pro-business" view is pretty outdated, but since 2008 the relation between political parties and businesses has seen enormous changes and that's just not true anymore.

Besides, the entirety of the overlap stores are in blue states or blue areas.

[retailfanmitchell019]

Kroger will do just fine with Jewel. It is just their type of store size/format. I expect they will integrate it fairly quickly on systems/private label. Jewel is really quite similar to a Kroger, just slightly better looking stores and somewhat larger center store mix. From a price and store condition perspective they are pretty similar (somewhat lower pricing, and not always perfect store conditions). Harris Teeter is a bit different of a thing; prices are a lot higher, stores are a lot flashier looking...

I don't think they will screw up the mix too much or too quickly. Kroger can support a large, full drug/non food mix even better than the Jewel offer, so that will be fine. I also think the Kroger private label programs will do very well at Jewel and be quite popular. I say this because they are well priced and well assorted. Also I don't expect Kroger to just cut a ton of regional/name brand items overnight. Kroger will to an extent let the customer decide (this is why there is not as much variety of Kroger private label at Ralphs, QFC, or Fred Meyer as in other divisions... it doesn't sell as well...).

Safeway's strategy in the Dominick's days of discontinuing the regional/name brand items then replacing with a Safeway brand item that sold at a price just as high as the name brand items was like a double punch in the face to the customer. First they couldn't get what they wanted, second with the alternative they were being ripped off.

Old Albertsons ran Jewel semi-autonomous. Jewel developed their own interior (known as the "Marketplace" interior) which Albertsons used in new builds and remodels for every division (except for Denver and Shaw's, I think).
Jewel never used Albertsons-style advertising until 2003, when Patricia Heaton did ads for Jewel (Helping Make Your Life Easier campaign). There must've been some backlash in Chicago, as Jewel reverted back to their "Fresh to your family" slogan in early 2006 (Albertsons stopped using Patricia Heaton in ads in early 2007, when they went to the "Crazy About Food" slogan). Jewel continued that "Fresh to your family" slogan through the SuperValu years, and used it in ads until the "Sincerely, Food" campaign.
Jewel kept their Jewel brand on the shelves, and the President's Choice brand from Loblaw, until SuperValu Essential Everyday-ed nearly everything. The only "Albertsons" brand products sold at Jewel were "Sav-on Osco by Albertsons" (non-food brand, split into Equaline and HomeLife), and "Baby Basics by Albertson's" (baby products, later shortened to Baby Basics).
Jewel still uses their name in lieu of Value Corner on milk, bread, and eggs.

[storewanderer]

Old Albertsons ran Jewel semi-autonomous. Jewel developed their own interior (known as the "Marketplace" interior) which Albertsons used in new builds and remodels for every division (except for Denver and Shaw's, I think).
Jewel never used Albertsons-style advertising until 2003, when Patricia Heaton did ads for Jewel (Helping Make Your Life Easier campaign). There must've been some backlash in Chicago, as Jewel reverted back to their "Fresh to your family" slogan in early 2006 (Albertsons stopped using Patricia Heaton in ads in early 2007, when they went to the "Crazy About Food" slogan). Jewel continued that "Fresh to your family" slogan through the SuperValu years, and used it in ads until the "Sincerely, Food" campaign.
Jewel kept their Jewel brand on the shelves, and the President's Choice brand from Loblaw, until SuperValu Essential Everyday-ed nearly everything. The only "Albertsons" brand products sold at Jewel were "Sav-on Osco by Albertsons" (non-food brand, split into Equaline and HomeLife), and "Baby Basics by Albertson's" (baby products, later shortened to Baby Basics).
Jewel still uses their name in lieu of Value Corner on milk, bread, and eggs.

That Jewel Marketplace Interior is actually from the late 90's. ASC was building several Lucky Stores throughout California in 1999 and all got that interior.

Jewel and Acme had private label handled in an identical manner by Albertsons. The only stuff that ever said Albertsons was the drug stuff.

Larry too late in the game recognized Jewel was the most productive unit of stores he had in the fleet and started trying to run the rest of Albertsons more like Jewel. That is why they did the combo stores in Reno, Phoenix, El Paso, and Omaha. Also some of the last Albertsons units opened before Supervalu had the Jewel interior again (though a cheaper version of it than the late 90's one). Albertsons also started trying to run some of its fresh departments more like Jewel. But it was all much too late.

ASC had excellent assets in Jewel and Osco/Sav-On, a very good asset in Lucky, and a poor asset in Acme. Albertsons of course wanted to destroy everything and turn it into Albertsons which at the time I'd call a good-ish/marginal asset. Lucky for Jewel, Albertsons hurt so bad from what it did to Lucky, that it was unable to destroy Jewel- but they planned to- Gary wanted Albertsons to be a nationwide supermarket banner whether the customer wanted it or not. And maybe had Albertsons changed the name to Albertsons but kept the stores just like Lucky it would have worked for them...

So now instead we can have Kroger as that nationwide supermarket chain and there is so little competition now compared to 1999 that many customers will just have to accept that (or go to Wal Mart).