🛒 Kroger-Albertsons Merger: National Impact

[mjhale]

It all sounds nice, but the last 5 years (not just since the pandemic) Wall Street has been especially hostile to retailers who aren't on their agenda. They want omnichannel shoved down the customer throat even if it is unprofitable, claiming that it is how to compete with Amazon which of course fills all their portfolios and benefits from price increases at its competition. They want positive comp sales regardless of what it takes to get them. This kind of pressure contributes to situations like Albertsons being "undervalued" and then forcibly opened up to selling out, mergers etc. If they did not go along with it they would have run the risk of not being able to refinance debts, renew credit lines etc. as the banks that lend money listen to what the Wall Street vultures demand and look for compliance.

If Kroger is successful in actually increasing sales with price cuts, which maybe is possible, then this won't matter. But if sales do not increase on a comp basis then they will be crucified by Wall Street even if they are cutting prices to be honest. For example extra freight expenses being passed along are no longer occurring so cost of product is now at or below pre-pandemic level, justifying price decrease to that same pre-pandemic price point. But there are plenty of retailers out there who have basically fought off the Wall Street demons by keeping the temporary increases as permanent and lifting comps and margins, thus driving our inflation problems. The Wall Street fat cats don't have any trouble paying a little more at Kroger, there's plenty of room on their Black Card. They don't really care if they're driving households into debt, because they make money off of it.

Until corporations re-learn that they have stakeholders beyond Wall Street, such as their customers employees and communities, they are going to continue this behavior unchecked.

While not anywhere as influential as Wall Street itself, the American public almost expects an ever increasing stock market because of the reliance on 401k/403b/IRA accounts for retirement savings as opposed to the pensions of the past. I listen to several finance podcasts that when discussing retirement savings make the assumption that the markets will always go in the upward direction short of a major Geo-political event. Sure the historical performance of the stock market is generally in the upward direction. However, it seems that the discussion and assumption of stock market performance has been amplified as pensions go by the wayside. If the changes in the Wall Street mentality you advocate for, and I agree with for what that matters, were to happen, I think there would be a lot of panicked and upset Americans wondering what happened to their 401k/403b/IRA account balances not realizing the long term benefit of businesses being able to manage themselves for the good of the community instead of for "Wall Street Expectations".

[CalItalian]

Kroger, Albertsons Allegedly Colluded Against Grocery Workers' Union

The two companies struck a "no-poaching" deal to weaken workers' leverage during a strike

https://www.huffpost.com/entry/kroger-a ... f1c0ab2c2b

Albertsons/Kroger Email

[CalItalian]

Washington State trial won't start for another year

[ClownLoach]

Kroger, Albertsons Allegedly Colluded Against Grocery Workers' Union

The two companies struck a "no-poaching" deal to weaken workers' leverage during a strike

https://www.huffpost.com/entry/kroger-a ... f1c0ab2c2b

Albertsons/Kroger Email

This is what I was mentioning on another thread. It seems to me that the "bounty" offered to customers to switch pharmacies has not been as aggressively featured in the last year plus. The few Ralphs pharmacies had signage aggressively placed around the store with free offers for switched prescriptions and it was all taken down a year ago. Apparently there are still offers but they are not featuring them as aggressively. Albertsons seems to be the same. Before this merger announcement both chains had more signage and PA announcements advertising promotions if you switch pharmacies. With the Rite Aid situation you'd expect they would be running a full court press on such promotions right now too...

[storewanderer]

Nobody forced those customers to cross a picket line to get prescriptions. You can easily move prescriptions to another pharmacy.

Aa far as soliciting employees goes, given how poorly Safeway does in Colorado, they probably already had adequate staffing levels in place and didn't need any King Soopers employees to help them. It would be interesting to see if Albertsons did job advertisements to the public for temporary employees to help with increased volume or not. King Soopers obviously seeked temp help.

This is a go nowhere case.

They need to focus on the merits of why the merger will be bad. Not a very short strike that is long over and done and nobody even remembers.

[ClownLoach]

Nobody forced those customers to cross a picket line to get prescriptions. You can easily move prescriptions to another pharmacy.

Aa far as soliciting employees goes, given how poorly Safeway does in Colorado, they probably already had adequate staffing levels in place and didn't need any King Soopers employees to help them. It would be interesting to see if Albertsons did job advertisements to the public for temporary employees to help with increased volume or not. King Soopers obviously seeked temp help.

This is a go nowhere case.

They need to focus on the merits of why the merger will be bad. Not a very short strike that is long over and done and nobody even remembers.

I agree the poaching thing won't go anywhere.
Read the complaint filed by Washington however - it is very persuasive. Was surprised to read Albertsons is #1 in Washington state and Kroger is #2, every single comment on these boards has indicated the opposite (that Fred Meyer rules the state), apparently that isn't the case. If anyone would know, it's the government. A rare insight we wouldn't otherwise have. I had suspected for a while now Fred Meyer isn't the cash hog it used to be. I wonder if the Albertsons/Safeway merger was enough to propel them into first place in Washington, or if Fred Meyer/QFC was still in first and lost their lead. Really indicates Kroger doesn't know how to run stores on the West Coast.

[storewanderer]

Nobody forced those customers to cross a picket line to get prescriptions. You can easily move prescriptions to another pharmacy.

Aa far as soliciting employees goes, given how poorly Safeway does in Colorado, they probably already had adequate staffing levels in place and didn't need any King Soopers employees to help them. It would be interesting to see if Albertsons did job advertisements to the public for temporary employees to help with increased volume or not. King Soopers obviously seeked temp help.

This is a go nowhere case.

They need to focus on the merits of why the merger will be bad. Not a very short strike that is long over and done and nobody even remembers.

I agree the poaching thing won't go anywhere.
Read the complaint filed by Washington however - it is very persuasive. Was surprised to read Albertsons is #1 in Washington state and Kroger is #2, every single comment on these boards has indicated the opposite (that Fred Meyer rules the state), apparently that isn't the case. If anyone would know, it's the government. A rare insight we wouldn't otherwise have. I had suspected for a while now Fred Meyer isn't the cash hog it used to be. I wonder if the Albertsons/Safeway merger was enough to propel them into first place in Washington, or if Fred Meyer/QFC was still in first and lost their lead. Really indicates Kroger doesn't know how to run stores on the West Coast.

OR is where Kroger may be in a leadership position and probably only around Portland. Not WA.
Safeway has around 200 stores in WA.
Kroger has closed quite a few QFC Stores over the years and hasn't opened many new ones.
QFC has 55 stores in WA and Fred Meyer has 59 stores. QFCs are generally small low-medium volume operations. I have seen instances where a nicer/larger QFC outperforms a nearby Safeway but it still isn't saying much. And I've seen more instances where a Safeway outperforms a nearby QFC, also usually the Safeway is twice as big...

So let's just assume the average QFC does 1/2 the volume of the average WA Safeway. So that is like the 55 QFC=27 Safeways.
And assume the average Fred Meyer does 2 times the food/drug volume of the average WA Safeway. So that is like the 59 Fred Meyer=118 Safeways.
So of course Safeway is in first place... by far... when they have close to double the store count. Plus half of Kroger's store count is small/low performing QFCs.

And suddenly the divest 104 stores knowing every divest is either a QFC or a Safeway/Albertsons...

[pseudo3d]

Nobody forced those customers to cross a picket line to get prescriptions. You can easily move prescriptions to another pharmacy.

Aa far as soliciting employees goes, given how poorly Safeway does in Colorado, they probably already had adequate staffing levels in place and didn't need any King Soopers employees to help them. It would be interesting to see if Albertsons did job advertisements to the public for temporary employees to help with increased volume or not. King Soopers obviously seeked temp help.

This is a go nowhere case.

They need to focus on the merits of why the merger will be bad. Not a very short strike that is long over and done and nobody even remembers.

I agree the poaching thing won't go anywhere.
Read the complaint filed by Washington however - it is very persuasive. Was surprised to read Albertsons is #1 in Washington state and Kroger is #2, every single comment on these boards has indicated the opposite (that Fred Meyer rules the state), apparently that isn't the case. If anyone would know, it's the government. A rare insight we wouldn't otherwise have. I had suspected for a while now Fred Meyer isn't the cash hog it used to be. I wonder if the Albertsons/Safeway merger was enough to propel them into first place in Washington, or if Fred Meyer/QFC was still in first and lost their lead. Really indicates Kroger doesn't know how to run stores on the West Coast.

I seem to remember reading in the last ten years that Fred Meyer's merchandise mix has been changed in the last ten years to resemble more of the Marketplace stores.

[retailfanmitchell019]

I wonder if the Albertsons/Safeway merger was enough to propel them into first place in Washington, or if Fred Meyer/QFC was still in first and lost their lead. Really indicates Kroger doesn't know how to run stores on the West Coast.

I’d be surprised if the Albertsons/Safeway merger was enough to give ACI first place in Washington, considering the amount of damage Supervalu did to Albertsons up there. Maybe the Albertsons banner held on to more volume than we’d expect up there.
Albertsons banner is now down to 16 stores in WA. 20 years ago, it was 84 stores.

[Super S]

I seem to remember reading in the last ten years that Fred Meyer's merchandise mix has been changed in the last ten years to resemble more of the Marketplace stores.

They have definitely scaled back on the GM side. Departments like Sporting Goods and Automotive are smaller, as is hardware. Paint mixing is gone. And Big & Tall is pretty much gone with nothing above a 2XL in Men's. As recently as the mid 1990s Fred Meyer even had lumber and building materials, but this started to get scaled back when Home Depot arrived in the Northwest.

Fred Meyer location coverage is also spotty. They don't have stores in some areas where Walmart is present, such as Chehalis (where they have a DC) as well as towns like Aberdeen, Yelm, and a few other small towns. And, in Oregon, virtually no presence in the Eastern part of the state in towns like Pendleton, LaGrande, Hermiston, and Ontario, all of which have a Walmart presence (and Pendleton and Ontario once had Kmart as well) even though Fred Meyer has stores in Idaho, with Smith's still also having a small presence.