🛒 Kroger-Albertsons Merger: National Impact

[pseudo3d]

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.

...and yet, despite all that and Kroger's refusal to expand the "full" format of FM, they'd blow their top if the FTC forced them to divest Fred Meyer in its entirety.

[storewanderer]

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.

...and yet, despite all that and Kroger's refusal to expand the "full" format of FM, they'd blow their top if the FTC forced them to divest Fred Meyer in its entirety.

Fred Meyer is a very important component of the larger Kroger organization. Taking away Fred Meyer would be like cutting one of the 4 tires off of a car and expecting to drive it with 3 tires.

And to that point the Kroger organization is very important to Fred Meyer as they provide the power and programs for Fred Meyer to have a strong grocery offer. Under say Loblaw, or Meijer, Fred Meyer may have a chance away from Kroger, but it would be a tough transition.

[Super S]

Fred Meyer is a very important component of the larger Kroger organization. Taking away Fred Meyer would be like cutting one of the 4 tires off of a car and expecting to drive it with 3 tires.

And to that point the Kroger organization is very important to Fred Meyer as they provide the power and programs for Fred Meyer to have a strong grocery offer. Under say Loblaw, or Meijer, Fred Meyer may have a chance away from Kroger, but it would be a tough transition.

Today's Fred Meyer though is like that "third tire" has developed a balance issue of the kind that causes a car to intermittently shake.

Kroger got some insight into general merchandise operations, however, at least at Fred Meyer, this has been scaled way back under Kroger ownership. The GM side seems to have a much lower customer count these days as well.

And, while Fred Meyer still does well in grocery, they have transitioned from more of a no-frills pricing type of operation to one where you have to jump through multiple hoops to get sale prices. Regular shelf pricing has also shot up on many items.

Finally, the Fred Meyer remodels have left a lot to be desired, where stores that once appeared upscale now have things like bare concrete with random bad patch jobs, inconsistent lighting with varying maintenance levels, and some ugly interior packages. Not to mention wider aisles which they turn around and clutter up with random displays everywhere. It doesn't help that Fred Meyer store designs are inconsistent.

The Walmart near my house just finished a big remodel, and it looks a lot nicer overall than many Fred Meyer locations these days.

I sometimes get the impression that Kroger could try to spin off the GM side of Fred Meyer to somebody else and concentrate on grocery only.

[storewanderer]

I struggle to think that I could possibly like (a well run) Wal Mart better than Fred Meyer at this point... but Wal Mart's larger general merchandise mix is awfully compelling... also their clothing program is way better than what Fred Meyer's program has dipped to.

Not sure what my opinion is.

The thing is Kroger has more general merchandise in its stores than most other grocers. A lot of that merchandising is handled by Fred Meyer. Take away Fred Meyer and who will handle that? I'm sure they could figure it out but it isn't their expertise. As of late I'm not sure how that general merchandise is selling in the Kroger stores. I see a lot after season and they seem sort of slow to discount. I think prices have escalated too high and digital coupons clearly do not move seasonal as well as straight percent offs to all.

The latest Wal Mart interior definitely looks nicer than Fred Meyer. However I think in general Fred Meyer still has nicer product presentation throughout the store.

The bigger point is Wal Mart is getting better.

[HCal]

The thing is Kroger has more general merchandise in its stores than most other grocers. A lot of that merchandising is handled by Fred Meyer. Take away Fred Meyer and who will handle that?

What do you mean by "handled by Fred Meyer"?

Are Fred Meyer buyers placing orders for toilet paper and dog food for the entire Kroger chain?

That is quite interesting...

[storewanderer]

The thing is Kroger has more general merchandise in its stores than most other grocers. A lot of that merchandising is handled by Fred Meyer. Take away Fred Meyer and who will handle that?

What do you mean by "handled by Fred Meyer"?

Are Fred Meyer buyers placing orders for toilet paper and dog food for the entire Kroger chain?

That is quite interesting...

No. Toilet paper is a "grocery" item and so is pet food in the Kroger realm.

Things like shampoo, OTC medicine, dental, are "HBA." Vitamins may be nutrition (which is now under grocery within Kroger) and may be "HBA" depending on chain.

General merchandise in a grocery store typically involves distant categories such as baby toys/cups/bibs (not baby food or diapers-those are grocery), auto supplies, shoe supplies, those nails/screws to hang stuff up with, kitchen gadgets/electrics, office supplies, batteries, seasonal, light bulbs/light fixtures, cosmetics... I'm missing some. It is a lot of small slow moving items. In a 50k square foot Kroger (basically any banner but maybe Ralphs lags behind on this too), there are probably 1.5 aisles (scattered around) worth of this "Fred Meyer" product. In a 65k square foot Smiths there are easily 3+ aisles of this stuff (scattered around again).

But buyers based at Fred Meyer are placing orders for items displayed nearby those pet/paper items you are describing- such as all of the kitchen gadgets/small kitchen electrics (crockpot, coffee maker, toaster, etc.) displayed near the paper products (often across the aisle from the paper products in recent resets they have done all over Kroger). And over on the pet food side the expanded assortment of pet toys, cages, and such are also general merchandise items handled by Fred Meyer based buyers as well.

Every shelf tag in a Kroger Store (maybe not F4L but every other division) lists what department the item belongs to in plain English. If you can go to a larger Ralphs and look around at the department names on the tags it can be quite interesting. The department names are Fred Meyer based. So if you get to a larger store with a decent hardware/light bulb aisle you'll see items from the "paint" department, "auto" department, "Sports" department, "toys" department, "electrical" department, and various other "departments."

[pseudo3d]

UFCW Local 555 has thrown its support behind the merger. Guess the right money changed hands.

https://www.oregonlive.com/business/202 ... utType=amp

[veteran+]

Kroger destroyed Fred Meyers' GM lines, especially their "hard" GM Lines.

The merchandise was HIGH quality stuff, fashionable and reasonably priced. End of season markdowns were spectacular and very popular!! I remember ordering, selling and even buying the stuff.

When they take over a Brand they erase whatever made that Brand special and valuable.

King Soopers may be extant but only because Safeway/Albertsons is so weak.

[retailfanmitchell019]

FTC, states could sue over Kroger-Albertsons $24.6 billion deal next week, Bloomberg reports
https://www.reuters.com/markets/deals/f ... 024-02-20/

“Feb 20 (Reuters) - The United States Federal Trade Commission and a group of states could sue as soon as next week to block grocer Kroger's (KR.N), opens new tab proposed $24.6 billion deal to buy smaller rival Albertsons (ACI.N), opens new tab, Bloomberg News reported on Tuesday, citing people familiar with the matter.
An agreement to not close the deal between the FTC and the two companies expires on Feb. 28, and the report said a suit to block the deal is expected before that.
Kroger, Albertsons and the FTC did not immediately respond to Reuters' requests for comment.
The companies are working to schedule meetings with the FTC to persuade the agency to not sue over their merger, Bloomberg's report said.
The states of Colorado and Washington have already sued to block the deal, which has raised anti-trust concerns over higher prices for consumers, store closures and loss of jobs.
Last month, the companies said they required more time than earlier anticipated to close the merger, as the FTC's investigation continues.”

Reporting by Juveria Tabassum; Editing by Maju Samuel
Copyright (C) Reuters

[ClownLoach]

FTC, states could sue over Kroger-Albertsons $24.6 billion deal next week, Bloomberg reports
https://www.reuters.com/markets/deals/f ... 024-02-20/

“Feb 20 (Reuters) - The United States Federal Trade Commission and a group of states could sue as soon as next week to block grocer Kroger's (KR.N), opens new tab proposed $24.6 billion deal to buy smaller rival Albertsons (ACI.N), opens new tab, Bloomberg News reported on Tuesday, citing people familiar with the matter.
An agreement to not close the deal between the FTC and the two companies expires on Feb. 28, and the report said a suit to block the deal is expected before that.
Kroger, Albertsons and the FTC did not immediately respond to Reuters' requests for comment.
The companies are working to schedule meetings with the FTC to persuade the agency to not sue over their merger, Bloomberg's report said.
The states of Colorado and Washington have already sued to block the deal, which has raised anti-trust concerns over higher prices for consumers, store closures and loss of jobs.
Last month, the companies said they required more time than earlier anticipated to close the merger, as the FTC's investigation continues.”

Reporting by Juveria Tabassum; Editing by Maju Samuel
Copyright (C) Reuters

I wonder if they try to pull a 7-Eleven and ignore the agreement then close the deal... Flagrant disregard for the law seems to be accepted by today's FTC. What exactly would/could stop them?

Realistically though I think the fact that Apollo could swallow Albertsons whole and pump them full of debt might be enough to convince Cerberus to accept them as a buyer and we will see Albertsons take whatever breakup fee they're entitled to from Kroger then go private.