Washington State Attorney General Bob Ferguson sued in local court to block the proposed Kroger-Albertsons grocery merger, stating that it would significantly limit shopping options and create a virtual monopoly in the state.
The merger of Washington's two largest supermarket companies could lead to higher prices and fewer consumer choices. A plan by Kroger (Fred Meyer, QFC) and Albertsons (Albertsons, Safeway, Haggen) to mitigate the merger's impacts by selling over 100 stores in Washington is deemed inadequate by Ferguson, as it would still leave Kroger with a near-monopoly in many markets.
Together, K-A would control 13% of the nation's grocers, second to Walmart’s 22%, with Amazon coming in at 3%. The lawsuit seeks a permanent injunction to block the merger nationwide.
The joint Kroger-Albertsons response is to remain competitive against Walmart and Amazon (Whole Foods, Amazon Fresh, online); they must combine their footprint and buying power. K-A has grown significantly over the years through mergers.
Their 2022 promise was
- $1B administrative savings.
- $500 million into price reductions.
- $1.3 billion updating Albertsons stores.
- $1 billion on higher employee wages.
The industry has continued to consolidate, and mergers are inevitable. Rather than another messy, should they or shouldn’t they court fight spending taxpayer money, my $.02— bring K-A to the negotiating table. Some observations:
- Draft and create a plan that lays out how consolidation will work. Involve local communities, unions, and regulators.
- Commit to retail store footprints in food deserts. Work with city planners and civic organizations.
- Invest some of that $1.3B to make the grocers destinations and form partnerships.
- Invest some of that $1B in employee education and upskilling.
Food for thought, and I’ll agree to waive my fee to work with all parties.
What do you think? Fight the future, stop the merger, or bring everyone to the table?
Finally, in a bit of irony, the AG’s complaint is hosted on AWS.
