Huzzah! Why Advocates Say Blocking Kroger-Albertsons Merger Is Good for Shoppers, Workers

Looks like the feds are keeping the little guy in mind when it comes to stupid-high grocery prices.

Earlier this week, the Federal Trade Commission (FTC) filed a lawsuit that aims to prevent a would-be merger between supermarket foes Kroger and Albertsons. The move is good news for North Texans, according to labor unions and consumer advocacy groups alike.

Kroger is seeking to acquire Albertsons, its competitor, for a steep $24.6 billion. But watchdogs argue that if the plan were to advance, shoppers in Dallas and elsewhere in the U.S. could soon see heftier price tags and lighter wallets.

“A merger would leave more grocery shoppers with fewer choices,” said Lisa Gilbert, executive vice president of the nonprofit consumer advocacy organization Public Citizen. “So what this means for regular people is that we can continue to benefit from competition: receive lower prices and better services than what a merged company would probably deliver to us.”

Even though inflation has technically trended down a bit in recent weeks, the proletariat continues the struggle to get by. Still, penny-pinchers can find at least a smidgen of relief now that steps have been taken to block a potential supermarket monopoly.

If you live in North Texas, you likely know that the blue-and-white Kroger signs are virtually ubiquitous.

Some 2,750 grocery retail stores under The Kroger Co. umbrella operate throughout the U.S., and Texas is home to 218 such stores, according to the company’s website. The Dallas Morning News reported in September that the proposed merger would result in the sale of 26 Albertsons-banner stores in the Lone Star State.

“Stopping Kroger and Albertsons from merging is necessary to avoid soaring food prices that would suffocate the working class.” – Public Citizen

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A little friendly competition between Kroger and Albertsons translates to better services and lower prices for the rest of us, Gilbert said. The stores are more incentivized to devise deals and brainstorm ways to draw in more customers.

“And if they don’t have to do that, they won’t,” Gilbert said, “so that just means the prices go up for you and me.”

In a post on X, Public Citizen shared contrasting infographics illustrating how a merger would look. The U.S. would go from having some grocery variation, such as Albertsons-owned stores in states like Montana, to effectively being completely Kroger-dominated.

“Stopping Kroger and Albertsons from merging is necessary to avoid soaring food prices that would suffocate the working class,” the organization wrote.

Stopping Kroger and Albertsons from merging is necessary to avoid soaring food prices that would suffocate the working class. https://t.co/jeuK0bynNf pic.twitter.com/xgDa8myFhI

— Public Citizen (@Public_Citizen) February 26, 2024

If you’ve thought that food has gotten more expensive in recent months, you’re definitely not making it up. From January 2023 to January 2024, grocery store and restaurant prices spiked 2.6%, according to the personal finance company NerdWallet. That same 12-month period the year prior saw an even more pronounced increase of 10.1%.

Broadening the scope just a tad: In the two-year timeframe following January 2021, grocery costs for home cooks skyrocketed 19.6%, The New York Times reported this week.

Gilbert explained that when two companies team up as one, fewer workers may be needed. Layoffs could then ensue.

Unions in Texas and other states nationwide are raising a fist in solidarity with the FTC.

Gene Lantz, president of the Dallas AFL-CIO, told the Observer via email that unions aren’t inherently anti-merger or against progress. That said, corporate managers time and again “carry out secret business dealings” that invariably harm employees.

The proposed merger would no doubt result in the layoffs of solid, service-minded workers, Lantz said. On top of that, stores would shutter in areas where they’re most essential.

“Corporations do not care about their customers nor their employees; consequently, they cannot be trusted to act on their own,” he continued. “The Albertsons-Kroger merger, as requested by corporate heads, must be stopped. America’s policies must not be guided solely by corporate greed.”

Other labor groups nationwide celebrated after news broke of the merger’s apparent derailment. The union for grocery workers issued a statement this week about having “loudly and soundly opposed” the proposal from the start.

“[T]he megamerger would have resulted in lost jobs, closed stores, food deserts, and higher prices with reduced food choices — all of this would have been destructive for workers, consumers, and entire communities,” United Food and Commercial Workers local unions said in a joint statement. “Importantly, the FTC decision recognizes the threat that the merger would have caused goes beyond consumers and calls out that it would also have damaged essential grocery store workers’ wages, benefits and working conditions.”

Consumers and grocery store employees aren’t the only ones emitting a collective sigh of relief. A Kroger-Albertsons merger could inhibit farmers and ranchers from getting fair prices for their crops and livestock as well, Gilbert said.

Public Citizen applauds the Federal Trade Commission for objecting to this food-giant marriage, she added: “This is exactly what they are intended to do: to reject mergers at moments when it would hurt regular people.”