Kroger has promised to invest $500 million to lower prices as soon as the deal closes.
Kroger made 1.8 billion last year after expenses, so investing 500 million is a good gesture of faith but, I think that it should be required to be repeated yearly if they wish to make it as a condition of the merger, 500 million while likely wouldn’t do much prices wise, wouldn’t even be helpful if they aren’t doing it past the first year anyway
It’s such a backwards way of doing it though. If they’re going to invest that much, that means they need to make a lot of money to cover for it, so they’ll have to keep prices where they are until they get the money, then they’ll make a show of spending it to lower prices, which really means they’re paying the salaries of business analysts who will come up with ideas. Once they’ve spent $500m coming up with ideas, their obligation will be fulfilled, and they won’t have to actually act on any of those price-lowering ideas.
Instead they could just make $500m less in revenue by directly lowering prices immediately.
But then they can’t brag about all the good money they spent and will instead whine about how hard up they are, so we’ll be stuck with high prices and no relief.
Bold of them to believe they’ll stop price gouging regardless.
Very rare pro-consumer W
As a Canadian, what’s it like?
It’s like walking out of a doctor’s office without thousands of dollars in debt… I assume.
Very rare pro-consumer W
Is it though? I fear that all this will do is allow WalMart to clobber them individually then take over their market share. A&K combined are already smaller than Wally World. (13% vs 22%). It would actually be more helpful to the grocery market if they forced Walmart to divest, what their doing with this is likely to end up with Walmart taking it all.
Why not both
I actually agree. They’re targeting the smaller fish in "big business " when they should be focusing on Walmart amazon google and the like
The FTC has always been harsher about monopolization via mergers versus business finding success independently. Not saying that’s the right way to handle things, but Walmart got to where they are through competing, not merging, with other businesses.
What will the new celebrity name be?
Krogertsons?
Albertger?
Kralgertsons?
Grocer Monopoly
Walmart is already taken.
Absolutely. Walmart is there competition and always has been. I worked for Safeway back in the 2000s and they were always talking about Walmart.
Walmart will compete on some goods, but at least in my area they’re not really a grocery store. Their selection is much more limited. Some minimal poor quality produce, limited meats (nothing fresh), and few specialty items. You can go to a grocery store and get ingredients for most meals, but you can’t really do that with Walmart.
It’s a numbers game. Walmart has very low margins but immense volume. They compete but selling a product 1 cent less and driving the competition out.
Yeah, they can very much hurt the profitability of a grocery store, but they shouldn’t be counted as valid competition for anti-trust determination. If a region has a grocery store and a Walmart, the grocery store still has a monopoly on a lot of items.
Not even close. Albertsons and Kroger combined wouldn’t have as much marketshare as WalMart. (13% vs 22%).
Depends on where you live. It would be a 100% monopoly on groceries in various parts of the US where they reside. A monopoly doesn’t need to be national for it to be one.
Having a non-nationalized monopoly is stupid and bad.
But being champions of free market economics, and then being shocked pikachu when the free market does free market things is even stupider. Especially when nothing is done to reign in this free market crap.
The US wants to be socialist so bad, but can’t get their populous to vote for it because of scary words they don’t understand. Instead it’s done as a random patchwork that of course doesn’t work and corporate lobbying just makes it appear as an illusion of choice.
Next time you’re out shopping in Walmart or Kroger or whatever look at the aisle you’re in and the choices. Let’s say cereal. 200 different choices of flavour. 50 different “brands”. In reality it’s all 1 company. There may be a couple outliers but it’s all the same company selling the same sugary processed crap giving you the illusion of choice.
I wonder how much Walmart paid for that lawsuit.
Prices are already outrageous. We don’t need more of that.
Didn’t Albertson’s already merge with Safeway?
They did, yes
People are talking about combining the names. If Albertson’s and Safeway didn’t, I suspect it will be the same with Kroger.
Illusion of choice
Safe Albert. Name writes itself. Gives people false sense of security even.
Best to keep the names separate to create the illusion of choice.
This has been silently happening in every industry for years.
The Luxottica approach.
Started shopping for sunglasses about a week ago and learned about Luxottica. Turns out there’s a grand total of three brands of sunglasses that are viable for me to buy. Made in the USA but still only cost the same $300 that made in china Oakleys and ray bans cost.
I just ordered a pair of 20 dollar polarized sunglassess off amazon. Fuck the name brands and the ridiculous prices.
Yep! This reminds me of the infographic where almost every major food brand in the world is covered by 10 parent brands. https://www.good.is/Business/food-brands-owners-rp
Okay we’ll stop the merger. I just need to tell them tomorrow while I’m there to get some tortillas for lunch. Albertsons, …it’s my store! 🎶 🎵
So rare.
Block
This
Hope this goes better than when they tried to stop MS from buying up Activision Blizzard.
My main takeaway from this article is that Walmart controls nearly twice the market share of Kroger and Albertsons combined - and needs to be broken up.
Yep, that was the conclusion I came to as well.
Stop them building more stores at the very least.
There should be automatic break ups of companies that take up too much of the market share.
A hard limit would have an effect, but companies would intentionally just barely hover under the limit. Maybe if it was a chace based thing proportional to their market share. Might be worth looking into.
As an Australian who has to deal with the duopoly of our grocery stores after we let them all merge years ago, it absolutely will drive higher prices and nobody who isn’t a shareholder should want this.
They basically “collude” to fix and raise prices here and have whole teams of people who’s job it is to monitor and extract as much money out of us as possible.
In Canada we have multiple chains and they collude anyway
Australia is super concentrated, the duopoly own 70% of the grocery store market as well as others like 60% of the alcohol market. The rest is made up of convenience stores (mostly one company, IGA) and Aldi, the latter having single digit percent.
You basically sell and buy groceries though these two or you don’t exist. The CEO of one of them got so cocky during a recent interview he was forced to resign over it.
I guess we are pretty lucky over here in Germany then. We may have had some consolidation in the last few years, but there are still quite a few different grocery store companies competing.
The big ones are Aldi, Lidl, Rewe, Edeka, Netto, Penny and Norma. Quite a few of them own other supermarket chains as well, but those arent in my list.
Our supermarket market is so competitive that even companies like walmart failed to enter it (they also didnt do away with weird US customs, which probably didnt help).
Two of the major chains in my area merged a while back and they were required to close down a few of their stores to prevent having a monopoly.
So of course they closed the stores that were under-performing, which just means they closed the ones in poor neighborhoods.
They still owned or kept the leases to the buildings and sub-leased them out with the stipulation that any business taking them over could not carry groceries.
Not only are the people in those areas having to drive a lot further (or spend more time on public transit), but a lot the surrounding businesses to the stores that closed down ended up going out of business themselves.
There’s at least one nearly abandoned mini-small, shopping plaza in town due to this.
Wow never realized it but same. Clemens and Acme went under, then Superfresh. All those shopping centers are still empty or near barren and that was like well over a decade for those to go under
that seems like anti competitive behavior, I wonder if those kinds of stipulations could be made illegal. Also a commercial vacancy tax probably wouldn’t hurt.
They are legal. This is/was Walmart’s M.O. for anticompetitive behavior when one of their stores closed. Any competitors couldn’t lease, other businesses failed when they moved and didn’t have the traffic, and so you are left with both an unoccupied eye sore as well as a food / product desert…
Good idea on the vacancy and potentially changing the law to prevent anti-competitive stipulations like that.
If they won’t let others use it they should be compelled to sell it.
