Judd LegumDec 5, 2022

1. Supermarket prices are up 13% in the last year and profits are at record highs

There isn't much competition to keep prices in check

Now, the nation's largest supermarket chain (@[email protected]) wants to buy the 2nd-largest (@[email protected])

What could go wrong?

https://popular.info/p/buying-the-competition

Buying the competition

Over the last year, prices for groceries are up 13%. Meanwhile, the price of food at restaurants has increased more slowly at 8.5%. Why? Restaurants are a highly-competitive industry. The grocery industry, on the other hand, has been consolidating. The total number of grocery stores in the United States "

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Show threadJudd LegumDec 5, 2022

@[email protected] @[email protected] 2. @[email protected] recorded a $3.5 billion profit in 2021 and projects an even larger haul, $4.9 billion, in 2022. Kroger itself has fueled the consolidation, acquiring a slew of competing chains, including Harris Teeter and Fred Meyer.

Now, Kroger wants to get MUCH BIGGER

Show threadJudd LegumDec 5, 2022

@[email protected] @[email protected] 3. @[email protected] recently announced an agreement to purchase @[email protected], the nation's second-largest grocery store chain, for about $25 billion. Albertsons itself acquired another major competitor, Safeway, in 2015 for $9.2 billion.

https://popular.info/p/buying-the-competition

Buying the competition

Over the last year, prices for groceries are up 13%. Meanwhile, the price of food at restaurants has increased more slowly at 8.5%. Why? Restaurants are a highly-competitive industry. The grocery industry, on the other hand, has been consolidating. The total number of grocery stores in the United States "

Popular Information
Show threadJudd LegumDec 5, 2022

4. The combined grocery behemoth that would operate nearly 5,000 stores and control 22% of the grocery market in the United States, trailing only Walmart

Kroger-Albertsons and Walmart "would control 70 percent or more of the [grocery] market in 167 cities in the United States."

Show threadJudd LegumDec 5, 2022

5. Kroger claims the merger would benefit consumers, pledging to "invest $500 million to lower prices" over four years as part of the transaction.

Sounds good but that's $125 million per year out of $200 billion+ in revenue.

Effectively nothing.

https://popular.info/p/buying-the-competition

Buying the competition

Over the last year, prices for groceries are up 13%. Meanwhile, the price of food at restaurants has increased more slowly at 8.5%. Why? Restaurants are a highly-competitive industry. The grocery industry, on the other hand, has been consolidating. The total number of grocery stores in the United States "

Popular Information
Show threadJudd LegumDec 5, 2022

6. An influential 2008 study "found that in four of the five mergers they evaluated, [grocery] prices appeared to have increased between 3 and 7 percent."

https://popular.info/p/buying-the-competition

Buying the competition

Over the last year, prices for groceries are up 13%. Meanwhile, the price of food at restaurants has increased more slowly at 8.5%. Why? Restaurants are a highly-competitive industry. The grocery industry, on the other hand, has been consolidating. The total number of grocery stores in the United States "

Popular Information
Show threadJudd LegumDec 5, 2022

7. Section 7 of the Clayton Antitrust Act, enforced by the FTC, prohibits acquisitions that substantially "lessen competition" in "any line of commerce."

@[email protected] admits the merger will lessen competition in some markets and proposes divesting a few hundred @[email protected] stores

Show threadJudd LegumDec 5, 2022

8. These divestiture schemes are used to gain approval for mergers, but seldom work. When @[email protected] bought @[email protected], it divested 168 stores to get regulatory approval.

The company that bought the stores went bankrupt in months, and Albertsons bought back a bunch of stores

Show threadJudd LegumDec 5, 2022

9. The private equity firms that own most of @[email protected] are also trying to get a $4 billion "special dividend" from the company prior to the merger.

It would make it extremely difficult for @[email protected] to continue to operate independently

https://popular.info/p/buying-the-competition

Buying the competition

Over the last year, prices for groceries are up 13%. Meanwhile, the price of food at restaurants has increased more slowly at 8.5%. Why? Restaurants are a highly-competitive industry. The grocery industry, on the other hand, has been consolidating. The total number of grocery stores in the United States "

Popular Information
Show threadJudd LegumDec 5, 2022

10. The $4 billion dividend is currently held up in court.

If it is approved, Albertsons "will be in the position of arguing to federal and state antitrust enforcers that it is preferable to allow Kroger to purchase its remaining assets because it is a failing firm."

Show threadJudd Legum

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Dec 5, 2022 at 2:27pmWeb
Show threadMadmansjwDec 5, 2022
@juddlegum in the small city I live in, we had three supermarkets: Fred Meyers, Albertsons, and a Thriftway. The Thriftway was purchased and turned into a Safeway. The Albertsons closed shortly afterwards. Now, if this Kroger merger goes through, we will have gone from 3 supermarkets to 1 in about a decade. That is a problem.
Show threadDandydanDec 5, 2022
@juddlegum now how many politicians want the merger to go through? In Colorado we have Safeway and very few Albertson's. If merger goes through Safeway plants will close. Kroger has a dairy non union, Safeway dairy union.