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Judd Legum Dec 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?

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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Quest Dec 5, 2022

@juddlegum
"“I’ve been robbed at gun point, I’ve been screamed at, I’ve been hit, I’ve been push, I’ve been spit at, I’ve had merchandise thrown at me, and I have had Covid at the company. ...I’ve been on food stamps and housing. I’ve had to tell our son ‘sorry we don’t have enough money.'”"

"Kroger workers’ rate of food insecurity is seven times the national average, according to a survey released Monday by the Economic Roundtable of more than 10,000 Kroger employees"

https://nypost.com/2022/01/13/kroger-workers-strike-as-employees-cant-afford-groceries-report/

8,400 Kroger workers strike as employees reportedly can't afford groceries

More than 8,000 Kroger grocery workers have gone on strike in Colorado to push for higher wages and healthcare benefits, as a new study revealed that 75 percent of employees are food insecure.

New York Post

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Quest

@juddlegum

William Rodney McMullen is the CEO of Kroger, the third-largest general retailer in the US, since January 1, 2014.

McMullen's salary in 2021 was listed at $1.34 million. The company's median employee salary that year was a bit more than $24,000. This indicates McMullen makes 5,348 percent of the median salary. This is one of the largest wage gaps in America.

His total compensation is much more. In 2020, his salary plus bonuses plus various stock options totaled $20,578,119.

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Quest Dec 5, 2022

@juddlegum

Examining the Competitive Impact of the Proposed Kroger-Albertsons Transaction

https://www.judiciary.senate.gov/meetings/examining-the-competitive-impact-of-the-proposed-kroger-albertsons-transaction

McMullen tries to sell his pitch using big numbers like investing over $1B in employees. Sounds nice until you realize it is over 4 years with a post merger employee count of ~700k. That makes it a ~$500/yr/employee investment for 4 years.

Examining the Competitive Impact of the Proposed Kroger-Albertsons Transaction | United States Senate Committee on the Judiciary

United States Senate Committee on the Judiciary