Scott Moses
Partner and Head of Grocery, Pharmacy and Restaurants Investment Banking at Solomon Partners
Progressive Grocer
“Kroger Co. plans to lower grocery prices by $1 billion if its nearly $25 billion merger with Albertsons Cos. comes to fruition… That’s double the $500 million in cuts the grocery operator, which houses chains including Ralphs and Dillons, had previously committed to implement at Albertsons locations.”
Bloomberg
Bloomberg
8/15/24
“Building on a similar track record in prior transactions, Kroger has committed to investing $500 million in price reductions for customers following the Albertsons merger. And unlike Amazon and Walmart who have increased their profit margins, Kroger has reduced its profit margins by 5% in the last 20 years, saving its customers billions.”
Julian Cañete
CEO of California Hispanic Chambers of Commerce
“The best way to enhance competition is to allow companies to compete without government . The Kroger-Albertsons merger presents an opportunity to achieve that because it will benefit consumers with lower prices and more product”
Trey Price
American Consumer Institute, Policy Analyst
“There's just simply no evidence to suggest that Kroger buying Albertsons would raise prices to people. Kroger’s a better, more aggressive, more competitive pricer than Albertsons is; it would almost unquestionably be better for the people who are buying groceries at those stores.”
Bryan Gildenberg
Retail Cities North America, Managing Director
“I looked at all the ones that [Kroger] merged, and it's absolutely true: they brought down prices. I wonder whether it will matter to the FTC, but they actually did bring down prices... That's why I looked at this thing – I was trying to poke holes in it when Rodney was on. You couldn't. It’s unassailable. You do better when they merge.”
Jim Cramer
CNBC Squawk on the Street
2/13/24
“Competition remains a driving force that historically enhances consumer benefit. The merger between Kroger and Albertsons could foster healthy competition, providing consumers with more choices and potentially driving improvements in pricing, service, and product offerings. Embracing this change aligns with the spirit of a free-market economy that has historically fueled innovation and improved consumer experiences.”
Cory Gardner
Former U.S. Senator, U.S. Representative, and Colorado State Representative
“Without this merger, low-wage, non-union national / discount grocers retailers will add to their dominance in the grocery sector and produce a more fragile and less resilient market for food. Consumers are likely to continue to see unrestricted growth in dollar stores, especially in rural and marginalized communities. Local producers could see their access to consumers and the local retail food market blocked by large, dominant players with a national footprint. Workers would suffer too — the national / discount grocers almost uniformly shun unions, pay lower wages, and offer fewer employee benefits than supermarket grocers.”
Congressmen Brian Fitzpatrick and Josh Gottheimer
“While a merger would not make Kroger and Albertsons the dominant industry players, it would allow them to compete more effectively with others, putting pressure on all major retailers to keep prices low as they fight to preserve their customer base. In fact, Kroger and Albertsons have indicated that the merger will generate $500 million in new cost savings for them that they plan to use to cut consumer prices. In addition, they plan to expand their lineup of affordable store brand products and spend $1.3 billion on improving customer service at Albertsons stores.”
Nate Scherer
American Consumer Institute, Policy Analyst
“Will the merger help consumer choice? It should. The new organization will be able to compete more effectively with the onslaught of online and warehouse competition. With C&S competing, prices and product selection should improve...”
Mark Harmsworth
Washington Policy Center, Small Business Center Director
“That’s why I believe this one… makes too much sense for the American people, which is what we really care about.”
Jim Cramer
CNBC Mad Money
7/26/23
“Never has the company’s purpose of feeding the human spirit and uplifting communities been more alive than at that King Soopers in Boulder… This is the stuff that great companies are made of, and it’s one of four key reasons that Kroger is poised to sustain its momentum as America’s top grocer, driving profitable sales growth and providing a seamless shopping experience.”
Read the Full Article Here
Progressive Grocer
5/15/23
"This deal could provide some food pricing relief for consumers, With Aldi, Lidl and other discount grocers coming in, this positions Kroger to drive the market forward."
Ken Fenyo
President of Research at Coresight
"KR’s price investments have driven its gross margin down by over 400 bps in the last 20 years, but yielded an estimated high-single digit price gap to ACI. We estimate that ACI’s capex/store has trailed KR by 30% on average over the last 15 years. We believe KR will look to bring the acquired ACI stores up to the standards of the core business over time given its historical success."
Edward Kelly
Wells Fargo
10/24/22
"… given KR’s more aggressive focus on price gaps, we would expect some level of future price investment."
Simeon Gutman
Morgan Stanley
10/14/22
"Specifically, we see opportunities for KR to help improve ACI’s business through better pricing, further improving loyalty/usage of data, and operating a bit more centralized without losing local advantages. And there are likely some ways that ACI can help KR as well, such as in fresh categories."
Scott Bender
Cleveland Research
10/14/22
"The national reach is unquestionable - it’s exciting for both growing and mature brands to scale distribution via fewer touch-points, and have the potential to get products on more shelves, in more stores, much more efficiently. As leaders in data-driven and digital business models, if Albertsons and Kroger are able to merge the best of their joint capabilities, it’ll be great for retail."
Rahul Shah
GoodPop, COO and President
"A deal if completed at a reasonable price makes strategic sense...Albertsons will strengthen Kroger’s presence west of the Mississippi River. More importantly, Albertsons will increase scale and operating leverage, which provides more tools to employ to cope with inflationary headwinds."
James Lewis
Bartlett Wealth Management, Equity Research Analyst
“Future union membership levels depend on the ability of Kroger and other supermarket chains to compete effectively. Kroger has a history of being a good corporate citizen, both benefiting the labor force and the consumer.”
Read the Full Article Here
Burt Flickinger
Strategic Resource Group, Founder
“FTC Chair Lina Khan rewrote the FTC’s longstanding merger guidelines to consider how deals would affect workers and labor-market competition. This is a radical departure from modern antitrust law, which emphasizes consumer welfare. Monopolies that are shielded from competition are usually good for workers, even if they hurt consumers.
In any case, Kroger and Albertsons also compete for workers with other grocery retailers and businesses, including restaurants and warehouses. Supermarket margins are thin, and higher labor costs are one reason Kroger and Albertsons have become less competitive against non-unionized grocers.
Supermarket workers also increasingly compete with self check-out, in case Ms. Khan hasn’t visited a store lately. If Kroger and Albertsons are blocked from merging, they will look to shave costs by using more automation. Unprofitable stores will be closed. How does this benefit workers?”
The Wall Street Journal Editorial Board
2/26/24
"If Kroger and Albertsons are stopped from combining resources and scaling up to remain competitive, all – not just some – of their employees may be looking for a new job."
Jessica Melugin
Competitive Enterprise Institute, Director of Center for Technology & Innovation
"If this merger turns out to increase the productivity of the grocery business, and the food products business in the U.S., that's going to lead to a net increase in jobs across all sectors in the U.S."
Steven Peterson
University of Idaho, Associate Clinical Professor of Economics
“Like many businesses, merging is required to stay competitive, which, in turn, ensures that stores won’t close, workers won’t lose their jobs and the business can continue to provide quality products at reasonable prices. The recent decision by the Federal Trade Commission and nine states including Nevada to file a lawsuit opposing the merger appear to thumb their noses at this concept.”
Jennifer Vinuya
Small-Business Owner and Nevada Community Leader
“Perhaps no sector of our economy is as competitive as the grocery industry.
No longer limited to traditional grocery stores, concepts like supercenters, membership clubs and online grocers have entered the field to compete for a spot in consumers’ household budgets.
The competition is fierce. Grocers need to be innovative to survive. Some, like Kroger and Albertsons, which own Fry’s and Safeway, respectively, want to team up.
A Kroger-Albertsons merger makes sense.”
Danny Seiden
President and CEO of the Arizona Chamber of Commerce & Industry
“A successful merger would make Kroger-Albertsons the nation’s third-largest grocer, with 9 percent of nationwide sales. Walmart would remain the dominant industry player. In other words, allowing the merger to proceed would create more robust competition for stores like Walmart, not less.”
Trey Price
American Consumer Institute, Policy Analyst
“[Kroger and Albertsons] don’t just compete against each other (and Walmart, and Whole Foods, and Target, and regional grocery store chains and delivery services, and …). They’re competing against fast food places, take out places and casual dining.”
Michael L. Davis
Economics Professor, Cox School of Business
“Management teams at Kroger and Albertsons contend the merger is justified in an increasingly competitive grocery landscape. That competition includes giant nonunionized chains such as Walmart, Amazon, Costco and Target along with various regional supermarket chains, dollar stores and specialized food retailers including Whole Foods, Sprouts, Natural Grocers and Trader Joe’s/Aldi.”
Read the Full Article Here
The Arizona Republic
2/14/24
“It’s hard to think of a more competitive business than groceries. Traditional supermarkets have been squeezed from all directions. Most Americans shop and buy food and household products from a variety of sources, including dollar stores, farmers markets, big-box retailers and online delivery services.
Competition has driven hundreds of supermarket stores to close in recent years. The Kroger-Albertsons merger is intended to make the two more competitive by increasing their leverage with suppliers and making their supply chains more efficient.
Democrats on the FTC disagree. They voted 3-0 to challenge the deal on the simplistic premise that it would eliminate head-to-head competition between the two retailers and lead to higher prices. They’re still living in the 1970s when there were fewer grocery options and industry consolidation was viewed by antitrust regulators as inherently bad.”
The Wall Street Journal Editorial Board
2/26/24
“It's about competing with Walmart, it’s about competing with Costco, it’s about competing with Amazon, and it’s about competing with dollar stores. And that is what is pressuring Kroger's business: not competing with Albertsons. So I think one of the core arguments they're going to use is the FTC is looking at an industry from several years ago when it was a Kroger, Albertsons, Safeway industry. It is not that and that is not how Americans shop. As a result, Kroger has been under pressure.”
Sara Eisen
CNBC Squawk on the Street
2/27/24
“The seismic shifts that have reshaped the American grocery retail landscape over the past decade must be acknowledged. The top 15 grocers, including industry behemoths Amazon, Costco and Walmart, have extended their reach far beyond traditional supermarkets. Online grocery shopping has accelerated, with only 44% of Americans now primarily purchasing groceries at physical stores, down from 63% before the onset of the pandemic. Even if the proposed Kroger-Albertsons merger progresses, it would still fall significantly short of reaching half of Costco’s market value and would represent only 8% of nationwide sales, according to the International Center for Law and Economics.”
Cory Gardner
Former U.S. Senator, U.S. Representative, and Colorado State Representative
“The Commission has historically defined the grocery retail market as being comprised of those retail stores that “enable consumers to purchase all of their weekly food and grocery requirements during a single shopping visit.” This is plainly out of touch with how consumers buy their groceries today… The antiquated historical definition does not account for online retail and delivery, and it ignores the way the COVID-19 pandemic accelerated the pace of change… Taken together, a wealth of evidence now demonstrates the assumptions and conclusions that feed into the Commission’s historical definition of the grocery market do not reflect contemporary consumer behaviors, novel competitive rivalries, or newly dominant digital technologies.”
Congressmen Brian Fitzpatrick and Josh Gottheimer
“While a merger would not make Kroger and Albertsons the dominant industry players, it would allow them to compete more effectively with others, putting pressure on all major retailers to keep prices low as they fight to preserve their customer base. In fact, Kroger and Albertsons have indicated that the merger will generate $500 million in new cost savings for them that they plan to use to cut consumer prices. In addition, they plan to expand their lineup of affordable store brand products and spend $1.3 billion on improving customer service at Albertsons stores.”
Nate Scherer
American Consumer Institute, Policy Analyst
“Kroger and Albertson’s currently occupy 10% and 6% of the U.S. grocery market share respectively. The combined entity would still be well behind Walmart, the national leader with a 29% market share. Another threat to supermarkets such as Kroger and Albertson’s is the rise of national discount grocery chains. Such chains now occupy 63% of the overall market…”
Dan Savickas
Taxpayers Protection Alliance, Director of Policy
“From a free market perspective, Kroger and Albertsons are doing what needs to be done to compete in a competitive marketplace while considering the importance of retaining jobs and maintaining customer choice. The Kroger Albertsons merger may be the final chance to level the playing field to improve competition, create more choice and provide local jobs in the community.”
Mark Harmsworth
Washington Policy Center, Small Business Center Director
“Even if the Albertsons-Kroger merger proceeds, it would account for just 9% of nationwide sales, according to the International Center for Law and Economics. But what it would do is get the attention of the big three — increasing competition with their 42% of the current market share.”
Chris Cargill
Mountain States Policy Center, Founder, President & CEO
“Theatrics aside, there is really no compelling business reason to block the merger. Yes, The Kroger Co. and Albertsons are big chains but the grocery industry itself remains fragmented. Consumers enjoy a vast array of choices, whether mega retailers Walmart Stores Inc. and Amazon Inc, regional players like H.E.B. and Schnucks, and even non-traditional players like dollar stores.”
The Street
6/26/23
“Supermarkets and smaller-format grocers accounted for about 37% of Americans’ total food spending in 1997. As of 2022 that was down to about a quarter of the total, according to the U.S. Department of Agriculture.”
Read the Full Article Here
The Wall Street Journal
7/21/23
“...the grocery industry itself remains fragmented. Consumers enjoy a vast array of choices, whether mega retailers Walmart Stores Inc. and Amazon Inc. regional players like H.E.B. and Schnucks, and even non-traditional players like dollar stores.
And what more, traditional supermarket chains have been rapidly losing ground to the rest of the pack, large and small competitors.
From 2017 to 2022, food retailers saw their share of total grocery market sales slip to 66.6% of sales from 69.7%, according to a new report by Coresight Research, while major mass merchandisers (Walmart, Target Corporation) increased their share to 19.0% of sales from 18.4%.
Major discount and dollar stores inched up from 3.1% to 3.4% of sales. Major warehouse clubs like Costco Wholesale Corporation saw the greatest jump in sales share, moving to 10.9% from 8.7%.”
Read the Full Article Here
The Street
6/26/23
“Kroger’s current business model is founded on four pillars: fresh, private brands, personalization and seamless (omnichannel). By delivering on these four pillars, the company continues to churn out profitable sales growth at a time when the grocery market is oversaturated, hypercompetitive and an exceedingly expensive industry in which to operate.”
Read the Full Article Here
Progressive Grocer
5/15/23
“I think they do have really good arguments to make, and they seem well-prepared to make them. They understand completely the environment they’re working in. They understand they’ll probably have to put together a package of divestitures to overcome concerns in some markets…It has sounded in some comments that they’re also committed not to use labor redundancies as a cost-savings mechanism, and they are putting forward an investment plan that should be attractive as well…So, they have good things going for them and they seem to be patient here too. They’re giving themselves a lot of time before their anticipated closing date – well over a year.”
William Kovacic
Former FTC Chairman
"The outrage over the payout and the deal is overblown: Albertsons and Kroger are in an industry with razor-thin margins. Combining would help them scale up and compete with well-capitalized e-commerce rivals. In any case, the chains' combined grocery market share would fall short of that of Walmart, which has stores within 10 miles of 90% of the U.S. population and is unlikely to give up its everyday-low-prices positioning."
Wall Street Journal Heard on the Street
"A national footprint may be exactly what they need to compete with Walmart in the future. They’re not thinking just a couple years ahead. They’re thinking far ahead about how you compete with the behemoths."
Thom Guidi
Foster & Motley, Investment Manager
"We think the deal makes strategic sense…KR over-indexes to the Midwest, while ACI is much more concentrated in the West and Southwest."
Steven Shemesh
RBC
10/18/22
"…we believe the combination could strengthen KR’s ability to compete with other large players and drive significant L-T earnings/cash flow accretion.
We believe a KR/ACI combination could better compete with WMT, AMZN, and TGT at a national level."
Rupesh Parikh
Oppenheimer
10/19/22
"We believe this deal would result in a more competitive national player… Albertsons Northeast locations have virtually no overlap."
Michael Montani
Evercore
10/13/22
"Merging with Albertsons will better position Kroger to compete with Walmart and even Amazon on a national scale."
Ken Fenyo
Coresight, President
"…the national food and grocery market is still pretty fragmented, with Walmart as the largest player, with about 17 percent of the market. It doesn't create a sort of behemoth that is crowding everyone out of the market.
From a broader national perspective, a combined Kroger and Albertsons does not pose any major threat to the competitive dynamics of the market."
Neil Saunders
GlobalData, Managing Director
"…allowing Kroger and Albertsons to merge will likely mean a more, not less, competitive market in the long run…Consumers deserve better when it’s a matter of putting food on the table."
Clyde Wayne Crews
Competitive Enterprise Institute, Vice President for Policy
"The market for groceries is the latest to grab headlines for what is both normal and heathy: dynamic responses to an evolving economic landscape. Recession, inflation, and new consumer patterns with online ordering and home delivery means suppliers must adapt or stagnate. How companies configure themselves is just one form of adaptation and we should cheer the experimentation and ward off political opportunism that would control or direct how private capital reacts to a changing world."
Kent Lassman
Competitive Enterprise Institute, President and CEO