Cincinnati, Ohio (February 15, 2024) – Facing scrutiny over its proposed merger with Albertsons, Kroger Co. (NYSE: KR) today emphasized its history of lowering prices after previous acquisitions. They aim to reassure consumers and regulators that the new deal will ultimately benefit shoppers with more choices and affordability.
“Our mission is to be America’s best grocer, and that means offering lower prices and wider selection,” stated Kroger Chairman and CEO Rodney McMullen. “This approach has worked for us previously, and we’re confident it will benefit Albertsons customers too.”
Past Mergers Show Price Reductions, Kroger Says:
The company cited prior mergers as evidence of its commitment to lower prices. They claim to have invested billions over the past 20 years, resulting in $5 billion in customer savings.
Specifically, Kroger highlighted:
- Price reductions after Harris Teeter and Roundy’s mergers: Over $225 million was invested in lowering prices at these acquired chains, along with store upgrades.
- Lower profit margins compared to competitors: Kroger claims to prioritize affordable groceries, accepting lower profit margins than some rivals like Amazon and Walmart.
- Planned $500 million price reduction and $1.3 billion store improvement investment for Albertsons: Kroger promises immediate price drops and store enhancements post-merger.
Increased Competition, Growth Expected:
The company believes the Albertsons merger will make them more competitive, allowing for further price reductions and improved customer experiences. They anticipate attracting new customers, boosting revenue, and enabling reinvestment in pricing, stores, and employee benefits.
Reaction and Skepticism:
While Kroger emphasizes customer benefits, the proposed merger faces challenges. Some consumer advocates and regulators express concerns about potential anti-competitive effects and limited price reduction guarantees. The Federal Trade Commission is currently reviewing the deal.
Only time will tell if the Albertsons merger follows Kroger’s claimed pattern of lower prices. However, this proactive effort highlights the growing competition and price sensitivity in the grocery industry, where customer loyalty hinges on affordability and experience.
