Idaho Business Review’s Post

# Only put off until tomorrow what you are willing to die having left undone ## Kroger CEO Defends $25 Billion Merger as Costs Rise, FTC Pushes Back: Rising Grocery Prices Attributed to Increased Supplier Costs In a recent development, Kroger CEO Rodney McMullen has come forward to defend the $25 billion merger with Albertsons. He argues that the rising grocery prices can be attributed to factors such as increased supplier costs, fuel expenses, and credit card fees. McMullen emphasizes that these cost pressures are driving prices higher, rather than any intended price hikes resulting from the merger. The merger between Kroger and Albertsons has faced some opposition from the Federal Trade Commission \(FTC\), which is pushing back against the deal. However, McMullen remains confident in the strategic benefits of the merger and believes it will ultimately bring value to both companies and their customers. As an experienced Investment Advisor, I urge you to pay attention to this news and consider the potential impact on your investments. Rising grocery prices could have broader implications for the economy and consumer spending habits. It is crucial to stay informed and assess any potential investment opportunities or risks that may arise from this situation. Don't let the Fear of Missing Out \(FOMO\) cloud your judgment. Act now to ensure your investments align with your financial goals and long-term wealth accumulation plans. Remember, investing in your Health Savings Account \(HSA\) can provide significant tax advantages and help secure a healthy financial future for you and your family. #hsa #investing #healthcare #health #family #wellness 💪📈💰🌿

My recent experience of working for a regional grocer in the Midwest, suggested that today's grocers are looking for additional avenues of growth and efficiencies, particularly in the high inflationary as well as price competitive market. Kroger-Albertson becoming the second largest in this space, only behind Walmart through their merger, would make it tighter for national and regional players alike. My colleagues at Alvarez & Marsal Consumer and Retail Group - David Ritter, Jeremy Levine, Conor Gaffney and Bruno Breckenfeld have penned down their thoughts on what to expect from this merger. Give it a read to know about the specifics!

As the proposed merger between Kroger and Albertsons faces scrutiny from the Federal Trade Commission, it brings to light the complexities of consolidation within the retail food industry. While Kroger and Albertsons argue that combining forces would bolster their competitive edge against industry giants like Walmart and Costco, concerns raised by the FTC about potential adverse effects on consumer prices and worker wages cannot be overlooked. Proponents of the merger highlight the potential for increased efficiency, economies of scale, and enhanced bargaining power with suppliers, which could theoretically translate into lower prices for consumers. However, skeptics argue that reduced competition resulting from such a merger could lead to market monopolization, giving the merged entity unchecked power to dictate prices and working conditions. It's crucial to consider not only short-term benefits but also the long-term implications for consumers, workers, and the overall market dynamics. What are your thoughts on this proposed merger? Do you believe it would ultimately benefit consumers and workers, or do you share concerns about its potential negative impacts? #albertsons #kroger #mergersandacquisitions #customer #associates

Kroger's Q2 results 📊 showed flat sales of $33.9 billion, but the grocer bounced back to profitability after a loss in 2023 due to an opioid settlement. 🏪 With same-store sales growth slightly improving and an uptick in e-commerce sales by 11%, Kroger remains optimistic 💪 despite cautious consumer spending. The company's merger with Albertsons is facing scrutiny from the FTC, but CEO Rodney McMullen expressed confidence in closing the deal, citing long-term benefits for customers and associates. 🤝💼 Read More: https://lnkd.in/gqpSjarT #Kroger #RetailSales #AlbertsonsMerger #GroceryMarket #EcommerceGrowth #PrivateLabel #OpioidSettlement #RetailIndustry #FTC #MergersAndAcquisitions

Going into the weekend, I want to share this article written by my colleagues at A&M CRG - as the retail world becomes more and more concentrated at the top, David Ritter & Jeremy Levine (among others) have highlighted some very tangible ways that regional grocers, and by extension CPGs and other consumer-facing companies, can continue to be successful in a post Kroger-Albertsons merger environment. Worth a quick read for anyone in the consumer/retail industry!

Kroger sees the combination with Albertsons — the largest-ever US conventional supermarket merger deal — as a way to build the scale to better compete with mass chains like Walmart, Costco, Target and Dollar General as well as discount grocers and online retailers like Aldi and Amazon, which have taken significant grocery retail market share from traditional supermarkets over the past few decades. Learn more: https://ow.ly/EfNL50TnoER #GroceryIndustry #FoodRetail #FoodIndustry

As Kroger and Albertsons continue to press the case that they should be allowed to merge, the time the grocers have invested in trying to push through the controversial deal has emerged as a key challenge for the companies, industry analysts said. In particular, the nearly two years Kroger has devoted to the merger has distracted it during a critical period when the grocery market has evolved significantly, raising the stakes for the supermarket operator even as it faces the distinct possibility that it will not be able to complete the nearly $25 billion transaction, one business strategy expert said. Thanks to David Halliday, Scott Mushkin, Arun Sundaram, CPA, CFA, Jeffery Cross, and Arindam Kar for sharing your insights with me! #grocery #retail #supermarkets https://lnkd.in/eumQM4AD

The FTC’s decision to try and block the merger of Kroger and Albertsons comes as no surprise. The agency has become far more muscular in opposing large mergers, and one of this scale was always unlikely to escape its opposition.   As usual, the FTC has taken a very theoretical and ideological position that centers around its general ‘big is bad’ thesis.   Some of the arguments it advances, including that prices would rise should the merger go ahead, are not based on solid evidence but on a loose theory that more market power would give Kroger and Albertsons carte blanche to increase prices.   This perspective is largely false as current market dynamics show. Walmart, which is the largest food retailer in the US, is extremely focused on price and acts as a general check on pricing. It is joined in this task by others including the dollar stores, discount chains like Aldi, and a range of regional banners. Amazon too, which is growing its share via selling things like household essentials and grocery staples online, is another safety valve in the grocery system. With this degree of competition, a merged Kroger and Albertsons poses few threats.   Admittedly, there are some local markets where competition would be affected; but these could have been dealt with via store disposals as is the usual practice. From a broader national perspective, a combined Kroger and Albertsons does not pose any major threat to the competitive dynamics of the market. Indeed, it can be argued that scale is necessary to deliver the very low prices and investments that consumers demand. Grocery is a very low-margin business where volume prerequisite for delivering what the market wants.   An ultimate denial of the merger would leave both Kroger and Albertsons - but especially the former - in a tough spot. Both are finding growth and profits under increasing pressure and the merger was a way of extracting economies of scale to deliver better numbers for investors. Without this they will need to double down their efforts to increase internal efficiencies, and look to expand through more organic growth, or via smaller acquisitions. As such, both companies will fight this very strongly in court. Thanks to NBC News for including my comments in the article linked in the comments.   #retail #retailnews #grocery #regulation

Commenting on this very possibility, in October 2022, RetailStat wrote: "However, aside from the regulatory concerns, we see a potential downside in that Kroger will need to devote a significant amount of time to integrate the Albertsons business into its own. The question then becomes will this detract from what up to now has been Kroger’s laser focus on its digital initiatives. While the potential for long term success is there, this deal is hardly "plug and play." We believe Kroger will need to devote significant amounts of human capital to not only get the deal done, but also to successfully integrate the two businesses."

Dive Brief: -Kroger and Albertsons have pushed back the timeline for their proposed merger and now expect the deal to close during the first half of Kroger’s next fiscal year, which begins Feb. 4. -The supermarket chains are also facing a lawsuit filed Monday by Washington state Attorney General Bob Ferguson that seeks to prevent the grocers from combining. -Kroger and Albertsons are pressing ahead with their controversial plan to combine amid unrelenting pressure from critics who claim their merger would sharply reduce competition in the grocery industry. #foodmanufacturing #foodandbeverageindustry