Kroger says its purchase of Albertsons will drive prices down

Kroger CEO Rodney McMullen said the merger will help both brands compete with other big retailers like Walmart, Costco and Amazon.

Photo: Brandon Bell/Getty Images

The retailer Kroger assured that the purchase of the Albertsons supermarket will make product prices are lowerby improving its competition against other large supermarket stores.

This was stated by the CEO of Kroger, Rodney McMullen, before legislators in Washington, during a hearing in the antitrust subcommittee of the Senate Judiciary Committee, in which the president and CEO of Albertsons, Vivek Sankaran, was also present.

Both were cited as part of the processes that have followed after Kroger announced in mid-October your intention to buy from the retailer Albertsonswhich has been its competition for years.

For his part, McMullen assured that the purchase will allow both companies, have a better position against the competition from big box retailers like Walmart, Costco and Amazon.

However, the legislators present at the hearing expressed their doubts about the affirmation that the purchase that Kroger wants from Albertsons will actually drive prices down.

For his part, California Senator Alex Padilla said he finds it difficult for consumers to obtain better prices with fewer options where to buy their products.

“Fewer local options mean less competition to keep prices low”, Padilla told executives from both companies.

McMullen responded that consumers have changed their habit of buying all their products in one store, and added that they have now diversified and go to five or six different places, rejecting that the merger could limit competition.

“Simply I don’t see less competition in the future. It is easy for customers to turn right or left,” she assured.

Kroger’s plan to buy Albertsons was announced in mid-October last in a transaction of $20,000 million dollars.

According to the estimates of the merger, if achieved, both stores would control around 13% of the market grocery stores in the United States, according to an AP report.

But the purchase plan seems to still have a long way to go, since it must overcome the decision of the Federal Trade Commission and the Department of Justice and if it goes ahead, it is estimated that the purchase could be closed by early 2024.

The purchase plan also includes an investment of $500 million for price reductionanother $1.3 billion to upgrade Albertsons stores, and $1 billion more to raise wages for its employees.

However, the purchase also includes the closure of 375 Albertsons storeslocated in stores where both retailers compete to date.

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