by W.R. Hothershall
Since it was announced in October of 2022, the proposed Kroger-Albertsons grocery mega-merger has met stiff resistance from unions and workers who cite concerns about price hikes and mass layoffs. The merger is expected to be completed sometime during 2024, which would give the company over 15% of the entire share of the U.S. grocery market.[1] This would mean the top two grocery companies in the U.S. (Walmart & Kroger-Albertsons) dominating well over 40% of the U.S. grocery market.[2] This reality stands in stark contrast to the blatantly false rhetoric peddled by Rodney McMullen, Kroger’s chairman and CEO, who claims that “[f]undamentally, we know the grocery business will only ever become more competitive—that has proven true for the last century.”[3] In reality, over the last 30 years, the top four grocery retailers have gone from sharing roughly 12% of the market to nearly 40%: an undeniable trend towards monopolization.[4]
The press release detailing the initial agreement explains that Albertsons provides a “complementary footprint” to Kroger’s and “operates in several parts of the country with very few or no Kroger stores.”[5] This increasing monopolization of the grocery market, particularly in western states such as Washington, Colorado, and Oregon, allows companies to stifle wages while at the same time increasing prices. When job prospects become narrower with reduced capitalist competition, employers have even more leverage to keep wages stagnant.
In order to comply with antitrust laws, Albertsons will have to “carve off” anywhere from 100-350 of its stores.[6] These stores are to be owned by “SpinCo,” an “independent grocer” that will, in reality, operate as a front for Albertsons to absorb the excess capital that the company will not be permitted to keep upon its anticipated merger with Kroger. The effects of such a divestment have been experienced firsthand by Safeway workers back in 2014 during that company’s own merger with Albertsons. To earn approval for the merger from the Federal Trade Commission, Albertsons had to divest over 100 stores which were subsequently bought up by Haggen, an independent grocery retailer operating in San Diego, Ca. since 1933. Unable to absorb the market vacated by Albertsons, Haggen filed for bankruptcy in September 2015.[7][8] In 2016, Albertsons reabsorbed that market by becoming Haggen’s parent company. The current Kroger-Albertsons trajectory is on pace to repeat the Haggen fiasco, only on a grander scale affecting substantially more workers, UFCW union locals, and communities.
Opposition to the merger has come from workers and union leaders alike. The president of UFCW Local 7, which represents Wyoming’s roughly 750 grocery store workers, stated that the proposed merger is “devastating for workers and consumers alike and must be stopped.”[9] Following a ruling by Washington state’s Supreme Court in favor of the merger, UFCW Local 7 produced a statement that claims the ruling “favors a small number of ultra-wealthy shareholders over the many thousands of essential workers and millions of Americans who will be left to suffer the consequences of the outright financial looting of Albertsons.”[10] A worker in the pickup department at Fred Meyer (a Kroger-owned subsidiary) in Seattle realizes that “[t]here is no way that this is going to be good for workers.”[11] At a virtual meeting of UFCW International in October 2022, along with roughly 100 local UFCW chapters, there was reportedly unanimous opposition to the merger.[12] Several UFCW locals are considering strikes as a way of opposing the anticipated merger.[13]
Monopolization is a logical result of capitalist competition, which naturally incentivizes the boxing out of competitors and the consolidation of companies into financial cartels. The solution to such capitalist consolidation is not more capitalism (i.e. pursuing a “healthy market” or “increasing competition”), but rather centrally organizing the production and distribution of industry (in this case groceries) in accordance with the overall needs of the population. No amount of capitalist rationalization or apologetic rhetoric will be able to resolve the contradiction between those in our country who are unable to feed themselves and those companies that have more surplus products than they will ever be able to sell. A successful struggle against monopolization necessitates a struggle against that which gives birth to it: capitalism.
[1] Jean, Renée. “Wyoming Union Says Court Ruling in Kroger – Albertson’s Merger Favors ‘Ultra-Wealthy Shareholders’ – Cowboy State Daily.” https://cowboystatedaily.com/. Cowboy State Daily, January 19, 2023. https://cowboystatedaily.com/2023/01/19/fight-over-albertsons-kroger-grocery-mega-merger-moves-goes-political/.
[2] Ozbun, T. “Market Share of Leading Grocery Retailers U.S. 2017.” https://www.statista.com/. Statista, July 27, 2022. https://www.statista.com/statistics/818602/online-and-offline-grocery-market-share-of-leading-grocery-retailers-us/.
[3] “Kroger CEO Discusses Feeding the Human Spirit.” Kroger CEO Discusses Feeding the Human Spirit – The Kroger Co. The Kroger Co., January 19, 2023. https://ir.kroger.com/CorporateProfile/press-releases/press-release/2023/Kroger-CEO-Discusses-Feeding-the-Human-Spirit/default.aspx.
[4] “Retail Trends.” USDA ERS – Retail Trends, November 1, 2022. https://www.ers.usda.gov/topics/food-markets-prices/retailing-wholesaling/retail-trends.
[5] “Kroger and Albertsons Companies Announce Definitive Merger Agreement.” Albertsons Companies, Inc., October 14, 2022. https://www.albertsonscompanies.com/newsroom/press-releases/news-details/2022/Kroger-and-Albertsons-Companies-Announce-Definitive-Merger-Agreement/default.aspx.
[6] Avery, Greg. “The Kroger-Albertsons Grocery Merger Draws Union Opposition, Colorado AG Scrutiny.” Bizjournals.com. Denver Business Journal, October 18, 2022. https://www.bizjournals.com/denver/news/2022/10/17/kroger-king-soopers-safeway-merger-opposition.html.
[7] González, Ángel. “Struggling Haggen Files for Bankruptcy Protection, Parts with Southwest Co-CEO.” The Seattle Times. The Seattle Times Company, September 10, 2015. https://www.seattletimes.com/business/retail/struggling-haggen-files-for-bankruptcy-protection/.
[8] The CNN Wire. “Unions Say Kroger-Albertsons Merger, If Approved, Would Hurt Consumers and Grocery Workers.” ABC7 Los Angeles, November 30, 2022. https://abc7.com/kroger-albertsons-merger-grocery/12507931/.
[9] Avery, Greg. “The Kroger-Albertsons Grocery Merger Draws Union Opposition, Colorado AG Scrutiny.” Bizjournals.com. Denver Business Journal, October 18, 2022. https://www.bizjournals.com/denver/news/2022/10/17/kroger-king-soopers-safeway-merger-opposition.html.
[10] Jean, Renée. “Wyoming Union Says Court Ruling in Kroger – Albertson’s Merger Favors ‘Ultra-Wealthy Shareholders’ – Cowboy State Daily.” https://cowboystatedaily.com/. Cowboy State Daily, January 19, 2023. https://cowboystatedaily.com/2023/01/19/fight-over-albertsons-kroger-grocery-mega-merger-moves-goes-political/.
[11] Cavale, Siddharth, and Uday Sampath Kumar. “Kroger-Albertsons Tie-up Spurs Union Lobbying to Stop Merger.” Reuters. Thomson Reuters, October 21, 2022. https://www.reuters.com/business/retail-consumer/kroger-albertsons-tie-up-spurs-union-lobbying-stop-merger-2022-10-21/.
[12] Ibid.
[13] Ibid.