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Merging Futures: Kroger-Albertsons Deal and Its Impact on Oregon’s Grocery Landscape

Written by Kevin Mannix on Dec. 14th, 2023
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With the holiday shopping season upon us, we are reminded of how important access to local stores and products right here in our community is to our everyday lives. I recently participated in a conversation about the proposed merger of Kroger (Fred Meyer) and Albertsons, currently under consideration by the Federal Trade Commission. If approved, the merger will impact communities across the state, bringing more resources and investment into our full-service grocers like Fred Meyer and Safeway. This immediately struck me as a positive investment to protect Oregonians’ access to food and shopping options, as well as good paying jobs in communities across Oregon.

In recent years, discount and online grocers like Walmart and Amazon have radically transformed the grocery industry. And consumers have changed how they shop, with more turning to alternatives like Target or Dollar Tree. The full-service grocers we are accustomed to seeing in our community – Fred Meyer, Safeway, Albertsons – are facing growing competition. Kroger has actually shrunk their profit margins over the last 20 years to stay responsive to the market and a commitment to customers. This merger is critical to help them stay competitive and prevent downsizing. Per Rodney McMullen, CEO of Kroger, they are currently ranked fourth in total revenue among U.S. grocery retailers behind Walmart, Amazon and Costco. A combined Kroger and Albertsons will remain at number four as they continue to compete with these companies to sell groceries. 

While national mergers like this hold vast complexity, they have major impacts on our daily lives as Oregonians. Store closures, especially in communities with few stores already, drastically reduce the access and options available to residents. Feeding America reports that 11% of rural households are experiencing food insecurity – higher than the rate found in urban areas. This is in large part due to food deserts that not only lack access to grocery stores, but particularly healthy, nutritious food because local agriculture is not being utilized.

Of particular importance to me is that Kroger recognizes many households lack this access. To help local suppliers, Kroger pledged to increase the number of locally sourced products in its stores by 10% following its proposed merger with Albertsons. This delivers a broader portfolio of the freshest products through an expanded store network, optimized supply chain and enhanced capabilities. 

In addition, stores like Kroger and Albertsons employ union workers, offer good paying jobs, and benefits. Store closures can often mean job losses, which can have multiplying effects on communities. Kroger will continue to offer better wages and benefits than discount grocers, keeping much needed, living wage jobs in Oregon communities. They have committed that they will not close any stores, distribution centers or manufacturing facilities or lay off any frontline associates as a result of the merger. This includes all associated pharmacies and gas stations. Pharmacy closures have been a growing issue here in Oregon, and it is critical we ensure Oregonians have ongoing access to medications. 

Kroger has a broad philanthropic plan as well, committing $500 billion to lower grocery prices, $1 billion to continue raising employee wages and benefits, and 10 billion meals donated by 2030.

If the merger is approved, the Federal Trade Commission will also issue divestment plans to guarantee the market is balanced. In the state of Oregon, Kroger will divest of 49 stores to C&S Wholesale Grocers. C&S is an industry leader in wholesale grocery supply and one of the largest privately held companies in the United States, bringing 104 years of food industry experience and a track record as a successful grocery retailer.

As you shop for food and gifts this holiday season, it’s important to acknowledge how quickly markets we’ve long known are changing, and be informed about how these trends are going to impact our communities. I appreciate Kroger’s dedication to Oregon’s communities and believe them remaining competitive holds broad value for all of us. 

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