Posts Tagged “Kroger”
The U.S. Federal Trade Commission (FTC), charged with promoting consumer rights, sued to block what could be the largest supermarket merger in U.S. history. A merger of Kroger and Albertsons, the FTC said, would lead to higher prices, store closures, and job losses.
The $25-billion deal, announced in November 2022, has seen opposition from the United Food and Commercial Workers Union, as well as multiple senators and attorneys general. The FTC suit is one of the merger’s greatest challenges so far.
“Kroger’s acquisition of Albertsons would lead to additional grocery price hikes for everyday goods, further exacerbating the financial strain consumers across the country face today,” said Henry Liu, director of the FTC’s Bureau of Competition, in a public statement.
“Essential grocery store workers would also suffer under this deal, facing the threat of their wages dwindling, benefits diminishing, and their working conditions deteriorating.”
As part of the merger plans, the companies intend to divest 413 stores, eight distribution centers, and five private label brands to C&S Wholesale Grocers. The FTC suit has deemed the measures “inadequate”.
“The combined Kroger and Albertsons would have more leverage to impose subpar terms on union grocery workers that slow improvements to wages, worsen benefits, and potentially degrade working conditions,” an FTC statement said.
Kroger responded Monday, stating it would challenge the suit in court and stand behind the merger. Kroger said it would not negatively impact grocery competition and would result in lower prices for consumers and more investments in employee wages.
In response to an announcement of a merger between national grocery chains, Kroger and Albertsons, the National Grocers Association (NGA) of Washington, D.C. has released the following statement:
“A merger of the nation’s top two grocery chains should raise serious questions about a single supermarket giant gaining unprecedented dominance over the nation’s food supply chain,” said Greg Ferrara, NGA president and CEO.
“A merger would not only put smaller competitors at an unfair disadvantage, but also increase anticompetitive buyer power over grocery suppliers, which ultimately would harm consumers. It is our expectation that this deal will receive rigorous scrutiny from federal antitrust enforcers.”
NGA filed comments in April of this year to the U.S. Department of Justice Antitrust Division and U.S. Federal Trade Commission’s January 18, 2022 Request for Information on Merger Enforcement. NGA issued a White Paper in March of 2021 about the anticompetitive impacts of buyer power on the grocery supply chain.
About NGA
NGA is the national trade association representing the retail and wholesale community grocers that comprise the independent sector of the food distribution industry. An independent retailer is a privately owned or controlled food retail company operating a variety of formats. The independent grocery sector is accountable for about 1.2 percent of the nation’s overall economy and is responsible for generating more than $250 billion in sales, 1.1 million jobs, $39 billion in wages and $36 billion in taxes. NGA members include retail and wholesale grocers located in every congressional district across the country, as well as state grocers’ associations, manufacturers and service suppliers. For more information about NGA, visit www.nationalgrocers.org.
When it comes to “Fresh for Everyone,” Kroger is poised to significantly extend its reach. The Cincinnati-based supermarket chain entered a definitive agreement with Albertsons Cos., Oct. 14, to purchase the Boise, Idaho-based competitor for approximately $24.6 billion.
The merger will expand customer reach and improve proximity to deliver fresh and affordable food to approximately 85 million households with a premier omnichannel experience, according to a release.
Together, Albertsons and Kroger currently employ more than 710,000 associates and operate a total of 4,996 stores, 66 distribution centers, 52 manufacturing plants, 3,972 pharmacies and 2,015 fuel centers. The combination creates a “premier seamless ecosystem” across 48 states and the District of Columbia, providing customers with a “best-in-class shopping experience” across both stores and digital channels, said the release.
Amid a climate of rising food inflation, Kroger said its “long track record of lowering prices” in combination with efficiencies gained from the merger, will help the company to lower prices for customers. Kroger said it expects to reinvest approximately half a billion dollars of cost savings from synergies to reduce prices for customers, as well as invest an incremental $1.3 billion into Albertsons stores to enhance the customer experience.
“We are bringing together two purpose-driven organizations to deliver superior value to customers, associates, communities and shareholders,” said Rodney McMullen, Kroger chairman and CEO, who will continue serving as chairman and CEO of the combined company, in the release. “Albertsons Cos. brings a complementary footprint and operates in several parts of the country with very few or no Kroger stores. This merger advances our commitment to build a more equitable and sustainable food system by expanding our footprint into new geographies to serve more of America with fresh and affordable food and accelerates our position as a more compelling alternative to larger and non-union competitors.
“As a combined entity, we will be better positioned to advance Kroger’s successful go-to-market strategy by providing an incredible seamless shopping experience, expanding Our Brands portfolio, and delivering personalized value and savings,” McMullen continued. “We’ll also be able to further enhance technology and innovation, promote healthier lifestyles, extend our health care and pharmacy network and grow our alternative profit businesses. We believe this transaction will lead to faster and more profitable growth and generate greater returns for our shareholders.”
Albertsons agrees the merger will result in greater access to fresh food across the country.
“At Albertsons Cos., we are guided by an ambition to create customers for life,” said Vivek Sankaran, CEO of Albertsons. “Together with Kroger, our combined iconic banners will be able to provide customers with even more value and greater access to fresh food and essential pharmacy services. Given the similarities in the culture and values at Kroger and Albertsons Cos., I am confident that the combination will also have a positive impact on our associates and the communities we are proud to serve. We look forward to working together with Kroger to capture the compelling opportunities ahead.”
The transaction is expected to close in early 2024, subject to the receipt of required regulatory clearance and other customary closing conditions, including receipt of clearance under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, according to the release.
CINCINNATI and MONROE, OH — The Kroger Co. and Drone Express, a division of TELEGRID Technologies, Inc., recently announced a pilot to offer grocery delivery via autonomous drones, expanding the retailer’s seamless ecosystem and providing customers with anything, anytime, anywhere.
“Kroger’s new drone delivery pilot is part of the evolution of our rapidly growing and innovative e-commerce business – which includes pickup, delivery, and ship and reached more than $10 billion in sales in 2020,” said Kroger’s Jody Kalmbach, group vice president of product experience. “The pilot reinforces the importance of flexibility and immediacy to customers, powered by modern, cost-effective, and efficient last-mile solutions. We’re excited to test drone delivery and gain insights that will inform expansion plans as well as future customer solutions.”
The pilot will offer customers unparalleled flexibility as Drone Express technology allows package delivery to the location of a customer’s smartphone not only to a street address, simply meaning a customer will be able to order delivery of picnic supplies to a park, sunscreen to the beach, or condiments to a backyard cookout, for instance.
Kroger is designing bundled product offerings ideal for meeting customer needs within the current weight limits for drone delivery, which is about five pounds. As an illustration, Kroger will offer a baby care bundle with wipes and formula, a child wellness bundle with over-the-counter medications and fluids, and a S’mores bundle with graham crackers, marshmallows, and chocolate. Using Kroger.com/DroneDelivery, customers can place orders and have eligible orders delivered within as little as 15 minutes.
“Autonomous drones have unlimited potential to improve everyday life, and our technology opens the way to safe, secure, environmentally friendly deliveries for Kroger customers,” said Beth Flippo, Chief Technology Officer, TELEGRID. “The possibilities for customers are endless – we can enable Kroger customers to send chicken soup to a sick friend or get fast delivery of olive oil if they run out while cooking dinner.”
Drone Express commenced test flights in early May near the Kroger Marketplace in Centerville, Ohio (1095 South Main Street). The flights were managed by licensed Drone Express pilots from an on-site trailer with additional off-site monitoring. Customer deliveries are scheduled to begin later this spring, and a second pilot is scheduled to launch this summer at a Ralphs store in California.
The West, the Pacific Northwest and the Great Lakes have been selected by Kroger for its next three automated fulfillment centers.
The facility in the West will be 300,000 square feet, the facility in the Pacific Northwest will be 200,000 square feet, and the facility in the Great Lakes will be 150,000 square feet, according to a news release. The exact locations of the new centers have yet to be revealed.“Kroger and Ocado are building an e-commerce ecosystem across the U.S. that will deliver unrivaled online experiences to more customers, in more ways and in more markets,” Luke Jensen, CEO of Ocado Solutions, said in the release. “Spanning a range of automated (customer fulfillment center) sizes, these three new sites will be key parts of this growing and flexible fulfillment network. Alongside the scale and wider benefits of larger CFCs, smaller-format and mini CFCs will allow Kroger to reach more geographies with Ocado’s automation, while also catering to a wide range of options for delivery
Kroger and Ocado Solutions, which specializes in automated warehouses for online grocery order fulfillment, has an agreement to build 20 facilities with Kroger.
“Kroger is incredibly excited to construct three additional industry-leading customer fulfillment centers across the country in relationship with Ocado to bring fresh food to our customers more conveniently than ever before,” Robert Clark, Kroger’s senior vice president of supply chain, manufacturing and sourcing, said in the release. “Through our strategic partnership, we are engineering a model for these regions, leveraging advanced robotics technology and creative solutions to redefine the customer experience.”
Previously announced locations for Kroger automated fulfillment centers are:
- Monroe, Ohio
- Groveland, Fla.
- Fredericksburg, Md.
- Atlanta
- Dallas
- Pleasant Prairie, Wis.
The third location of an automated online order fulfillment center has been announced by Kroger.
“The new facility (in Forest Park, GA) will provide Kroger the ability to bring customers across the coverage area fresher food faster than ever before,” Tim Brown, president of Kroger’s Atlanta division, said in a news release. “I’m thrilled the Atlanta market was selected as one of the 20 (customer fulfillment center) sites.”
In the release, Kroger described the center as a $55 million investment. The company is building the centers in partnership with Ocado.
Luke Jensen, CEO of Ocado Solutions, said the facility will “transform the e-commerce experience for customers in the region.”
“In a fast-developing landscape for grocery retail, Kroger’s determination to continue delivering the best experience for its customers, online as in stores, is unparalleled,” Jensen said.
The Georgia facility will be 375,000 square feet, per the release. Kroger will break ground on it later this year, and it is expected to be operational in 2021.
Monroe, Ohio, and Groveland, Fla., are the locations for the first two automated fulfillment centers.
Kroger broke ground on the Ohio facility in June and also plans to break ground on the Florida facility this year.
International Paper’s North American Container business is putting Snoopy, Charlie Brown and other Peanuts characters on bulk bins.
Two product displays with the characters are available. Both are corrugated bulk bins, with one featuring Snoopy and watermelons and the other with Snoopy, Linus and Charlie Brown under the words “it’s the great pumpkin.”
“This powerful combination is a standout, drawing customer attention and increasing sales by making shopping a fun experience,” said Scott Dillon, director of marketing, said in a news release. “Peanuts has a multi-generational appeal, and this is a solid way to capture the consumer sentiment around this iconic brand.”
The bins are available at International Paper’s five bulk facilities.
Kroger, Fresh Encounters win Marsh stores at auction
Marsh Supermarkets, at one time a leading Midwest supermarket chain based in Indiana, has recently accepted bids at auction for 26 of its remaining 44 stores. The move follows the company’s closure of 19 locations and bankruptcy filing in May.
Cincinnati-based supermarket powerhouse Kroger will acquire 11 Marsh stores for $16 million, and Fresh Encounter Inc., based in Findlay, OH, will buy 15 Marsh locations for $8 million.
Kroger currently has 2,800 stores nationwide, while Fresh Encounter operates 21 stores under the Community Markets, Great Scott Community Markets, Sack ‘N Save Supermarket and Chief banners. Earlier this year, Fresh Encounter purchased Remke Markets’ 10 stores in the Cincinnati area.
The transactions are subject to bankruptcy court approval. One possible obstacle to the sale is an objection by CVS Health, which purchased the pharmacy accounts from Marsh in April. As part of the agreement, CVS stipulated that 37 stores where Marsh operated pharmacies could not operate as pharmacies for five years.
Kroger and Fresh Encounters have said in court documents that it would proceed with the acquisition only if the restriction is removed. Marsh has countered that the agreement only bars Marsh from operating pharmacies at the stores, and that the language is not enforceable under the bankruptcy code.
The sale of the remaining locations would bring to an end Marsh’s 86 years in business. Ermal Marsh opened the first Marsh store in 1931 in Muncie, IN. The company went public in 1953, when it operated 16 stores.
Discount grocery retailer Aldi announced recently it would invest $3.4 billion to expand its U.S. store base to 2,500 by the year 2022.
The German grocer currently operates 1,600 stores in the United States and said earlier this year it would expand to 2,000 by the end of 2018 at a cost of $1.6 billion.
The $5 billion move would have Aldi as the third-largest U.S. food retailer by store count behind Walmart and Kroger.
“It should absolutely be more than scary to traditional grocers and retailers,” Mikey Vu of the consulting firm Bain & Co., was quoted as saying in a June 12 article in The Wall Street Journal. Vu said Aldi has improved its stores and products in recent years, and is attracting a larger mix of shoppers.
A point of differentiation by Aldi and other discounters, such as Lidl, which opened its first U.S. locations earlier this month, is their longstanding use of store brands to keep prices down, a common practice in Europe. U.S. consumers have traditionally been more brand loyal, but that is beginning to erode, especially with the millennial generation.
Millennials “are value-oriented and don’t hold the same stigmas about private-label items that older generations do,” Mike Paglia, director of the research firm Kantar Retail, was quoted as saying in the WSJ article.
“As we continue to expand and grow, our purchasing power continues to increase and allows us to bring products at better prices for consumers,” Scott Patton, Aldi’s head of corporate buying, said in an interview with CNBC.
Aldi said the new store openings would create 25,000 jobs over the next five years.
About Aldi
Aldi operates stores in 35 states, using a simple, cost-effective approach to grocery shopping to save shoppers on their grocery bills. The grocery chain’s website states shoppers have found that switching from national brands to ALDI exclusive brands can save them up to 50 percent on their weekly must-haves. More than 40 million customers each month shop with Aldi’s streamlined approach.
You buy a tasteless cantaloupe at Wal-Mart, or a sour grape sold as being sweet, just bring your receipt back to the store and they’ll refund you money, under a new police in U.S. stores selling produce. This according to a recent story by Reuters news service.
As the largest grocer and seller of produce in the United States, Wal-Mart has already lowered prices on produce as it tries to get its shoppers, many of whom are on limited budgets, to buy more healthy fare. The huge chain, which made a splash in produce nearly 20 years ago, but has since seen its produce departments lose some of their shine, says it is now working on getting fresher produce to its stores more quickly and training its staff to do a better job of selling the goods.
Walmart is buying directly from growers and relying on its own distribution centers and trucking systems to get product from the field to shelf faster. It has produce experts working with farmers in key growing regions and aims to double its sales of locally grown produce by December 2015.
Buying more local produce and cutting supply chain costs have helped Walmart keep a lid on prices, which has been key in its push to stay ahead of rivals that include traditional grocers such as Kroger Co and drugstores such as Walgreen Co. Walmart started to see sales gains in produce earlier this year after it began making improvements in produce handling.
Other chains, such as Safeway Inc and Texas’ H-E-B, have already offered guarantees on their produce, but Walmart’s push will be the biggest as it is the nation’s biggest retailer.
Walmart customers not satisfied with the produce can bring their receipt back to the store for a refund. Walmart said the shoppers will not need to bring back the produce to qualify.
To ensure that fresh produce makes it to the stores, Walmart said unnamed third-party service providers will do weekly checks in more than 3,400 of its stores selling produce. Walmart said it would benchmark itself and its competitors week over week.
Walmart also said it recently began a produce training program for 70,000 employees. Store managers, market managers and produce department managers are set to learn more about handling fruits and vegetables. Quality guides for workers will illustrate how to identify top produce, the company said.