Building on Its 20-Year Track Record of
Enhancing Value Kroger will Lower Prices for More Customers,
Consistent with Its Approach to Previous Mergers
CINCINNATI, Feb. 13,
2024 /PRNewswire/ -- The Kroger Co. (NYSE: KR) today
shared additional insights about how the company lowered prices in
previous mergers, bolstering its commitment to bring more consumers
across America lower prices and more choices following its proposed
merger with Albertsons Cos.
"We believe the way to be America's best grocer is to provide
great value by consistently lowering prices and offering more
choices. When we do this, more customers shop with us and buy more
groceries, which allows us to reinvest in even lower prices, a
better shopping experience, and higher wages," said Rodney McMullen, chairman and CEO of Kroger. "We
know this model works because we've been doing it successfully for
many years, and this is exactly what this merger will bring
customers – lower prices and more fresh, affordable choices."
This strategy is not new to Kroger. The retailer has invested to
lower prices consistently since 2003, resulting in $5 billion in customer savings and providing more
affordable products to families across America. Kroger offered an
analysis that puts this significant investment into clearer context
and includes additional details. Specifically, it demonstrates
Kroger:
- Consistently lowered prices and improved the customer
experience during previous mergers: Kroger invested more than
$125 million to lower prices at
Harris Teeter after its merger in 2014 and more than $100 million to lower prices at Roundy's after
its merger in 2016. Additionally, Kroger invested $2.5 million and $2.4
million in capital per Harris Teeter and Roundy's store,
respectively, to enhance the customer experience in the three years
following each merger.
- Reduced profits to ensure groceries remained affordable for
families across America: Kroger's ongoing work to lower prices
in the last 20 years reduced its gross margin by 5%. Meanwhile,
Amazon, Ahold Delhaize, Walmart and Dollar General have increased
gross margins by 22%, 4%, 1% and 2%, respectively, during the same
time period.
- Made clear, consistent commitments to lower prices and
improve the customer experience post-merger: Kroger will invest
$500 million to lower prices
following the merger with Albertsons starting day one following the
transaction close. Kroger will also invest $1.3 billion to improve Albertsons' stores
following the merger, all to better serve customers.
- Will become more competitive and able to invest even more to
support customers and over 700,000 associates by combining with
Albertsons. Kroger's merger with Albertsons will allow it to
attract and retain more customers by lowering prices, creating a
more seamless and personalized experience and expanding its
selection of fresh, affordable food. By doing so, Kroger expects to
grow revenues and drive additional investments in pricing and store
improvements as well as wages and benefits.
To learn more about the proposed merger between Kroger and
Albertsons Cos visit here.
About Kroger
At The Kroger Co. (NYSE: KR),
we are dedicated to our Purpose: to Feed the Human Spirit™. We are,
across our family of companies nearly half a million associates who
serve over eleven million customers daily through a seamless
digital shopping experience and retail food stores under a variety
of banner names, serving America through food inspiration and
uplift, and creating #ZeroHungerZeroWaste communities by 2025. To
learn more about us, visit our newsroom and investor
relations site.
Forward-Looking Statements
This press release
contains certain statements that constitute "forward-looking
statements" within the meaning of federal securities laws,
including statements regarding the effects of the proposed merger
with Albertsons Companies. These statements are based on the
assumptions and beliefs of Kroger management in light of the
information currently available to them. Such statements are
indicated by words or phrases such as "believe," "expects,"
"strategy," and "will." Various uncertainties and other factors
could cause actual results to differ materially from those
contained in the forward-looking statements. These include the
specific risk factors identified in "Risk Factors" in Kroger's
annual report on Form 10-K for the last fiscal year and any
subsequent filings, as well as the following: the expected timing
and likelihood of completion of the proposed transaction and
divestiture plan, including the timing, receipt and terms and
conditions of any required governmental and regulatory clearance of
the proposed transaction and divestiture plan; the impact of the
proposed divestiture plan; the occurrence of any event, change or
other circumstances that could give rise to the termination of the
merger agreement or divestiture agreement; the outcome of any legal
proceedings that have been instituted and may in the future be
instituted against the parties and others following announcement of
the merger agreement and proposed transaction or divestiture plan;
the inability to consummate the proposed transaction or divestiture
plan due to the failure to satisfy other conditions to complete the
proposed transaction or divestiture plan; risks that the proposed
transaction or divestiture plan disrupts our current plans and
operations; the ability to identify and recognize, including on the
expected timeline, the anticipated total shareholder return
("TSR"), revenue and EBITDA expectations; the amount of the costs,
fees, expenses and charges related to the proposed transaction and
divestiture plan; the risk that transaction and/or integration
costs are greater than expected, including as a result of
conditions regulators put on any approvals of the transaction; the
potential effect of the announcement and/or consummation of the
proposed transaction or divestiture plan on relationships,
including with associates, suppliers and competitors; our ability
to maintain an investment grade credit rating; the risk that
management's attention is diverted from other matters; risks
related to the potential effect of general economic, political and
market factors, including changes in the financial markets as a
result of inflation or measures implemented to address inflation,
and any epidemic, pandemic or disease outbreaks, on Kroger,
Albertsons or the proposed transaction or divestiture plan; the
risk of adverse effects on the market price of our or Albertsons's
securities or on Albertsons's or the Company's operating results
for any reason; the occurrence of any event, change or other
circumstances that could give rise to the termination of the merger
agreement or divestiture agreement; and other risks described in
our filings with the SEC. The ability of Kroger to achieve
the goals for the proposed transaction may also be affected by our
ability to manage the factors identified above. The forward-looking
statements by Kroger included in this press release speak only as
of the date the statements were made. Kroger assumes no obligation
to update the information contained herein unless required by
applicable law. Please refer to Kroger's reports and filings with
the Securities and Exchange Commission for a further discussion of
these risks and uncertainties.
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SOURCE The Kroger Co.