CINCINNATI, Feb. 26,
2024 /PRNewswire/ -- The Kroger Co. (NYSE: KR) today
issued the following statement:
Contrary to the FTC's statements, blocking
Kroger's merger with Albertsons Companies will actually harm the
very people the FTC purports to serve: America's consumers and
workers.
Kroger's business model is to take costs out
of the business and invest in lowering prices for customers. Kroger
has reduced prices every year since 2003, resulting in $5 billion invested to lower prices and a 5%
reduction in gross margin over this period. This business model is
immediately applied to merger companies. Kroger has a proven track
record of lowering prices so more customers benefit from fresh,
affordable food, and our proposed merger with Albertsons will mean
even lower prices and more choices for America's consumers.
The FTC's decision makes it more likely that
America's consumers will see higher food prices and fewer grocery
stores at a time when communities across the country are already
facing high inflation and food deserts. In fact, this decision only
strengthens larger, non-unionized retailers like Walmart, Costco
and Amazon by allowing them to further increase their overwhelming
and growing dominance of the grocery industry.
The proposed merger with Albertsons Cos. will produce meaningful
and measurable benefits for customers, associates and communities
across the country. The combined company committed that no stores,
distribution centers or manufacturing facilities will close as a
result of the merger, including those divested to C&S Wholesale
Grocers.
Customers will benefit from lower prices and more choices
following the merger close. The company committed to investing
$500 million to begin lowering prices
day one post-close, and an additional $1.3
billion to improve Albertsons Cos.' stores.
This commitment builds on Kroger's long track record of reducing
prices every year, with $5 billion
invested to lower prices since 2003. Kroger's work to deliver
better value to customers over the last 20 years has reduced its
gross margins by 5%. In the same timeframe, competitors like
Amazon, Ahold Delhaize, Walmart and Dollar General have increased
their gross margins by 22%, 4%, 1% and 2%, respectively. Kroger's
track record includes the years following past mergers, as it
invested more than $125 million to
lower prices following its merger with Harris Teeter and more than $100 million to lower prices after it merged with
Roundy's. 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.
Customers will also have access to more favorite items from
their own communities, as the company committed to increasing the
number of local products in its stores by 10 percent post-close. As
large retailers continue to squeeze suppliers and raise prices,
this merger creates more opportunities for families to access the
fresh, affordable foods they love.
As a combined company, Kroger committed to investing
$1 billion to raise wages and
comprehensive benefits. This builds on the incremental $1.9 billion Kroger invested to improve wages and
comprehensive benefits since 2018. To provide the best holistic
support for each associate, the company will also extend continuing
education and financial literacy benefits to all associates
following the merger close. As union membership continues to
decline nationwide, especially in the grocery industry, this merger
is the best way to secure union jobs. Kroger has added more than
100,000 good-paying union jobs since 2012.
The proposed merger will allow the combined company to invest
more deeply to end hunger in communities across America. In 2023,
Kroger committed to donating 10 billion meals to families across
the U.S. by 2030. Bringing these companies together provides one
more step toward achieving communities that are free from hunger
and food waste.
The anticipated divestiture plan with C&S builds on the
benefits of the merger and fulfills the commitments Kroger set out
in its original merger agreement in October
2022. C&S Wholesale Grocers is an industry leader in
wholesale grocery supply and supply chain solutions, with a strong
track record as a successful grocery retailer. Kroger and
Albertsons Cos. took considerable steps to position C&S to
continue to successfully operate divested stores as part of its
comprehensive plan. This includes providing C&S with strong
teams, a cohesive network of stores supported by two regional
headquarters, beloved banners and private label brands, and a
robust operational infrastructure.
In addition to ensuring no store closures as a result of the
merger, the divestiture plan will extend a competitor to new
geographies and will maintain all current collective bargaining
agreements, which include industry-leading healthcare and pension
benefits, bargained-for wages, and ensuring frontline associates
remain employed.
The merging parties look forward to litigating this action in
court so we can deliver the benefits of this merger to communities
across America - lower prices, more choices, and more good-paying
union jobs for decades to come.
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 11 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.
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 transaction and divestiture plan. These statements are
based on the assumptions and beliefs of Kroger and Albertsons
management in light of the information currently available to them.
Such statements are indicated by words or phrases such as
"accelerate," "anticipates," "create," "committed," "confident,"
"continue," "deliver," "driving," "expect," "future," "guidance,"
"positioned," "strategy," "target," "synergies," "trends," 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 each of Kroger's and Albertsons'
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 may 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 disrupts
current plans and operations of Kroger and Albertsons Cos.; the
ability to identify and recognize the anticipated benefits of the
proposed transaction, including expectations and synergies; the
amount of the costs, fees, expenses and charges related to the
proposed transaction or divestiture plan; and the ability of Kroger
and Albertsons Cos. to successfully integrate their businesses and
related operations; the ability of Kroger to maintain an investment
grade credit rating; risks related to the potential impact of
general economic, political and market factors on the companies or
the proposed transaction. The ability of Kroger and Albertsons Cos.
to achieve the goals for the proposed transaction may also be
affected by their ability to manage the factors identified
above.
The forward-looking statements by Kroger and Albertsons included
in this press release speak only as of the date the statements were
made. Neither Kroger nor Albertsons assumes the obligation to
update the information contained herein unless required by
applicable law. Please refer to the reports and filings of Kroger
and Albertsons with the Securities and Exchange Commission for a
further discussion of the risks and uncertainties that affect them
and their respective businesses.
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SOURCE The Kroger Co.