The proposed Kroger, Albertsons merger would have serious impact on workers, customers, and communities alike

Kim Cordova is the president of United Food and Commercial Workers Local 7, representing 23,000 members in Colorado and Wyoming. She also served as a vice president of UFCW International. UFCW Locals 7, 324, 400, 770 and 3000 are members of the Stop the Merger Coalition, including over 100 national, state, and local organizations representing diverse interests who share a common goal: to stop the proposed Kroger, Albertsons grocery merger because of its negative impact on communities across the country.

The proposed $24.6 billion Kroger, Albertsons merger poses a serious threat to workers, consumers, and market competition. Kroger and Albertsons have been trying to hide these effects through vague and illusory promises and meaningless double-speak. This merger, if allowed to proceed, would almost certainly result in job losses, store closures, pharmacy and food deserts, and higher prices, particularly harming low-income communities in both rural and urban areas across the country. 

Kroger and Albertsons claim the merger is necessary to compete with Walmart and Amazon, but their true aim is to consolidate power and increase profits at the expense of workers and customers—particularly in areas where the two companies don’t meaningfully compete with non-traditional grocers.

That’s why, since the mega-merger was first announced in October 2022, the Stop the Merger Coalition–led by UFCW Locals 7, 324, 400, 770, and 3000 representing over 100,000 unionized grocery store workers across more than a dozen states–has continued to build a wide-reaching opposition effort. Eleven state attorneys general and more than 100 organizations are standing up for millions of customers, and all contributors to the food supply chain–from farmers to processors to warehouse workers–to stop the merger and the devastating consequences it poses to our communities. 

As unions, our ability to negotiate collective bargaining agreements between different companies and, if necessary, strike one in order to have more leverage in the marketplace of labor is fundamental. That key piece of leverage in securing better wages, better staffing, and better benefits for our members is at stake if the merger is allowed. 

We can’t take any of the corporations involved at their word when it comes to the merger or its potential impacts on workers. History shows us that similar mergers, like the 2014 Albertsons-Safeway merger and accompanying Haggen debacle, have led to disastrous outcomes, including store closures and job losses. 

In a recent column by an Albertsons consultant, the argument was made that Walmart’s dominance in the grocery market justifies the Kroger-Albertsons merger. However, this claim uses misleading national data, ignoring the fact that Kroger and Albertsons already constitute a majority or supermajority in many local markets, including Denver, Los Angeles, and Seattle, cities in which the merger’s effects would be strongest. 

Market research also shows that many Walmart shoppers tend to be concentrated in more rural communities and Walmart’s offerings tend to be targeted to lower-income shoppers compared to those at Kroger and Albertsons who prioritize convenience and other factors, which makes maintaining the competition between Kroger and Albertsons even more important to prevent geographic monopolies and keep prices down in communities across the country. The urban cores of these three cities, where Kroger and Albertsons vigorously compete for customers today, lack any meaningful presence of non-traditional grocers like Walmart, Costco, or Aldi, whose presence is largely limited to rural and exurban areas. 

The proposed divestiture of over 500 stores to C&S Wholesale is another flawed attempt to create the illusion of competition, but the company lacks the capacity and experience to manage these stores effectively. C&S doesn’t have a credible track record, currently operating fewer than 25 retail grocery stores and only one pharmacy in the entire nation. The estimated real estate value of the stores and distribution centers set to be acquired by C&S is approximately $1.5 billion more than the purchase price. That means C&S would not have to operate a single store and yet could still turn a huge profit if they were to simply sell off those assets as real estate.

Instead of investing in their businesses and workers or bringing down the cost of food, Kroger and Albertsons have funneled billions into shareholder dividends and stock buybacks, ignoring opportunities to improve competition and lower prices. Current food prices have spurred a separate FTC investigation altogether following a sharp rise in “seller’s inflation” and calls from federal elected officials. Recent promises to cut prices if the merger goes through are too little, too late, not to mention empty and unaccountable. Indeed, the companies have already racked up $864 million in legal fees and other merger expenses—roughly the same level of savings that already could have been passed on to consumers.  

In reality, this merger would destroy competition, not enhance it. The Federal Trade Commission, under the leadership of Lina Khan and with the support of several state attorneys general and elected officials at every level of government, has taken legal action against this merger, and we are optimistic that they will succeed in blocking it. The stakes are too high for workers, consumers, and the grocery industry to allow this merger to proceed.

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Editor’s note: This column is a response to this recent op-ed which states that the grocery landscape has changed dramatically in the last several decades, paving the way for the Kroger-Albertsons merger.