Kroger to boost employee education benefits post-merger

The Kroger Co. plans to extend its continuing education benefit to the 290,000 Albertsons Cos. employees slated to join the company under the grocers’ planned $24.6 billion merger.

Cincinnati-based Kroger said Wednesday that, after the deal closes, more than 700,000 full- and part-time associates overall will be able to access its continuing education benefit, which provides up to $21,000 of reimbursement toward higher learning or continued development. Employees can use the funds to pursue a high school equivalency exam, professional certification or advanced degree.

More than 15,000 associates have participated in the continuing education program since its launch in 2018, according to Kroger.

All employees also will have access to Kroger’s free Goldman Sachs Ayco financial coaching tool. With Ayco, both salaried and hourly associates access can interact with coaches and use online tools and resources to devise a savings plan, learn how to avoid common financial pitfalls and find ways to maximize company benefits, said Kroger, which now has about 430,000 employees.

“Kroger’s industry-leading educational benefit supports associates who are interested in advancing their learning in any way they want,” Kroger Chairman and CEO Rodney McMullen said in a statement. “Our commitment to offering financial counseling services provides associates with the tools they need to build a budget, pay off debt or begin saving for retirement. These two tools are just some examples of the ways we invest in our associates holistically. Growing these programs is one small part of the world-class benefits plan we offer.”

Unveiled last fall, the Kroger-Albertsons merger agreement would join the nation’s first- and second-largest supermarket retailers into a company with 710,000 workers, annual revenue of about $210 billion and 4,996 stores, 66 distribution centers, 52 manufacturing plants, 3,972 pharmacies and 2,015 fuel centers in 48 states and the District of Columbia. The transaction—now in the antitrust review phase—would mark the largest U.S. supermarket merger ever and is expected by the retailers to close in early 2024.

Kroger said when the deal was announced that it aims to invest $1 billion to lift associate wages and benefits after the transaction is completed. On Wednesday, the company noted that the continuing education and financial coaching programs add to that investment.

Earlier this year, Kroger disclosed plans to invest over $770 million in associates for 2023, including to raise average hourly wages and improve health care options, among other items. The retailer said it hiked average hourly rates by over 6% in 2022 and has invested an incremental $1.9 billion in associate wages since 2018.

In a social media video on Monday, McMullen and Albertsons CEO Vivek Sankaran said the merger would bolster employee benefits. “Together, we will also provide more opportunities for more associates to find a fulfilling career,” Sankaran said in the video, shot in a store under Kroger’s King Soopers banner. “This combination will secure good-paying union jobs, and it will provide our associates the incredible opportunity to create the future of food retail.”

Even with improved benefits, Kroger and Albertsons may encounter a tougher regulatory environment in gaining clearance for the merger deal, in which Kroger is acquiring Albertsons. Last month, the Federal Trade Commission and Department of Justice proposed new and tougher guidelines for antitrust enforcement, with one measure focusing on “the potential for harm to all market participants and any dimension of competition, including for workers.”

Two of the largest unions in the grocery sector, United Food and Commercial Workers International (UFCW) and the International Brotherhood of Teamsters, already have officially stated their opposition to the deal, contending that the transaction poses a threat to job security, wages and benefits by lessening competition. Labor also has cited concerns about possible job losses and workplace changes from store divestitures, including the potential for acquisitions by non-union owners.