UFCW International voices formal opposition to Kroger-Albertsons merger

It’s official: United Food and Commercial Workers International, the nation’s largest grocery retail union, opposes the Kroger-Albertsons supermarket mega-merger.

UFCW International said Friday that, at its recent annual convention, hundreds of delegates voted to reject merger deals that “pose a threat to essential workers, their families and the communities they serve”—including the $24.6 billion Kroger-Albertsons deal, unveiled in mid-October. The union represents 1.3 million members overall.

The agreement would unite the nation’s two largest conventional supermarket operators, creating a company with annual revenue of about $210 billion and 4,996 stores, 66 distribution centers, 52 manufacturing plants, 3,972 pharmacies, 2,015 fuel centers and 710,000 workers in 48 states and the District of Columbia. Currently, the transaction—in which Cincinnati-based Kroger plans to acquire Boise, Idaho-based Albertsons—is in the antitrust review stage with federal and state regulators.

“For months, the UFCW has called for transparency, engaged independent experts and assessed the publicly available information on this proposed merger to determine the widespread impact it will have on our members and the communities they serve. At our 9th Regular Convention, hundreds of UFCW delegates representing our entire union from around the country came together to unanimously declare mergers pose a serious threat to the livelihoods of our members, and we must act to confront them,” UFCW International President Marc Perrone said in a statement.

“Given the lack of transparency, and the impact a merger between two of the largest supermarket companies could have on essential workers and the communities and customers they serve, the UFCW stands united in its opposition to the proposed Kroger and Albertsons merger,” Perrone noted.

Marc Perrone, UFCW International president. / Photo courtesy of UFCW/Marc Perrone

The May 5 statement marks UFCW International’s first formal declaration of opposition to the Kroger-Albertsons merger deal. When the agreement was announced on Oct. 14, UFCW said the transaction presented “serious implications for hundreds of thousands of our UFCW members and America’s families” and pointed to “the national impact such a merger would have” but reported that the national and local unions were still evaluating the transaction.

Still, UFCW emphasized at the time, “To be clear, the UFCW will oppose any merger that threatens the jobs of America’s essential workers, union and non-union, and undermines our communities.”

UFCW’s formal stand against the merger also came a week after Kroger Chairman and CEO Rodney McMullen and Albertsons Cos. CEO Vivek Sankaran called out what they see as public “misconceptions” about their companies’ pending merger in a Cincinnati Enquirer op-ed article. They cited three “myths” about the deal’s potential impact: “My store will close,” “I am going to lose my job and my union will be hurt” and “My groceries are going to be more expensive.” The two CEOs basically restated what they’ve said publicly since the deal was disclosed: No store closings or job cuts are upcoming, and the combined company aims to use its scale to lower prices, not increase them.

“We value and respect our associates and would never move forward with this combination if it could risk their careers. No frontline workers will be laid off as a result of the merger,” McMullen and Sankaran said in the Enquirer column. “The combined company will have one of the largest unionized workforces in the country. We are committed to protecting and expanding opportunities for union jobs.”

At the time of the deal’s announcement, McMullen also stated that “the merger secures union jobs” and the two grocers “will continue to work with local unions across America to serve our communities.”

Labor, consumer and government leaders worry that a combination of Kroger and Albertsons would result in job losses and store closings, decreased access to grocery stores in some communities, and pressure on wages and food pricing. The scale of the merged retailer also would present union workers with a more formidable party at the other side of the bargaining table come contract time. Kroger and Albertsons’ assurances that the deal wouldn’t cost union jobs haven’t assuaged concerns, since potential buyers of divested stores may be non-union and the financial strength of new owners or spun-off stores remains to be seen.

To get the green light from regulators, Kroger and Albertsons have said they plan to divest 100 to 375 stores via direct sales to other operators and/or a newly formed spinoff company, dubbed SpinCo. Their agreement includes a cap of 650 store divestitures, at which point the companies could opt to reassess the transaction.

Kroger has said the merger deal is on track to be finalized in early 2024. Yet Wall Street analysts and other industry observers have said regulatory clearance is likely to take longer for such a large transaction—the biggest U.S. supermarket merger ever—and could last up to two years.