PORTLAND, Ore. ‒ After two weeks of legal arguments and testimony, the hearing on Kroger‘s proposed $25 billion takeover of Albertsons is getting closer to wrapping up.
How have Kroger, Albertsons and C&S Wholesale Foods made their case and have they made any flubs in the case where regulators with the Federal Trade Commission are suing to kill the deal? Here are some key quotes from the proceedings:
‘Walmart is our primary competitor’
Who said it: Andrew Groff, Kroger’s senior director for pricing, told the court.
Why it matters: He was one of several Kroger executives who testified that lowering prices were a central part of the retailer’s strategy and they were especially obsessed with competing with Walmart. But Kroger executives said they weren’t trying to beat Walmart outright on price. Instead, they tried to keep their prices between Walmart and traditional rivals like Albertsons. On average, Kroger executives revealed their company is about 2% or 3% more expensive on its most popular items than Walmart, but 10% to 12% less expensive than Albertsons.
“Eggs went up, down and back several times”
Who said it: Groff again.
Why it matters: Just after testifying about Kroger’s efforts to keep grocery prices down, Groff admitted to FTC attorney Elizabeth Arens that process didn’t always go smoothly. As inflation took off during the pandemic, Kroger raised prices on thousands of items to pass along the company’s higher costs. He admitted prices on volatile items like eggs and milk sometimes rose faster than inflation.
‘A banana is a banana is a banana’
Who said it: Stuart Aitken, Kroger’s chief merchant and marketing officer
Why it matters: Both Kroger and Albertsons executives insisted grocery competition is evolving and that they consider any company that sells any food a competitor, not just traditional supermarkets.
‘Kroger gave us their worst chains’
Who said it: Alona Florenz, a C&S Wholesale Grocers senior vice president
Why it matters: Kroger and Albertsons have agreed to sell off 579 supermarkets to C&S Wholesale Grocers to reassure regulators and consumers that the deal will preserve competition in the marketplace. C&S Wholesale CEO Eric Winn took the stand to defend his company against criticism that it’s inexperienced in retail, saying his operation has made the decision to transform itself into a retailer.
Yet, all it takes are a few snarky texts or emails by a senior executive in your organization to risk sowing a little doubt. That’s what Florenz might have done. The executive who analyzes acquisitions for C&S Wholesale Grocers was questioned about texts where she mocked the financial performance of previous stores acquired in a 2021 deal. And in other messages with colleagues she made it clear she didn’t think much of some of the Kroger stores her company was acquiring in the pending deal.
‘I will have to look for other options’
Who said it: Albertsons CEO Vivek Sankaran
Why it matters: Sankaran warned the future could be bleak for his company if it’s not bought out. He indicated there could be layoffs, store closures and even the exit from geographic markets.
‘In business, once it’s obvious – it’s too late’
Who said it: Kroger CEO Rodney McMullen
Why it matters: McMullen was trying to describe his company’s relentless preoccupation with nontraditional competitors on all sides, such as Walmart, Amazon, Costco and even Dollar General.. But he might have touched on why he’s having such a hard time getting the proposed merger approved.
The trouble is, in order to win its case, Kroger has to make it at least somewhat obvious to U.S. District Judge Adrienne Nelson why she should approve potentially the biggest retail merger in American history.
So far, she’s keeping a poker face.
For the latest on Kroger, P&G, Fifth Third Bank and Cincinnati business, follow @alexcoolidge on X (formerly Twitter).
This article originally appeared on Cincinnati Enquirer: Key quotes from the hearing on the Kroger merger with Albertsons
Source Agencies
