“Bigger is better” is not a popular slogan these days. The constant drumbeat from politicians and the media equates being big with hurting the U.S.
consumer. That limited thinking casts a cloud over the proposed Kroger and Albertsons merger. It ignores the elephant in the room, Walmart, which controls the top tier of the grocery market, and it could cost consumers and harm union labor.
Walmart has a supersized market share. Kroger comes in at a distant second, followed by Costco and Albertsons. But Kroger and Albertsons are unique in the sector.
Only they are union employers. To compete with the Walmart behemoth, the proposed merger will allow the combined company to pass on pricing benefits while securing union jobs. The Federal Trade Commission is challenging the merger, joined by Illinois and several other states and the District of Columbia, claiming it will eliminate competition, raise grocery prices and harm workers.
Yet Kroger pledges investing $500 million to lower prices, $1.3 billion to enhance the customer experience, and $1 billion to continue raising wages and benefits. Kroger is on the record with a commitment not to close any stores, distribution centers or manufacturing facilities, or lay off any frontline associates.
But how can the public be sure Kroger will live up to its promises? Look at Kroger’s past performance. Since 2018, the company has reduced its margins by more than $5 billion in a continuing effort to provide high-quality groceries at affor.