Rodney McMullen, Chairman and CEO of The Kroger Co., spoke during the Milken Institute Global Conference in Beverly Hills, California, on May 1, 2023. The potential $24.6 billion deal faced a new obstacle as the U.S. government requested a preliminary injunction to block the merger. McMullen testified during a federal court hearing in Portland, Oregon, emphasizing that the merger would lead to lower prices and a better competitive position against larger retailers like Walmart, Amazon, and Costco if combined with Albertsons.
Despite the merger, Kroger and Albertsons would control around 13% of U.S. grocery sales, which is still less than Walmart’s nearly 22% market share. McMullen assured that Kroger would not raise prices, stating that they believe in the increasing importance of value and the necessity of pricing items competitively. The merger was first proposed in October 2022 after Kroger agreed to purchase Albertsons.
However, the Federal Trade Commission sued earlier in the year to block the deal, alleging that it would eliminate competition and raise grocery prices, particularly amid already high food price inflation. McMullen highlighted rising supplier costs, fuel prices, and credit card swipe fees as factors contributing to the increased prices. In a statement at the time of the initial proposal, McMullen had emphasized that Albertsons Cos. would bring a complementary footprint, operating in parts of the country with very few or no Kroger stores.
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