Key Quotes From Kroger Albertsons Merger Hearing

PORTLAND, Ore. — After two weeks of legal arguments and testimony, the hearing into Kroger’s proposed $25 billion acquisition of Albertsons is coming to a close.

How did Kroger, Albertsons and C&S Wholesale Foods make their arguments and did they make mistakes in the case where Federal Trade Commission regulators are suing to kill the deal? Here are some key excerpts from the proceedings:

“Walmart is our main competitor”

Who said it: Andrew Groff, Kroger’s senior pricing manager, told the court.

Why it matters: He was one of several Kroger executives who testified that lowering prices was a central part of the retailer’s strategy, and that they were particularly fixated on competing with Walmart. But Kroger executives said they weren’t trying to beat Walmart directly on price. Instead, they tried to keep their prices between Walmart and traditional rivals like Albertsons. On average, Kroger executives revealed that their company is about 2 to 3 percent more expensive than Walmart on its most popular items, but 10 to 12 percent less expensive than Albertsons.

“The 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 low, Groff admitted to FTC attorney Elizabeth Arens that the process wasn’t always smooth. As inflation soared during the pandemic, Kroger raised prices on thousands of items to pass on the company’s higher costs. He acknowledged that prices for volatile products 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 Commercial and Marketing Officer

Why it matters: Kroger and Albertsons executives both stressed that competition in the grocery industry is changing and that they view any company that sells any food as a competitor, not just traditional supermarkets.

“Kroger gave us their worst chains”

Who said it: Alona Florenz, Senior Vice President of C&S Wholesale Grocers

Why it matters: Kroger and Albertsons have agreed to sell 579 supermarkets to C&S Wholesale Grocers to reassure regulators and consumers that the deal will preserve competition in the market. C&S Wholesale CEO Eric Winn spoke out to defend his company against criticism that it lacks retail experience, saying his company made the decision to transform itself into a retailer.

Yet all it takes is a few sarcastic text messages or emails from a senior executive in your organization to risk sowing seeds of doubt. That’s what Florenz could have done. The executive who analyzes acquisitions for C&S Wholesale Grocers was asked about text messages in which she mocked the financial performance of stores previously acquired in a 2021 deal. And in other messages with colleagues, she made it clear that she didn’t think highly of some of the Kroger stores her company was acquiring in the current deal.

“I’ll have to look for other options.”

Who said it: Vivek Sankaran, CEO of Albertsons

Why it matters: Sankaran warned that his company’s future could be bleak if it is not acquired. He said there could be layoffs, store closures and even the exit of some 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 concern with nontraditional competitors of all stripes, such as Walmart, Amazon, Costco and even Dollar General. But he could perhaps have addressed why it’s having such a hard time getting the proposed merger approved.

The problem is that to win its case, Kroger must make at least part of the case to U.S. District Judge Adrienne Nelson as to why she should approve potentially the largest retail merger in American history.

So far, she keeps a straight face.

For the latest news on Kroger, P&G, Fifth Third Bank and Cincinnati business, follow @alexcoolidge on X (formerly Twitter).

This article was originally published in the Cincinnati Enquirer: Key quotes from Kroger-Albertsons merger hearing