To Matt Stoller: Go actually shop at a number of Kroger stores and then re-write your piece so that it reflects reality. You will find that the Kroger stores are a bit run down and not too busy. Kroger and Albertsons are the second- and fourth-largest grocery sellers with 8.9% and 5.5% of U.S. grocery market share, respectively. So, what…
To Matt Stoller: Go actually shop at a number of Kroger stores and then re-write your piece so that it reflects reality. You will find that the Kroger stores are a bit run down and not too busy. Kroger and Albertsons are the second- and fourth-largest grocery sellers with 8.9% and 5.5% of U.S. grocery market share, respectively. So, what does that tell you? Even combined, they represent only about 15% of the market. Newsflash for Kahn and Stoller: It is laughable that the FTC thinks that a combined company that has 15% of a market is on its way to a monopoly. That is exactly backwards.
Kroger and Albertsons are fighting for their lives. Against whom, and why did things turn south? Things started to go badly for these two businesses when the democrats managed to get inflation roaring. People started to look for lower grocery prices, and they found them at Walmart. Note to Kahn: Maybe you should include Walmart in your analysis of grocery mergers since Walmart has over 25% of the market, and its share is growing.
Next up, why should Kroger and Albertsons want to merge? They didn't want to, the needed to! How does Walmart have lower prices? Walmart negotiates lower costs because they have more volume. That is a standard in every industry. More volume gives a business leverage to demand discounts. The merger was needed to give the combined company a shot at competing with the 500 lb. gorilla Walmart. And Kahn shot it down. Now what for Kroger and Albertsons? Eventual bankruptcy? Massive contraction to only support the upper middle class with a few stores in suburbia? Brilliant!! Thanks Lisa Kahn! Maybe we should name a food desert after her.
But wait, didn't Kamala tell us that the real reason that grocery prices were up so much was because of price gouging by such companies? Well, Kroger makes less than 2 pennies per dollar of goods sold. That is a very lean and mean company, hardly one that is gouging the customers and living high on the hog. And BTW Matt and Lisa, if Kroger were actually gouging the consumers could just drive a few blocks away and hit the Walmart. Yes, competition works quite well. And this merger that got blocked did not increase true competition, instead it will ultimately hand more market share to Walmart and further drive Kroger and Albertsons loss of market share.
But I know that some of you think that the Federal Govt should just run everything. Profit is evil, only enjoyed by the rich. Well, your old friend Obama thought that too regarding student loans. In 2010, he had the Federal Govt take over student loan administration so that the Federal Govt could use the billions in profits to fund his ACA. Well, how did that work out? The Federal Govt managed to take those billions in profits and turn it into billions in losses. It got so bad that Biden decided that if they were going to lose a lot of money anyway on the program, they might as well just fire up a phony student loan forgiveness vote buying plan and lose a lot more.
Bottom line is that the grocery business was performing quite well. Normal competition was going on daily. Supply is great, selection is great, and prices simply reflect the cost of doing business in the inflated economy that exists. Kahn did no one any favors with her actions against Kroger, but instead she may have hammered a few nails into its coffin.
This is just a guess, but I think their plan is to corner certain local grocery store markets and increase the prices because they'll never get them low enough to compete with Amazon or Walmart. Not every city, town, or neighborhood has a Walmart, and many people still prefer to shop in person (for now).
In the case where there is no Walmart close by, then yes, a merger could result in a local "monopoly" and possible price increases. But such locations are rare, and Walmart would surely open a store there since the location is ripe for competition.
Also realize that the locations you mention where there is no Walmart probably already have higher prices since the low-cost leader is not present to compete with them.
Your guess is essentially what I meant by these grocers shifting to only upper middle-class locations where people are willing to pay more for a nicer shopping experience. But of course, that means closing many locations and many lost jobs to go along with food deserts. And, at least where I live, that was already in place before Walmart showed up. The upscale grocers all faded away mainly due to increased competition but also due to niche grocers like Trader Joes, Fresh Market, etc.
To Matt Stoller: Go actually shop at a number of Kroger stores and then re-write your piece so that it reflects reality. You will find that the Kroger stores are a bit run down and not too busy. Kroger and Albertsons are the second- and fourth-largest grocery sellers with 8.9% and 5.5% of U.S. grocery market share, respectively. So, what does that tell you? Even combined, they represent only about 15% of the market. Newsflash for Kahn and Stoller: It is laughable that the FTC thinks that a combined company that has 15% of a market is on its way to a monopoly. That is exactly backwards.
Kroger and Albertsons are fighting for their lives. Against whom, and why did things turn south? Things started to go badly for these two businesses when the democrats managed to get inflation roaring. People started to look for lower grocery prices, and they found them at Walmart. Note to Kahn: Maybe you should include Walmart in your analysis of grocery mergers since Walmart has over 25% of the market, and its share is growing.
Next up, why should Kroger and Albertsons want to merge? They didn't want to, the needed to! How does Walmart have lower prices? Walmart negotiates lower costs because they have more volume. That is a standard in every industry. More volume gives a business leverage to demand discounts. The merger was needed to give the combined company a shot at competing with the 500 lb. gorilla Walmart. And Kahn shot it down. Now what for Kroger and Albertsons? Eventual bankruptcy? Massive contraction to only support the upper middle class with a few stores in suburbia? Brilliant!! Thanks Lisa Kahn! Maybe we should name a food desert after her.
But wait, didn't Kamala tell us that the real reason that grocery prices were up so much was because of price gouging by such companies? Well, Kroger makes less than 2 pennies per dollar of goods sold. That is a very lean and mean company, hardly one that is gouging the customers and living high on the hog. And BTW Matt and Lisa, if Kroger were actually gouging the consumers could just drive a few blocks away and hit the Walmart. Yes, competition works quite well. And this merger that got blocked did not increase true competition, instead it will ultimately hand more market share to Walmart and further drive Kroger and Albertsons loss of market share.
But I know that some of you think that the Federal Govt should just run everything. Profit is evil, only enjoyed by the rich. Well, your old friend Obama thought that too regarding student loans. In 2010, he had the Federal Govt take over student loan administration so that the Federal Govt could use the billions in profits to fund his ACA. Well, how did that work out? The Federal Govt managed to take those billions in profits and turn it into billions in losses. It got so bad that Biden decided that if they were going to lose a lot of money anyway on the program, they might as well just fire up a phony student loan forgiveness vote buying plan and lose a lot more.
Bottom line is that the grocery business was performing quite well. Normal competition was going on daily. Supply is great, selection is great, and prices simply reflect the cost of doing business in the inflated economy that exists. Kahn did no one any favors with her actions against Kroger, but instead she may have hammered a few nails into its coffin.
The court case has revealed text messages between the grocery store executives saying that the merger will likely increase prices. https://www.idahostatesman.com/news/business/article293264019.html
This is just a guess, but I think their plan is to corner certain local grocery store markets and increase the prices because they'll never get them low enough to compete with Amazon or Walmart. Not every city, town, or neighborhood has a Walmart, and many people still prefer to shop in person (for now).
In the case where there is no Walmart close by, then yes, a merger could result in a local "monopoly" and possible price increases. But such locations are rare, and Walmart would surely open a store there since the location is ripe for competition.
Also realize that the locations you mention where there is no Walmart probably already have higher prices since the low-cost leader is not present to compete with them.
Your guess is essentially what I meant by these grocers shifting to only upper middle-class locations where people are willing to pay more for a nicer shopping experience. But of course, that means closing many locations and many lost jobs to go along with food deserts. And, at least where I live, that was already in place before Walmart showed up. The upscale grocers all faded away mainly due to increased competition but also due to niche grocers like Trader Joes, Fresh Market, etc.