Kroger Claims Albertsons Merger Will Lead To Lower Prices

As Kroger and Albertsons await a decision from government officials regarding the merger of the two grocery giants, officials with the former are claiming the union will have several benefits including lower prices for shoppers. 

"We believe the way to be America's best grocer is to provide great value by consistently lowering prices and offering more choices,” said Rodney McMullen, chairman and CEO of Kroger. “When we do this, more customers shop with us and buy more groceries, which allows us to reinvest in even lower prices, a better shopping experience, and higher wages. We know this model works because we've been doing it successfully for many years, and this is exactly what this merger will bring customers – lower prices and more fresh, affordable choices."

According to Kroger, this strategy is not new to the company. The retailer has invested to lower prices consistently since 2003, resulting in $5 billion in customer savings and providing more affordable products to families across America, company officials said. 

Kroger offered an analysis that puts this significant investment into clearer context and includes additional details. Specifically, it demonstrates Kroger:

• Consistently lowered prices and improved the customer experience during previous mergers: Kroger invested more than $125 million to lower prices at Harris Teeter after its merger in 2014 and more than $100 million to lower prices at Roundy's after its merger in 2016. Additionally, Kroger invested $2.5 million and $2.4 million in capital per Harris Teeter and Roundy's store, respectively, to enhance the customer experience in the three years following each merger.
• Reduced profits to ensure groceries remained affordable for families across America: Kroger's ongoing work to lower prices in the last 20 years reduced its gross margin by 5%. 
• Made clear, consistent commitments to lower prices and improve the customer experience post-merger: Kroger will invest $500 million to lower prices following the merger with Albertsons starting day one following the transaction close. Kroger will also invest $1.3 billion to improve Albertsons' stores following the merger, all to better serve customers.

Will become more competitive and able to invest even more to support customers and more than 700,000 associates by combining with Albertsons. Kroger's merger with Albertsons will allow it to attract and retain more customers by lowering prices, creating a more seamless and personalized experience and expanding its selection of fresh, affordable food. By doing so, Kroger expects to grow revenues and drive additional investments in pricing and store improvements as well as wages and benefits.