NGA Show 2023: David Schoeder Talks Post COVID-19 Challenges, Kroger/Albertsons Merger
During the Financial Symposium that kicked off the National Grocers Association’s 2023 Show in Las Vegas, NV, David Schoeder, partner at The Food Partners, discussed the future of grocery growth, post-pandemic challenges, the proposed Kroger and Albertsons merger and more.
Schoeder is one of several partners at The Food Partners, an investment banking firm to the food industry that provides merger, acquisition, divestiture services and more. In his presentation, he pointed to several challenges that the grocery industry should be bracing for in 2023 and beyond, including the ongoing Russian invasion of Ukraine and persistent high inflation that many in the industry have been accustomed to. Other factors include consumers eating away from home more, and SNAP benefits for low-income families slated to expire in the coming days.
“I’m not one of the people that think the Feds are going to get inflation under control,” Schoeder said. “We have inflation because of so much product not being available, not because people are buying too much. I think we’re gonna have more inflation. The potential of going into a recession if that is true is far greater. We have these material supply chain issues… that I don’t think goes away.”
Schoeder discussed the “winners and losers” of inflation as well, urging independent and small grocers to offer unique services that keep customers coming back despite potentially lower prices elsewhere at chains like Walmart and Aldi.
“You’re probably going to lose customers if there’s not something unique about your services… people appreciate services,” he said. “It’s hard to convince people that this [inflation] isn’t going to just continue.”
When discussing the Kroger and Albertsons merger that was announced in October, Schoeder said that the deal wouldn’t create a monopoly of stores nationwide, but would in certain markets. This would potentially lead to store sales in order to receive regulatory approval of the deal. Originally, Albertsons said it was prepared to establish an Albertsons Cos. subsidiary (SpinCo), which would be spun-off to Albertsons Cos. shareholders immediately prior to merger closing and operate as a standalone public company with the assistance of Kroger.
“This isn’t like Ford and General Motors coming together…Seattle probably has the most crossover where there will have to be stores divested,” he said. “The biggest issue here is whether or not they can construct a scenario in which they take some stores in Chicago, stores in Denver and Dallas… and put them into a company that’s going to have the ability to operate. They’re going to have to be very convincing that that works.”
The NGA Show 2023 is taking place at Caesar’s Forum Feb. 26-28.