Kroger Inc.
KR,
said Tuesday it will lower prices for customers when its planned merger with Albertsons Cos. Inc.
ACI,
closes, noting that it has done the same with previous deals. “We believe the way to be America’s best grocer is to provide great value by consistently lowering prices and offering more choices,” Kroger CEO Rodney McMullen said in a statement. “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.” McMullen said the retailer invested more than $125 million to lower prices at Harris Teeter after a 2014 merger. That move and others reduced its gross margin by 5% over the last 20 years, it said, while rivals such as Amazon.com Inc.
AMZN,
Ahold Delhaize, Walmart Inc.
WMT,
and Dollar General Corp.
DG,
have grown margins by 22%, 4%, 1% and 2%, respectively in the same period. Critics of the Kroger/Albertsons tie-up have argued that the combined entity was more likely to raise prices, especially after food companies enjoyed record profits during the pandemic thanks to their pricing power. To be sure, Kroger and Albertsons are facing obstacles to their deal, not least of which is persuading regulators that the merger will increase competition even as it further consolidates the market. Kroger’s stock was not yet active premarket.
