As a major merger deal between grocery giants Kroger and Albertsons faces scrutiny from a key U.S. Senate subcommittee, government watchdog Accountable.US released a new analysis challenging claims from the companies that the merger will lead to lower costs. If recent history is any judge, Kroger and Albertsons cannot be counted on to prioritize struggling consumers over their wealthy investors. Accountable.US found both companies have enjoyed soaring profits and doled out huge shareholder payouts amid their decisions to jack up prices during the pandemic. The merger involves nearly 5,000 stores reaching about 85 million households across the U.S. – raising concerns for the 42 million Americans who said they could not afford enough food at the beginning of 2022.
Even before this potential merger, the oligopoly of U.S. grocery giants has been needlessly nickel and diming working families – marking up prices over and over despite reporting huge profits. The industry chose to enrich a small group of investors with generous handouts rather than keep prices stable on everything from bread to baby formula. Even less competition under this proposed deal will only lead to more unfettered corporate greed at the expense of millions of consumers – and that’s why it deserves serious scrutiny from Congress.”
Accountable.US spokesperson Liz Zelnick
Before the merger deal, 60% of grocery sales have been concentrated among five food corporations, leading to growing criticism of the industry’s power to anti-competitively set prices amid continuing inflation. It is no wonder this deal has already spurred bipartisan objections from Sens. Warren, Sanders, and Lee, in addition to the United Food and Commercial Workers Union (UFCW).
A Kroger spokesperson recently brushed off price-gouging concerns raised by MarketWatch: “Our ability to deliver value to customers, communities and shareholders is rooted in our business model that emphasizes lowering prices to expand our customer base. […] We intend to build on this track record following our proposed merger with Albertsons and are committed to investing $500 million to reduce prices and $1.3 billion to enhance the customer experience.”
As MarketWatch notes: “In total, those investments would equal about half of what the company has given back to shareholders over the past 18 months.”
As we’ve been documenting for the last year, big-name corporations, especially in the food sector, have continually used the pandemic as an excuse to mark up prices for consumers well beyond the cost of doing business,” added Zelnick. “Why should these grocery giants be taken at their word that this merger will result in more responsible behavior? When faced with the option of passing their success onto working families in the form of lower prices, Big Food has chosen again and again to pad their profits instead.”
The new report follows Accountable.US’ previous research over the last several months on how clear pandemic profiteering and corporate greed from the big oil, meat packing, shipping, retail, clothing, food, trucking and railroad companies are making inflation/supply chain problems worse for everyday consumers.