Grocery stores have long been the lifeblood of our local communities. These stores provide meat and produce for our families. And perhaps just as important, they are a place to get your first job, to socialize, and to feel a sense of community in an increasingly digital world.
This is all in danger.
Huge multinational discount chains and dot-com conglomerates have become dominant grocery businesses, threatening to push out traditional supermarkets. They have deep pockets from other lines of business and global reach to offer prices that are hard for America’s grocers to compete with. Supermarket grocers have seen their market share steadily decline for more than 20 years. Ten of the top 15 U.S. grocers were supermarket grocers 20 years ago; today, 10 of the top 15 are national/discount stores, which have 63% of our national grocery market share.
Competition is good for business and consumers, but there must be a level playing field. America’s supermarket grocers need to have the option to team and get bigger in order to better compete, drive down prices and protect good-paying, American union jobs.
The proposed merger between Kroger and Albertsons — the owners of Fred Meyer and Safeway, respectively — will do just that.
The COVID-19 pandemic taught us that over-reliance on foreign ownership, or a few national sources of our essential commodities, is extremely dangerous. Germany-based Lidl and Aldi are making significant inroads in American grocery. They are now Europe’s largest grocers. In a crisis, who will they take care of first? Closer to home, New Seasons, based in Portland, is now owned by a Korean grocer with chains in California and Seattle. Again, in a crisis, who will they take care of first?
Union jobs are at risk, too, if the grocery playing field is left to the non-union national grocers like Walmart, Costco, Target and Amazon. In Oregon, union grocers lost more than 30 stores in the last 10 years and almost 20% of the market. Kroger has committed to zero store closures and zero front-line job losses with the proposed merger. While large multinational retailers are non-union, Kroger has a proven history of protecting union workers, adding 119,000 union jobs between 2012 and 2022.
The obvious question is how can a merger actually save front-line jobs? After all, there are some areas where Kroger and Albertsons both have stores. You wouldn’t keep both, right? Right! To protect jobs and build more solid U.S. based competition, Kroger has secured a deal with C&S Wholesale Grocers in which C&S has agreed to purchase those stores. The transaction will add over 400 new locations to C&S’ operations, which already provides wholesale support to more than 7,500 locations, including commissaries around the country.
The higher prices at many grocery stores since COVID have wreaked havoc on family budgets. This merger will allow Kroger to continue to reduce prices by investing in more energy-efficient infrastructure and doing more to streamline its distribution and inventory management systems. Kroger has committed to invest $500 million in lower prices after the merger closes. This will help them better compete, and more importantly for consumers, lower post-Covid sky-high grocery bills!
At its core, this merger of Kroger and Albertsons represents a renewed commitment to local communities that you don’t see from the multinational grocers. I raised my family on an organic farm in Canby. I believe in access to local, high-quality foods, and American supermarkets like Kroger are best positioned to deliver them. Kroger has committed to increasing locally sourced products by 10% following merger approval.
I have also seen the companies’ community work up close. I am deeply grateful for the Albertsons Co. Foundation’s community partnerships, like the one in Multnomah County that gives grocery gift cards to foster children. Kroger and Albertsons understand their responsibility to our local communities.
The world has changed. While serving in Congress, I saw firsthand how competition from foreign state-owned enterprises and multinational corporations make it tough for American businesses to compete on a level playing field. Sometimes this means American businesses must get bigger and stronger, too.
By combining forces, Kroger and Albertsons seek to keep prices competitive, bolster union jobs, protect access to fresh foods, and help change the industry for the better, while standing up to much larger grocery competitors. It will prevent America’s supermarkets from meeting the same unfortunate fate as our department stores.
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