FTC challenges Kroger-Albertsons merger, citing risks to consumer choice

the Federal Trade Commission argues that this merger would eliminate competition but Albertson and Kroger argue the merger will help them compete against stores like Costco and Walmart it's one of those things that really connects with almost everybody if the merger happens 124 grocery stores in Washington including this Safeway in Wedgewood would be sold to CNS Wholesale grocers but Tom guer points out that there's no guarantee they will keep these stores open well the analysis is that the value of the real estate is about 50% higher than the value of the stores that they're going to be buying so our fear is that they could just unload these properties just as a real estate investment never selling a can of beans or a gallon of milk the last major grocery store merger ended with closed stores leaving some neighborhoods without one the one about 3/4 of a mile North uh QFC was closed 4 three years ago so now Debbie wheeler shops this Safeway and Kiko van sand also forced to change stores when the store she used at the U Village shut down I come and probably shop here twice a week you know just to pick up various in things so yeah it's a full court press uh to protect workers and customers against this bad idea even if CNS wholesale grocers did decide to keep this store or others open there's no guarantee that it would still have a pharmacy the company operates and supports more than 7500 independent grocery stores but only one Pharmacy right now in Seattle Denise Whitaker Como news tonight Kroger and Albertson are defending their plan to merge companies the FTC has been pushing back against that plan claiming it would eliminate competition Mary n joins us here on the deep end tonight Mary this merger could leave one Community without a grocery store that's right Preston people in Wedgewood are fighting to keep their grocery store open and if that merger goes through a Safeway store in that area would be sold tonight I talked with Denise Whitaker about why the store a grocery stores say that this merger needs to happen yes the merger plan so the merger plans were announced two years ago in almost two years ago in 2022 but the FTC the Federal Trade Commission they don't want it to move forward because they say it's going to eliminate competition and we've learned throughout the course of the planning for this merger which stores would be sold and the Safeway here in Wedgewood is one of 100 24 stores in the state of Washington that would be sold to CNS wholesale grosser so you might think okay so what's a big deal but we've seen in other mergers where stores end up closing just because they're sold to a new company doesn't mean the new company will keep the store open or provide all the same services so this is the concern and as I've been out here today talking with Shoppers in this neighborhood they've already been forced to come to this store which now they love but because of their other stores having closed um Kiko Van Sant told me that the store that she used to go to was by the U Village and when it shut down she had to find a new store now she comes here and then Debbie wheeler told me that she used to go to a different store too until it was shut down so you know it's a lot for people to handle and again it may not just be that you have to move to a new store but it's the relationships uh that are interesting Mary and I would not have thought about that until I was talking with Tom Guyer who is with the Union um UFCW 3000 that represents grocery store workers and he pointed out to me and I'm sure you might realize this too we have greater relationships or see the people who work in our grocery stores more than almost anything else if you go to church once a week you're going to see your church Pals but you might come to the grocery store two or three times a week so it really is a big deal and especially for these workers nobody ever wants to see any local employe lose their jobs um and and a lot of these questions I mean there are no clear-cut answers it sounds like no the arguments started opening statement started today this case right now being heard in federal court in Portland and of course the companies that want to merge are arguing that they need to become stronger and better together in order to fight the competition that's coming from Superstores like Costco and Walmart but the unions the FTC others argue but it's only going to raise grocery prices even higher it may force a different selection it may put people out of work so there are lots of arguments on both sides of this in terms of competition good or bad and it's going to take about two weeks for this particular hearing to play out in courts and when you talk about that hearing in federal court in Portland um in two weeks that won't decide what's going to happen that's just one step is that correct well it could decide it could decide what would happen federally if the Federal Trade Commission wins Then I then it would stop the merger that's the end goal so it could end in that if like you say if there's no clear-cut ending and of course even if a decision is made either party can still appeal but there are other individual lawsuits from other states for instance our state is in its own lawsuit against this merger and that has a court hearing date in federal court in Seattle starting in midt so there are other court cases but certainly yes the two to three week long one in Portland will be the first to play out um you know aside from all of that people here in the Northwest were lucky to have so many different grocery stores and people have strong feelings about their Neighborhood Grocery Stores their Safeways QFC Fred Meyers so on so forth um a lot of people uh unhappy about the potential possibilities oh absolutely I mean again because they have a relationship with that store Andor the convenience Kiko Van Sant today when I was talking to her you know she was just leaving her quilting group and this store is on her way home so of course she doesn't want to go out of her way she wants to just get the few things that she needs and move along and it I think it is more so the relationships because the people who are working in your neighborhood grocery store are typically your neighbors as well and so you get to know them they're friendly and and they make a difference in your shopping experience most of the time all right Denise Whitaker we'll see how this all plays out thank you you got it so Mary Kroger says the merger is good for competition but I know a lot of people wondering who their biggest competitors are tonight it's not the Whole Foods it's not the Met market and the boutique grocery stores it's much bigger than that Kroger and Albertson's point to Costco and Walmart and they say the merger allows them to compete with those types of stores