You have likely heard that Kroger and Albertsons grocery chains are planning to merge their companies so that they can remain competitive in the grocery store sector. The merger was announced in October 2022, but the Federal Trade Commission (FTC) sued to stop it in February, saying the merger would limit competition. The way I see it, this merger will ensure cities like Elko don’t lose stores!
Initially, I was concerned about the merger. As Elko continues to grow, the last thing we need is to lose stores that are needed to support our growing population and the thousands of tourists who pass through our town on their way to outdoor adventures.
Already having fewer grocery stores than Las Vegas and other more populous cities, I feared we would see our already smaller number of grocery stores shrink further. According to the U.S. Department of Agriculture, 76 counties nationwide are without a single grocery store. I sure didn’t want Elko to be added to that list!
However, as a requirement for the merger, Kroger and Albertsons must divest (sell-off) some of their stores to another company to ensure that, per Kroger’s commitment, all existing stores remain open. Recently, Kroger and Albertsons released the list of stores they plan to sell. In Elko, the Albertsons on Idaho Street will be sold to C&S Wholesale Grocers when the merger goes through. C & S Wholesale Grocers is a solid choice with strong financial backing, ensuring some past pitfalls of grocery mergers are avoided and stores remain open.
C&S is a major player in the grocery sector. They have over $20 Billion in grocery sales and they are one of the largest private companies in the U.S. It is a family-owned company with a 104-year operating record. As an industry leader in wholesale grocery supply and supply chain solutions, C&S has a strong track record as a successful grocery retailer. They supply more than 7,500 independent supermarkets, chain stores, military bases, and institutions with over 100,000 different products.
Many of you may be wondering why Kroger and Albertsons are merging at all. It truly is a matter of survival in a very competitive sector.
Competition in the grocery sector was exasperated by the pandemic, as people began to order groceries online from national chains like Amazon and Walmart. Since the pandemic, businesses, especially in rural communities, have been at greater risk of closing their doors than ever before due to labor shortages, increased wages, high interest rates, and supply chain issues. Grocery stores are not exempt from these challenges.
The merger will bring economies of scale to our community. It will better equip Kroger to compete against Walmart, Amazon, and wholesale companies like Costco, ensuring they can stay in business. It will allow Kroger-Albertsons to buy in greater bulk for a better price, transferring savings to its customers.
This merger will also be good for our local farmers and ranchers. Kroger expects to see an increase in local products in its stores of 10%, which equates to at least 30 new local products in each store. This will allow local farmers to increase their reach, sales, and opportunities.
Recently the Attorney General of Ohio filed an amicus brief with a U.S. District Court, urging a federal court to toss the antitrust lawsuit brought by the FTC to block the merger. It’s unfortunate that our own Attorney General has done the opposite, joining forces with the FTC to try and halt this merger, saying it could hurt consumers.
If these chains don’t merge, I fear we will see grocery stores close, costing local jobs and creating food deserts for our residents.
John Ellison is an Elko resident, a small business owner, and the Senator-elect for District 19.
Comment
Comments