The Denver Post has a story about how Kroger CEO Rodney McMullen and Albertsons CEO Vivek Sankaran came to town to talk with the newspaper “to provide updates on the merger process. If successful, the deal would directly impact Coloradans – Kroger serves as the parent company of King Soopers, the state’s largest grocery store chain headquartered in Denver, while Safeway operates under Albertsons Companies Inc.”
In addition to the scrutiny that the proposed $24.6 billion deal is getting from federal regulators and legislators, as well as “unions and farmers fearful of the possible consequences, including job losses, the proliferation of food deserts and jumps in prices,” the merger “caused an immediate stink in Colorado. In December, Attorney General Phil Weiser declared that his office would lead a multi-state investigation into the deal. He provided an update in a Denver Post opinion column in March after surveying the opinions of different Colorado communities, saying residents remain ‘worried about whether their local grocery store will stay open, whether their jobs are at risk, whether food prices will rise, and more’.”
An excerpt from the Post story:
“The leaders remain steadfast in their commitment to seeing it through. ‘We’re where we thought we would be at this time in this process,’ McMullen told the Denver Post.
“They predict that the deal will close in early 2024, but neither would specify further on timing.
“The CEOs argue the merger would better position them to compete against rivals Walmart, Costco and Amazon – all of which didn’t immediately respond to a request for comment.
“Their industry’s competitive landscape has changed in recent years. A decade ago, 90% of Kroger’s conversations around business strategy focused on Walmart, McMullen said. This year, Walmart is discussed, but they also consider Amazon, dollar discount stores, restaurants and German chains Lidl and Aldi.
“The leaders aren’t letting the country’s uncertain economic forecast for 2023 hinder their merger plans either. McMullen referred to it as a ‘short-term’ condition, citing ‘faith in the U.S. that it’s gonna be better in five or 10 years.’
“With this deal, McMullen and Sankaran committed to creating jobs and lowering prices. ‘No frontline associate will lose their job,’ McMullen said. To consumers, he adds, ‘In my whole life, I’ve never ever thought about how to raise a price’.”
KC’s View:
The trip by McMullen and Sankaran to Denver, I’d guess, presages a growing effort by both CEOs to reclaim the narrative. I don’t think they can just trust that momentum will get them over the finish line, but rather have to get out there and make their case. They need numbers and they need anecdotes, and they need to tell the story forcefully.
The post Kroger, Albertsons CEOs Hit The Road To Lobby For Merger appeared first on MNB.
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