BoiseDev – which serves Albertsons’ corporate hometown – has a critical opinion piece about a recent pronouncement by Kroger CEO Rodney McMullen that the plan is to add more local products to stores – if the $24.6 billion acquisition of Albertsons is approved by federal regulators.
Here’s how BoiseDev frames the issue:
“Last month, Kroger put out a news release saying if the deal goes through, it would slightly increase the number of local products it stocks.
“The company said it would boost local products in each store by about ten percent – or 30 new items on average. That indicates stores currently stock about 300 products they claim are made locally.
“‘It’s just one extension of something that’s really been important to Albertsons and really been important to us, is how do you identify local products that the customer is going to love but they may or may not know about,’ said McMullen.
“By comparison, BoiseDev asked Josh Davis, the owner of JD’s Bodega, how many local products his store stocks. He said they carry nearly 300 different items from dozens of vendors. The bodega measures about 2,000 square feet, as compared to 150,000 square feet for a typical Fred Meyer.”
BoiseDev goes on:
“Additionally, we asked Kroger if they’d keep the pledge to add the new local products if the deal doesn’t go through. They didn’t respond.
“It’s not the first time Kroger has sought — and received — attention for a promise related to the merger. It has repeatedly said it would cut prices by $500 million if the deal is approved. A BoiseDev analysis shows that would save the average shopper a penny or two per trip.”
KC’s View:
For the record, I asked the same question immediately after kroger made the local products promise – if it is good business to be more local, why wait until the FTC approves the deal. Do it now. Do it bigger.
I’m sure there is a Kroger response to the BoiseDev observations and analysis. But this is a good example of how, if Kroger and Albertsons are not careful, they can lose control of the narrative. In this case, their claims are being framed as being largely cosmetic and illusory.
The bet here is that this is similar to the rationale that the FTC will use to try to block the deal. And then it will be up to Kroger, Albertsons and an army of litigators to persuade the courts that the FTC is wrong.
The post Questions Raised About Kroger’s Post-Deal Claims appeared first on MNB.
View Original Article
