Growing up in a small town had its advantages. No matter how bad I was at a given sport, I still had a chance to play because they needed enough kids to field a team. If my parents needed a babysitter, there were plenty of aunts, uncles and relatives around. When the summer’s hit movie came to the local theater, it was pretty easy to get an opening night ticket.
But there were some challenges as well. The only fast food option in town was Pizza Hut. Main Street in Yuma wasn’t nearly long enough to kill an hour with friends driving up and down the street without getting dizzy. And if you didn’t get baby food or a gallon of milk by 6 p.m. on Sunday, you were out of luck when they closed. There were no other options.
Time and demand have a way of forcing commerce to yield to consumers in a market economy. Today, that same small town has multiple options to buy milk, pick up fresh produce or meat, and, yes, even do so later than 9 p.m. This same proliferation of grocery opportunity isn’t just a small-town phenomenon. In a hypercompetitive world with delivery services a click away, there are more options for consumers than ever before. Those that fail to meet consumer demand will fade away and those that rise to meet the consumer where they are will thrive.
Which brings me to the current kitchen table debate. In the intricate dance of commerce, mergers often elicit a spectrum of opinions, and the proposed union between Albertsons and Kroger is no exception. As discussions surrounding this potential collaboration unfold, it is essential to scrutinize the entire context of the debate and look to the consumer benefit and the benefit of resources being spent, supposedly on behalf of the consumer, to look out for “their best interest.”
In a state grappling with various challenges, from rising crime rates to immigration and homelessness, obsessive resource allocation directed toward the intricacies of a grocery store merger seems misguided. While ensuring fair business practices is crucial, the allocation of time and energy must be proportional to the societal impact of the life and death issues currently going unaddressed.
Grocery stores are personal – they are an extension of the home in many respects. It’s the place we go to in preparation for birthdays and anniversary celebrations, to get advice on treating a cold and to fill a prescription, it’s sometimes a daily routine that can provide respite and pleasure at the end of a long day’s work. But consumers know best; that is why the options for purchasing goods have increased, not decreased over the years.
The proposed merger, backed by a comprehensive divestiture plan with C&S Wholesale Grocers, promises substantial benefits for the community and the workforce. It is imperative to consider whether efforts by the Colorado Attorney General’s office could be more effectively directed toward addressing the rising tide of crime rather than delving into the nuances of a business transaction.
Adding a layer of complexity to this debate is the reality that Albertsons was already on the market before Kroger extended its offer. This prompts a theoretical question: What lies ahead for Albertsons if the proposed merger fails to materialize? In the volatile landscape of corporate dealings, the fate of a company in transition can be precarious. The uncertainty surrounding Albertsons’ future highlights the delicate balance between market forces and the need for business stability.
The seismic shifts that have reshaped the American grocery retail landscape over the past decade must be acknowledged. The top 15 grocers, including industry behemoths Amazon, Costco and Walmart, have extended their reach far beyond traditional supermarkets. Online grocery shopping has accelerated, with only 44% of Americans now primarily purchasing groceries at physical stores, down from 63% before the onset of the pandemic.
Even if the proposed Kroger-Albertsons merger progresses, it would still fall significantly short of reaching half of Costco’s market value and would represent only 8% of nationwide sales, according to the International Center for Law and Economics.
As with any major business merger, there are concerns, but Kroger and Albertsons have stated their commitment to retaining and valuing employees. The comprehensive divestiture plan with C&S Wholesale Grocers promises that all frontline associates remain employed, and existing collective bargaining agreements, including industry-leading health care and pension benefits, are maintained.
Competition remains a driving force that historically enhances consumer benefit. The merger between Kroger and Albertsons could foster healthy competition, providing consumers with more choices and potentially driving improvements in pricing, service, and product offerings. Embracing this change aligns with the spirit of a free-market economy that has historically fueled innovation and improved consumer experiences.
Cory Gardner is a fifth-generation Coloradan. He served as a U.S. senator, a U.S. representative and a Colorado state representative. He contributes to The Colorado Sun, a nonpartisan news organization based in Denver.
