Kroger and Albertsons have remained optimistic that their proposed $24.6 billion merger will close in 2024, but recent comments from the head of the Federal Trade Commission reiterating the agency’s intensified antitrust scrutiny indicate the deal could have a tough time getting across the finish line.

Speaking on Wednesday at one of the Nevada attorney general’s public listening sessions about the proposed deal, FTC Chair Lina Khan said she thinks promises made by companies in merger proposals should be viewed with a heavy dose of skepticism, according to local news station KTNV. 

"Historically, enforcers sometimes have allowed mergers to go through and accept those promises and commitments. But historically, it’s been very difficult to actually enforce them," Khan reportedly said. “Once you allow the merger to go through, the competition that's structurally existing in the market has gone.”

Khan continued: “I think we always want to make sure we’re applying the skepticism that’s warranted when firms are saying allow us to merge and eliminate the competition. I think enforcers have been burned by that. Communities have been burned by that."

After the session, Khan told local news station KLAS-TV that regulators should “ensure that if there are promises made, that there are ways to enforce those promises so that you aren’t burned.” In that interview, Khan also noted that some measures meant to preserve competition that the FTC has accepted in past merger reviews have failed, adding that regulators “have been unlikely to actually follow through” on companies’ commitments. 

These statements mirror previous comments Khan has made about how larger mergers can potentially impact consumers. Khan has in the past criticized the agency’s response to Albertsons’ acquisition of Safeway, which saw small Northwest grocery chain Haggen buy close to 150 divested stores but then go bankrupt months later, resulting in Albertsons buying back most of those stores.

Khan’s comments came as the FTC and the Department of Justice look to update the process they follow in assessing mergers and acquisitions. The agencies have been gathering comments from the public on a draft of revised guidelines released in July that “address the many ways mergers can weaken competition, harming consumers, workers, and businesses.” The comment period closes on Monday, setting the stage for the agencies to finalize the guidelines.

Along with the antitrust scrutiny from the FTC, Kroger and Albertsons are also facing investigations into the potential impacts of their merger aspirations from at least 17 states, including Idaho, Nevada and Arizona. Democratic officials from seven states — Colorado, Arizona, Maine, Minnesota, New Mexico, Rhode Island and Vermont — have asked the FTC to oppose the acquisition. 

Analysts have recently pegged Kroger and Albertsons’ chance of prevailing in their effort to merge at about 50%, underscoring the uncertainty the companies face. The question now is whether the glass is half full — or half empty. 

In case you missed it

Albertsons upgrades digital meal planning tool

The grocer has added new features to its shoppable Meal Plans and Recipes tool, including a budget tracker and a hands-free cooking mode, according to a Thursday announcement.

The budget tracker enables shoppers to specify a weekly budget, total number of meals and total number of servings before selecting a recipe. As more recipes are added to the Meal Plan tool, the cost of ingredients is deducted from the overall budget, allowing users to see the total meal price and cost per serving. The app’s Cooking Mode offers a hands-free experience to turn the page of a recipe as well as a built-in timer. 

Cities consider opening their own grocery stores

In an effort to combat food deserts, two U.S. cities are seeking to open city-owned grocery stores, according to local news reports. On Monday, Hartford, Connecticut’s city council voted to approve a resolution that calls on the city’s director of development services to hire an outside firm to research the operating costs of a supermarket for profit, on a break-even basis or at a loss, the Hartford Courant reported Wednesday. 

Chicago Mayor Brandon Johnson is exploring a similar possibility, announcing a partnership with the Economic Security Project, according to local news reports. A feasibility study is in the works, though there is no specified timeline for completing it, the Chicago Tribune reported.  

Giant Food expands loyalty program to the pharmacy

The grocer’s Flexible Rewards program now offers rewards for pharmacy purchases, allowing members to earn points through eligible transactions in that department, including new prescriptions, prescription transfers, prescription refills and immunizations, according to a Tuesday press release.

Number of the week: 3%

That’s the annual rate at which food-at-home prices increased in August, according to inflation data released Wednesday by the U.S. Bureau of Labor Statistics. The figure was down from 3.6% the month before, continuing a multi-month string of declines in grocery inflation that began last September.

What’s ahead

Groceryshop takes the stage

Grocery industry leaders gather in Las Vegas next week for the sector’s most prominent technology and innovation conference. Grocery Dive reporter Sam Silverstein will be on-site to cover the event. Make sure to flag Sam down if you see him!

Impulse find

Tackling tailgate hosting

Grocers are kicking off the 2023-2024 NFL season with game-watching food essentials. 

Shoppers can now purchase Publix’s famous Pub subs themed around their favorite NFL teams, the Florida grocer announced earlier this month. The subs include the Tampa Bay Buccaneers’ “Aye aye, matey” sub, a take on the classic chicken tender sandwich; the Jacksonville Jaguars' “On the hunt” barbecue sub; the Atlanta Falcons’ “Flying the coop,” which adds peaches to Publix’s chicken tenders; and the Miami Dolphins’ “Swimming toward the end zone” spin on a Cuban sub. 

Kroger also won’t let its customers fumble this year’s tailgating festivities. 

The grocer shared tailgating tips along with launching a new Doritos flavor exclusive to its stores — the Late Night Loaded Taco — according to a Thursday announcement. Kroger is also providing NFL fans with easy make-ahead recipes, grill food classics, snacks and beverages recommendations and convenience items from its deli and bakery section. 

we're not saying this tweet helped bring back Doritos Late Night Loaded Taco to Kroger, but we're not NOT saying that... https://t.co/qTsdxCojHf

— Doritos (@Doritos) August 22, 2023