Dive Brief:
- Kroger announced Tuesday it plans to lower prices following its proposed merger with Albertsons.
- The grocer noted that this strategy is “not new” for the company as it has lowered prices after the approval of previous mergers.
- This pledge comes as the merger receives more pushback from union groups and lawmakers and as it seeks regulatory approval.
Dive Insight:
The promise of lower prices and an improved customer experience is Kroger’s latest effort to ease public concerns regarding its proposed merger with Albertsons. Throughout last year, the grocer made other pledges to sweeten the deal, including ones to expand employee resources and boost its local assortment.
This latest strategy demonstrates how Kroger “consistently” lowers prices post-mergers, reduces profits to ensure access to affordable groceries, improves the customer experience and becomes more competitive, according to the announcement.
Kroger noted it invested more than $125 million to lower prices at Harris Teeter in 2014 and over $100 million to lower prices at Roundy’s in 2016 after both of those mergers closed.
If the deal with Albertsons goes through, Kroger stated it would invest $500 million to lower prices “starting day one following the transaction close” as well as invest $1.3 billion to improve Albertsons locations.
The promise to lower prices will enable Kroger and Albertsons to bring in more customers, create a more seamless and personalized shopping experience and expand its assortment of fresh, affordable products, according to the press release. Kroger added that these initiatives will increase revenue and allow it to invest in store improvements as well as wages and benefits for its employees.
Kroger and Albertsons have faced significant pushback since announcing the merger in October 2022.
The grocers kicked off 2024 announcing they had pushed back the timeline for the deal as they are “continuing dialogue” with the Federal Trade Commission. That same day, Washington state Attorney General Bob Ferguson filed a lawsuit seeking to prevent the grocers from combining.
