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Old 10-18-2022, 04:31 PM
 
Location: East Central Phoenix
8,040 posts, read 12,252,641 times
Reputation: 9831

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Quote:
Originally Posted by autism360 View Post
less competition is always bad for the consumer never forget this one simple fact
Very true on all levels. I've always liked the variety of supermarket chains here. If I can't find a particular item at Fry's, I can go to either Bashas', Safeway, or even Whole Foods in some cases to find what I need. When monopolies come into play, the choice for consumers is reduced due to limited competition. This is especially true with utility companies. I sure wish we had additional choices for our power besides APS & SRP, and having to be stuck with one or the other depending on where the lines are.
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Old 10-18-2022, 06:08 PM
 
Location: Arizona
6,131 posts, read 7,981,856 times
Reputation: 8272
There is no way this merger will be a good move for consumers. I used to work at the Safeway corporate office in Deer Valley. I was there during the Albertson's merger. The only Safeway people who benefitted from that were the executives who got the golden parachutes on their way out the door. Some of them unwillingly. Although to be fair, bonuses the first full year after the merger were very good, partly due to the positive impact divesting from some of the primo real estate that Safeway had owned. But you had to be at a certain level to be bonus-eligible.

I had no real insight into what was going on other then having a familiarity with the culture at the corporate level and an interest in the industry, so I followed it fairly closely. The "divestitures" agreed to with the FTC were pretty much a scam. They got rid of the worst-performing stores wherever they could, selling them to Haggen in many cases. Haggen's leadership was either clueless or was in on the scheme from the start (I suspect the latter). No retailer with a small regional footprint like Haggen had can sustain overnight growth where their number of stores grows tenfold in regions where they have no supply chains or logistics infrastructure. It was doomed from the start. And to make sure it was doomed, the newly-acquired Haggen stores raised prices to astronomical heights. No one who shopped there once would ever go back, if they didn't just walk out laughing the first time. Predictably, sales tanked and heads starting rolling at Haggen. Then came the stores closing.

The Anthem store was a poster child for this fiasco. It was one of the poorer-performing stores before the merger and was sold to Haggen. Haggen initially kept any of the store employees who wanted to stay, but when the store reopened as a Haggen it was an instant laughing stock because of the prices. Literally no one shopped there. I would rather have bought a gallon of overpriced milk at the CVS across the street than pay the Haggen prices. It was obvious the store was being set up to fail, which it did in spectacular fashion. All those poor former Safeway employees wound up laid off anyway. The store then sat vacant for over a year, dragging down the rest of the shopping center with it. Then along came Albertsons - as soon as the time period set by the FTC agreement expired - and re-opened the store as a Safeway again. Big plans for the store never materialized, including a planned gas station on the then-vacant space where Barro's Pizza now is. Why? Its still an underperforming store, as it gets killed by the larger and less expensive Fry's 5 minutes away. So the gas station plans were a pipe dream. Eventually, Albertsons bought out Haggen lock, stock and barrel - including its original pre-merger stores in the Pacific NW, and another group of execs got golden parachutes (just not the sacrificial lambs whose heads rolled during the debacle).

Internally, layoffs throughout both of the former companies (Safeway and Albertsons) were frequent as the two companies came together. Most of us (but not all) in IT were spared because prior to the merger Albertsons outsourced its IT to Supervalu, and the combined company wanted out of the deal so IT actually grew to support the larger organization. But a lot of people in other departments lost their jobs. Expect this to happen again if the Kroger deal goes through, only this time IT will not be safe and since Kroger is actually buying Albertsons (unlike the first time, which really was more of a merger overseen by VC), my money would be on the large IT presence in Phoenix and Pleasanton getting the axe. They already have begun moving their data center infrastructure out of the big data center Safeway built in Deer Valley to cloud providers.

I suspect Anthem will go back to only having one real supermarket again, which impacts people in the underserved areas to the north like parts of New River and Black Canyon City where there are no stores at all. The overriding theme at Safeway pre-merger was 'maximizing shareholder value' and that was prioritized over what was best for the consumer and the employee. It got a little better after the merger since the combined company was privately-held, and to his credit Bob Miller was a CEO who cared more about his customers and his employees than the former Safeway CEO Robert Edwards did. But since the new company will be public, 'maximizing shareholder value' will be the rule again, and for some reason the execs who follow that religion don't realize that happy customers and happy employees will do more to build a business than layoffs, benefits cuts and price increases ever will. The tale that this combined gigantic company will somehow benefit consumers is just more corporate spin, something Safeway and Albertsons were always very proficient in.
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Old 10-18-2022, 10:41 PM
 
Location: Phoenix
962 posts, read 468,849 times
Reputation: 1340
Quote:
Originally Posted by U no me View Post
I saw this article which supports Kroger's expansion:



I think that's an interesting point. Maybe there's a different kind of monopoly (of everything) which trivializes food in a different way? I think Kroger has trivialized food in it's own vertical/niche market (gobbling up regional brands, turning them into Cincinnati shells of their former selves; remote leadership creating a race to the bottom within it's own market. Walmart without the "everything else?").

But, that article points to a real problem: "Monopolies of everything" (horizontal markets) trivializing food as a "teaser" to get you in the door and buy other things; dominating a larger market with loss-leader food regardless of the long-term consequences of driving grocery stores out of business. The article talks like it's inevitable anyway, and the Kroger/Safe-bertsons merger is just a necessary step to get there. (If we don't do it, we capitulate to the horizontal markets using food as a lure.).

I dispute the assertion that Kroger did everything right. If they're still doomed anyway (as the article implies), the implication is that Kroger should have got into the "everything" business too. Fry's tried that with the "Marketplace" stores. It didn't work (they didn't "do everything right"). They couldn't compete against the "everything" giants who got into grocery to push "everything." Maybe the real problem is that we need to assess whether these "everything" giants are monopolies in their broader influence? Should food be treated like an iPod? Is that mindset something to "compete" for? Would Fry's be throwing in the towel now if Kroger hadn't bought them in their own pursuit of trivializing food as an empire? Maybe Kroger's predicament is a result of monopolizing grocery as it has? Maybe smaller, locally-managed stores would be better competition against the horizontal markets prostituting food?

I can feel sympathetic to what Kroger is facing. But, the article says they're doomed anyway. The question is whether we accept it now or later. I'd say "now." Trivializing food as a bargaining chip doesn't seem to be working out well. Maybe smaller is better? Maybe the answer is to break up Kroger instead of enlarge it when the article says they can't compete anyway?

Of course the financial press is in favor. They never saw a merger they didn't like.

The Amazon/Walmart competition stuff is a BS industry talking point. For a business in jeopardy, they sure have been raking in plenty of profits. And their profitability is rapidly increasing. Go back to my post #15 in this thread (page 2) and look at the numbers.
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Old 10-19-2022, 07:26 AM
 
50 posts, read 48,715 times
Reputation: 72
Default Kroger faces Senate Judiciary Hearings (November)

Quote:
The planned $25 billion Kroger Co. acquisition of Albertsons Cos. will face U.S. Senate hearings over antitrust concerns, according to published reports. The Senate will hold hearings next month on the acquisition, Bloomberg News reported.

Minnesota Sen. Amy Klobuchar and Utah Sen. Mike Lee, said Tuesday they have “serious concerns about the proposed transaction” and would hold a Senate Judiciary Committee hearing to examine the acquisition, Bloomberg reported. ... Klobuchar [and two others] asked the U.S. Federal Trade Commission, which examines antitrust issues and has to give approval for the deal to be completed, to take a close look at the transaction, Bloomberg News reported. ... “The grocery industry is essential to daily life, and Americans need the benefits that robust competition bring,” they wrote in the letter.

“We would expect this potential merger to receive a lot of backlash/skepticism that it helps the consumer, particularly since this is in the food industry, which has been plagued by inflation to the consumer,” Kevin Gade, COO and portfolio manager at downtown-based Bahl & Gaynor Investment Counsel, told me last week. “And current mergers are taking longer due to a stricter FTC, so if the two entities are serious about this merger they will need to be prepared to fight this legally for what could be a long period of time.” -- BizJournal: Kroger-Albertsons deal to face U.S. Senate antitrust hearings
If anyone wants to contact the committee members (for or against), this page is the starting place. Click on a member's "official website" and there should be a "contact me."

I'm pretty jaded & believe the hearing is just an opportunity to raise money from the industry interests (for or against). Individual contacts (for or against) are probably useless. (I hope I'm not violating the "no politics" rule. If my post is deleted, I'll understand.).
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Old 10-19-2022, 07:49 AM
 
50 posts, read 48,715 times
Reputation: 72
Default BizJournal: What the Kroger-Albertsons merger could mean to the Valley's ultra-competitive grocery market

Another article from Phoenix BizJournal:

Quote:
The Phoenix area is the fourth largest market for Kroger with around 100 Fry’s Food Stores locations around the Valley, according to Kroger's 2021 annual fact book. Arizona is the fifth largest state for Albertsons operations – with a total of 134 stores in the state and about 75 in the Valley, according to Albertsons latest annual report.

According to the latest report from industry tracker Chain Store Guide, Fry’s owns 26.67% of the Valley’s market share. Safeway was in fourth place with 9.73% of the market share and Albertsons has another 4.06%.

Both companies see Walmart as a key competitor. In the Valley, there are 47 Walmart locations and the Arkansas-based company has a market share of about 19.37%.

In addition, Kroger and Albertsons have a significant corporate presence in the Valley. Fry’s has a headquarters in Tolleson and there is a Safeway office in North Phoenix. Kroger is developing a robot-operated distribution center in Phoenix and has a dairy in the West Valley. It is unclear yet what the combined operations of the two companies will mean for corporate or nonstore employees of Fry’s and Albertsons in the Valley.

Fry's and Safeway are also growing their brands in the Valley. The Business Journal has recently reported on several new grocery-anchored developments underworks that will include new Fry's or Safeway stores including in north Phoenix, Gilbert, Surprise, Queen Creek and Peoria. The company has not addressed what will happen to stores in development if the merger is approved. -- Bizjournal: What the Kroger-Albertsons merger could mean to the Valley, an ultra-competitive grocery market
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Old 10-19-2022, 05:46 PM
 
Location: Arizona
743 posts, read 874,788 times
Reputation: 2139
Quote:
Originally Posted by grmi66 View Post
I live in Oro Valley now. There is a very nice Fry's Marketplace on Tangerine and Thornydale where I do the bulk of my shopping. It's probably the nicest Fry's in town.
I mentioned that one in my post along with the other Frys Marketplace south of Tucson in Sahuarita. Frys built the one near Saddlebrooke to cater to that demographic. The uppity-ups that complain about having to drive 20 mins to Costco on Thornydale and tell the clerks they should build a Costco in Saddlebrooke! Oh brother, the entitlement!! I've been to Saddlebrooke and the homes are nice, but nothing special. Just a bunch of cookie cutter homes way out in a master planned golf course community. The complainers remind me of a time when I was in the checkout at the Safeway on I. School/Litchfield road and the customer kept telling the cashier "well I'm from Palm Valley" blah blah. Like she cares.

As far as your comment regarding Frys giving "the neighborhood the store it deserves", I agree with that. Unfortunately there aren't any Fry's where I live and I have to drive into town. The closest one is in a marginal neighborhood. It's just easier to drive to Sprouts or Safeway and make 2 trips to get what I need. I would love to see one of their current stores remodeled into a Frys Marketplace. That would be great. I think they did remodel the one way down south on Houghton, but that's a 40 min. drive.
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Old 10-19-2022, 06:05 PM
 
Location: Prescott Valley, AZ
3,407 posts, read 4,626,567 times
Reputation: 3919
I can see this affecting rural areas the most, especially if smaller towns in AZ only have two grocery stores such as a Safeway and Fry's. Will they close the other one or just rebrand it to another Fry's and remodel the former store into a Fry's Marketplace? Those are questions that will have to be answered in 2024 once the merge is finalized.
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Old 10-19-2022, 06:57 PM
 
2,375 posts, read 2,705,000 times
Reputation: 2761
Quote:
Originally Posted by U no me View Post
New York Times: Supermarket Giants Kroger and Albertsons Announce Plan to Merge in $25 Billion Deal

I'm not looking forward to this. I saw Fry's, Smiths, Smittys turn into caricatures of their former selves as Kroger took them over. Albertsons & Safeway since merged into one. Now they're going to join the empire. This doesn't seem like it will be good.

I guess one positive is that Kroger's leveraged buying power will result in lower prices for Albertsons customers. But, if they wanted that, they could go to one of the zillion Kroger-Fry's stores. To me, the problem is that the Kroger mindset will bring Albertsons down to the same level Frys, Smiths & Smittys were.

I've had some profoundly bad experiences at Fry's. It seems like a very political environment where nobody in management can "rock the boat." A store's produce department was remolded. The result was bright spotlights one of which was shining directly on the russet potatoes. They would turn green as anyone would expect. Green potatoes are toxic & can make you sick. It was like a Three Stooges skit getting anyone to own this matter. The Produce guy was "I just stock the shelves." The store manager said "I already pushed it up the chain, and nothing happened." The facilities guy said "they're LED lights that won't make potatoes turn green. I don't care if they're turning green, I was told they won't."

The store manager even told me one of the customers worked for the county health department and had unofficially raised the topic. Even that couldn't get anyone do anything.

I had to send a letter to the CEO of Kroger resulting in the district manager's assistant contacting me and talking in circles about it (but, don't write the CEO again). The spot light was quickly pointed elsewhere.

The impression I got was that Kroger's management environment is "all downhill" and people make themselves unpopular by raising real issues. My experience made me wonder what else is wrong there that we don't see. Like, putting refrigerated/frozen things back on the shelf that were left unattended for hours(?). There's clearly a culture there of "don't bring up problems." So, I can see the hourly guy faced with explaining why he "wrecked" (shrink'ed) something, or just put it back on the shelf and let it be someone else's problem (the customer who buys it and gets sick).

An even larger monopoly does not look good to me.
I'm so glad you posted this. Thank you.

I hope that some here will feel strongly enough to weigh in to the appropriate agencies to try to spot the merger.
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Old 10-21-2022, 02:03 PM
 
Location: Phoenix
962 posts, read 468,849 times
Reputation: 1340
Good article here:

https://www.commondreams.org/views/2...ket-superpower

I've mentioned a couple times already that what most news stories are putting out there is mostly a parroting of industry taking points and Wall St. cheerleaders. The focus of this article is on the behind-the-scenes weasel stuff the media isn't reporting.

Quote:
Sometimes what is absent is as important or more important than what is present. And sometimes the easiest form of hackery that any writer could fall into is hackery by omission, failing to dig quite deep enough to uncover the whole picture.
To start, let's talk about the details of the proposed merger. The simple version is Kroger will buy Albertsons for around $20 billion while also taking on Albertsons' $5 billion in debt. This has generally been reported as a purchase price of roughly $25 billion. Technically more complicated, but a fair description.

Where it gets trickier is below the headline figures.
... one provision is a $4 billion dollar dividend to be paid out by Albertsons this coming Monday. That is one-fifth of the price Kroger will pay to acquire the company. It's 30% of the firm's entire market capitalization of roughly $15 billion. And this is a dividend, not a stock buyback. With a dividend, the existing stockholders will get a huge payday off the bat. As my CEPR colleague Eileen Appelbaum pointed out, this is draining the company's coffers in a way that could deliberately make them less competitive.
...this dividend could well jeopardize Albertsons' financial health, which then opens up the possibility that Kroger can argue to the Federal Trade Commission (FTC) that the merger has to go through or the second largest American supermarket chain will fail, potentially causing food supply havoc.
Quote:
The biggest payday from the dividend will go to Cerberus Capital Management...
...Cerberus owns 29% of Albertsons, which means they stand to get around $1.16 billion. And, again, they get that payout in a couple of days, regardless of the end result of the merger. It's not like they won't already make a killing if the sale goes through. As Forbes reported, Cerberus will get $7.1 billion if the sale goes through.
...Albertsons is about to ship off nearly a third of its market cap to line Wall Street pockets in a dividend that may well bankrupt the company, but the merger is being treated as a run-of-the-mill transaction. The divestiture details are troubling and warrant far more scrutiny from major outlets.
Don't want to quote the whole thing here. There are also details about the proposed divestiture of some stores and how that is probably a bit shady as well.
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Old 10-22-2022, 09:28 AM
 
Location: Sun City West, Arizona
50,757 posts, read 24,253,304 times
Reputation: 32902
Quote:
Originally Posted by FlurryCat View Post
Good article here:

https://www.commondreams.org/views/2...ket-superpower

I've mentioned a couple times already that what most news stories are putting out there is mostly a parroting of industry taking points and Wall St. cheerleaders. The focus of this article is on the behind-the-scenes weasel stuff the media isn't reporting.

Don't want to quote the whole thing here. There are also details about the proposed divestiture of some stores and how that is probably a bit shady as well.
I had no luck finding out a thing about the source group of that article, so I can't judge the quality of their reporting.
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