Kroger says it plans to lower prices following Albertsons merger
Amid concerns over a planned merger with Albertsons Cos., Cincinnati-based The Kroger Co. says it has released details showing how it lowered prices in previous mergers, while outlining how it plans to do so again.
"We believe the way to be America's best grocer is to provide great value by consistently lowering prices and offering more choices. When we do this, more customers shop with us and buy more groceries, which allows us to reinvest in even lower prices, a better shopping experience and higher wages," Kroger Chairman and CEO Rodney McMullen said in a news release. "We know this model works because we've been doing it successfully for many years, and this is exactly what this merger will bring customers — lower prices and more fresh, affordable choices."
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The retailer says it has invested to lower prices consistently since 2003, resulting in $5 billion in customer savings and providing more affordable products to families across the U.S. Kroger offered an analysis including more context and details about its investment. According to the release, it demonstrates that Kroger:
- Consistently lowered prices and improved the customer experience during previous mergers — Kroger said it invested more than $125 million to lower prices at Harris Teeter after its merger in 2014 and more than $100 million to lower prices at Roundy's after its merger in 2016. Additionally, Kroger invested $2.5 million and $2.4 million in capital per Harris Teeter and Roundy's store, respectively, to enhance the customer experience in the three years following each merger.
- Reduced profits to ensure groceries remained affordable for families across the country — Kroger said its ongoing work to lower prices in the last 20 years reduced its gross margin by 5%. Meanwhile, Amazon, Ahold Delhaize, Walmart and Dollar General have increased gross margins by 22%, 4%, 1% and 2%, respectively, during the same time period, according to the release.
- Made clear, consistent commitments to lower prices and improve the customer experience post-merger — Kroger said it will invest $500 million to lower prices following the merger with Albertsons starting Day 1 following the transaction close. Kroger said it also will invest $1.3 billion to improve Albertsons' stores following the merger, all to better serve customers.
- Will become more competitive and able to invest even more to support customers and over 700,000 associates by combining with Albertsons — Kroger said its merger with Albertsons will allow it to attract and retain more customers by lowering prices, creating a more seamless and personalized experience and expanding its selection of fresh, affordable food. By doing so, Kroger expects to grow revenues and drive additional investments in pricing and store improvements as well as wages and benefits.
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Kroger said its commitment to providing exceptional value to its customers through lower prices and expanded choices remains unwavering. With a track record of successfully implementing this strategy in previous mergers, the retailer is poised to continue this tradition with the proposed merger with Albertsons, the release said.
Kroger said that by investing in lowering prices and enhancing the customer experience, it not only ensures affordability for families across the U.S. but also strengthens its position as a leader in the grocery industry. Through this merger, Kroger said it anticipates further growth opportunities, enabling it to better serve its customers and support its associates while remaining dedicated to its core mission of delivering quality, affordability and convenience to communities nationwide.
