Not that long ago, I would have said to allow the free market to decide if a merger or acquisition was valuable for the consumer. However, in the era where massive multinational corporations, investment groups and financial institutions have now used corporatism to merge their interests with government, the massive multinationals need scrutiny.
Two major food retailers, Kroger and Albertsons, have announced their intent to merge into one massive company in a deal valued at $24.6 billion. The majority stakeholders in Kroger are institutional investors Vanguard ($3.72 billion/11.29%) and Blackrock ($3.02 billion/ 9.17%). The majority stakeholder in Albertsons is institutional investment group Cerberus ($3.90 billion/28.54%).
In the past few years, food has surfaced as a growing national security issue. Foreign companies and large multinationals continue to expand their control over U.S. farm production and export U.S. farm products (Big Ag). A major retail level move like the merger of Kroger and Albertsons creates a weaker competitive environment and gives a larger potential footprint to price control.
CBS – […] Together, the companies will have more than 710,000 workers and operate nearly 5,000 stores, along with roughly 4,000 pharmacies. Kroger, based in Cincinnati, Ohio, operates 2,800 stores in 35 states, including brands like Ralphs, Smith’s and Harris Teeter. Alberstons, based in Boise, Idaho, operates 2,220 stores in 34 states, including brands like Safeway, Jewel Osco and Shaw’s.
“Albertsons Cos. brings a complementary footprint and operates in several parts of the country with very few or no Kroger stores,” Kroger CEO Rodney McMullen, who will lead the expanded company, said in a statement.
Kroger will pay $34.10 for each share of Albertsons stock, a 19% premium from the closing price on Thursday. As part of the purchase, Albertsons will issue a cash dividend of up to $4 billion to its shareholders, which the companies said is expected to be about $6.85 per share. (read more)
Sometimes bigger is just bigger and more controlling, not better.
That said, with economic volitivity continuing to increase, the food sector is a safe harbor for massive investment shifts.
Now we will have a BIGGER woke corporation.
Exactly. Walmart has gone woke, so if the only other food operation goes woke, how do you boycott it?
You grow your own
Didn’t they try that in the Kingdom of RAZ? In the Summer of George?
The effort was, of course, unsuccessful.
Because they are dumb morons who live in a fantasy land. People are damned lazy!
I like the analysis of this article. However, I know Kroger a bit (did you know they are the largest buyer of fresh cut flowers?) and I can safely say the grocery business is brutal and most certainly not a get rich quick scheme. I suspect the merger has to do with scale and leverage for buying, like Walmart. But I agree – with BlackRock involved, and less so Vanguard, this may turn for the worse. The unions are probably worried. But it is a safe investment – gotta eat!
Kroger does something else that many large corporations do not do when they buy out competitors: they retain the old name and branding. Many grocers grew from humble beginnings in their area. When Kroger buys them, they mostly let them continue to do business as they have successfully done and apply Kroger’s huge supply structure and volume management to the new acquisition. You may have some of these in your community and not even realize that they are Kroger.
The Kroger Co. Family of Stores includes:
I know here in Middle TN when Kroger bought Harris Teeter, the name of the stores changed to Kroger. That may be because Kroger is a brand name here with many locations. But Harris Teeter has ceased to exist. I always thought Harris Teeter was a step above Kroger in terms of service/products/price.
We still have Harris Teeter in N. FL., but I will say, the quality doesn’t seem the same post Kroger buyout as it was pre.
We still have Harris Teeter in NC and SC but the stores themselves – with a few exceptions – have basically turned into Kroger stores. Not up to the old HT brand. I was living in Atlanta for 20 years and fell in love with Publix because the Kroger stores were nothing to get excited about. Then I moved back to Charlotte, NC and was happy to see an HT store right down the street from my neighborhood. I expected it to be like the HT I remembered. Sadly, it is just like the Kroger stores in Atlanta I didn’t like. Fortunately they opened a Publix about a mile from HT!
There are three HT’s on my small James Island in SC.
They are all nice stores but different sizes.
HT bought out Piggly Wiggly when the grandson crashed the business.
There are still a few Pigs left.
I shopped at Kroger’s in KY.
Agreed, HT’s are generally nicer.
They have the food that I eat on sale often.
Buy 2 get three free is a really good deal!
I miss that old Vegetable Bin store!
Same with Albertsons, Safeway, Vons, Pavilions, Jewel-Osco, Shaws, Star Markets, United, Haagen, Acme, etc.
All owned by BlackRock/Vanguard
Albertsons was spun off from Cerberus equity manager in an IPO, but Cerberus still controls 75% of the common shares.
It is definitely a turn for the worse for consumers, and more so for the general population. Blackrock and Vanguard are and have been moving towards WEF / One World Government objectives and not in the best interests of a nation founded on principles of individual freedoms and Christian values.
This acquisition means that globalists will increase their control of the food supply chain and will increasingly try to use that control to force more of the population to bend to the globalists will. Their actions must be monitored closely.
Food as a weapon of war?
That’s diabolical?
And an old tactic of oppression?
Wasn’t there a place that was starved by a tyrant?
Someplace? Um? Starts with a “U”? Um? Uh?
You know, the thing?
I think we need to look beyond today and tomorrow to the potential of what happens when only a very few grocery companies exist in this nation.
The control over the population will be massive.
Knowing that these woke companies are all working together to enable the WEF vision, shouldn’t we be asking the end game of this transaction?
If we invest in this, are we enabling our own destruction / enslavement??
Grow your own, live outside the system. We don’t need all the junk and crap they offer, we have been taught to want it.
Grow your own, preserve it.
The most valuable things in the world are seeds, your own water supply, fuel, a canner, canning jars, and to pay your property tax.
I am going to have a problem growing my own wheat to process for flour to make bread.
Buy it from a local farmer, or mill. BlackRock doesn’t own these people, and I am sure they could with the cash right now http://atkinsonmilling.com/
Another one https://www.janiesmill.com/collections/shop
Yeah… in 2012 my company purchased a major competitor for $600M and low and behold the SEC came in put the brakes on… Unions were involved you see. Our leadership tried to fight and judges eventually threatened them; blackmailed them, really. Isn’t it funny when billions(not millions) are involved and no judges care? Not.
Everyone has a price
These days anybody with enough money can pay a brace of high i.q. mendacious lawyers to say anything about anything. The well-paid counselor can twist precedent and a greasy judge can use the cleverly argued “precendents” to cook the goose of any offhand jamoke who gets himself crosswise with the wrong guy. These days, the law and the people who run it truly are an ass. Bit by bit, they are taking everything from us. They will not give it back. Everything they’ve taken from us must be taken from them–by us. Corporate government and and their cronies in FEDGOV bureaucracy are the enemies of our liberty and our way of life.
I know I sound like a broken record: Get out of the cities and move to a small town farming community. Buy overalls and boots and don’t be too proud to shovel manure.
This gives the food industry more power over the producers.
You don’t want to sell to us? Then you won’t sell at all…
Unless Blackrock et al own all of that too.
Not true. I shop at our local Pick’n Save (Kroger purchased in 2015) for the bare basics, and buy as much as I can from independent farms, ranches, etc. Much of it is not local – just this year I’ve purchased 100 lbs of wheat berries from a farm in Washington, 100 lbs of dent corn from Utah, 50 lbs of beans from Colorado, and various proteins from all over the country (the majority I get from local farmers), not to mention fruits and vegetables. Trying to support family-owned farms.
Yes, that means I’m buying in bulk (bigger initial price tag, cost per lb is significantly less), and processing it myself, prefer it that way. It’s certainly not the answer for everyone, but it can be done.
Amen!
Concentration of wealth and power, plain and simple. I can’t recall ever hearing a news report of a pending merger or acquisition arguing that it will not be good for the consumer. Nor can I remember any econ professor or analyst ever mention that the “free market” can be so free as to have the power to control all freedom.
Tyranny spreading like a California wildfire. Pretty soon everything will be burnt to the ground.
We must start cutting out the dead timber(politicians) and cutting firewalls(more politicians) and cleaning up the landscape to make sure the forest fires(government) don’t get to take control.
It is becoming more and more evident that the entire Western world is run by psychopaths.
Bad things always happen when good people do nothing. If we don’t stand for something, we will fall for anything. WAKE UP!!! As Eric Bowling says, “are you listening now?”
I work for Jewel-Osco.
The Albertson’s CEO, Vivek Sankaran, is a mega social justice, woke ass, so his ideas fit in perfect with Blackrock and ESG.
Does this mean Billy boy gates have some pics involvement since he’s buying massive amounts of farmland?
Kroger made a play to buy Publix in Florida in the early 1980’s. Publix said “no” to being bought out. Kroger told them they would crush them, put them out of business, they rue the day they rejected the offer.
Publix took the threat seriously like they needed to. They knew they could never compete on price alone with Kroger, their massive buying power couldn’t be matched. So they leaned into their strengths: service, cleanliness, quality. And priced the best they could, leaner margins than competitors.
Publix’s strategy worked. Kroger has been a small player in Florida. Publix is known for high customer service levels, friendly workers, clean stores, great deli offerings and a pleasurable shopping experience. A bit more expensive, many shop Aldi and BJ’s instead for large shopping lists. But not enough to dent Publix’s #1 position in Florida. They’ve even expanded into other nearby states.
How to beat Kroger and large competitors trying to destroy you 101.
Publix mangagement isn’t free of the system, even though they remain family-owned. All in on vaxxes, coerced employees, masks were mandated for staff even long after DeSantis ended local mandates. They play ball with the Wokesters, and give a lot of political donations to D’s and R’s. But better than Kroger. And them beating the tar out of Kroger after the boastful threat 40 years ago is sweet justice.
I may be wrong (and it won’t be the first) time that Publix stopped short of requiring the deathshot but did encourage it. I was told by a Publix employee they kept the mandate becuse such a high percentage of customers are frightened old people.
I’m a year round (not snow bird) part time resident of both Ohio and Florida.
Kroger is an institution in Cincinnati with older folks . While ago Kroger started requesting (not demanding) customers not CC inside. There was an uproar and Kroger’s backed down. Even behemoths can be influenced.
Absolutely Publix stores are better!
I work for Publix. Yes, highly encouraged but not mandated. The unvaxxed were treated differently than the vaxxed. All policy closely reflecting CDC guidance. I will say as soon as mandate was struck down, the next morning the change in policy was in my in box. They didn’t hesitate to walk back from many requirements. Not perfect by any stretch, but I never felt threatened with a loss of my job.
Looking forward to Publix coming to Louisville market. Buckees in Kentucky and Publix coming soon – McConnell will figure out a way to screw it up.
I’ve got Kroger, Meijer and Aldi stores within 1/2 mile of each other and approx 3 miles from my house. WalMart and Sam’s about 6 miles and Costco 8. Aldi gets the largest % of grocery dollar with Costco 2nd (meat, coffee, some staples and cheapest gas) and Kroger/Meijer getting what’s left.
Local Publix didn’t last long after they opened a Walmart SuperCenter a couple miles away. That said, there’s plenty of other Publix in the general area.
Except for a few items, I can’t afford to shop at Publix.
They are in close competition with HT here.
Here in North Carolina, when Kroger acquired Harris Teeter the prices skyrocketed … I viewed a pricing survey for the triangle area (Raleigh-Durham-Chapel Hill) and HT has the highest prices … more than Whole Foods, more than Fresh Market, etc. And all the Kroger’s have disappeared, replaced by HT brand.
Who owns FOOD LION ???????
Maybe Kroger should remodel some of their stores. They look dirty, dark, cluttered, with rude employees and not inviting to shop there at all. Publix and Ali are much better.
Try Winn-Dixie. In NO area I think they are getting stomped by local Rouses, which are more like Giant and trying to be like Wegmans (but I haven’t seen anyone else beat Wegmans business strategy).
Blackrock and Vanguard are two of the most important players on Davos’ team. This is like Gates buying up all the farmland. They tried controlling everyone’s healthcare but seem to have failed so far. This is plan K. Control the food and you control the people. Working their way up the food chain, as they say.
Fortunately, this too will fail. They’re toast.
control the food and you control the people
Why would they put themselves out of business this way?
I do not know a tremendous amount about Aldi, but they are much less expensive. A bit more work and somewhat limited in certain products but I am using them a lot instead of Walmart.
I like Aldi too. I can’t get everything there, but I can get a lot. It isn’t out of my way either on my route to a Publix or Costco. Aldi has been around for decades. We used to shop there when I was a young child in Indiana over 40 yrs ago. You had to bring your own bags then too.
too many eggs?
meet basket.
It now turns out that Albertsons itself is being acquired by Kroger, which has nearly 2700 stores across United States, to create a humongous food retailer. The idea behind it? To take on WalMart and Amazon, which have muscled into their territory online and offline. The merger, which doubtless will attract attention from regulators concerned about creating a monopoly, would result in the new entity generating more than $200 billion in revenue from more than 5,000 stores, taking it toe to toe against WalMart, whose revenue from groceries is also in that region.
https://timesofindia.indiatimes.com/blogs/ruminations/food-for-thought-us-grocery-chain-albertsons-helmed-by-vivek-sankaran-to-merge-with-kroger-to-challenge-walmart/
Exactly. WalMart has ascended to #1 in grocery over the past 20 years. Costco is #2. Amazon is climbing.
I had read that Kroger was number two behind Walmart. Costco is number three followed by Albertson’s, according to CNBC.
Memorable lines from Dickens’ A Christmas Carol:
Jorkin: “Mr. Fezziwig, we’re good friends besides good men of business. We’re men of vision and progress. Why don’t you sell out while the going’s good? You’ll never get a better offer. It’s the age of the machine, and the factory, and the vested interests. We small traders are ancient history, Mr. Fezziwig.”
Fezziwig: “It’s not just for money alone that one spends a lifetime building up a business…. It’s to preserve a way of life that one knew and loved. No, I can’t see my way to selling out to the new vested interests, Mr. Jorkin. I’ll have to be loyal to the old ways and die out with them if needs must.”
I believe only one of the many movie versions has this scene included (1951?)
It is not necessarily a bad thing for food retailers to operate at very large scale, and to use acquisition into non-competing service areas. This industry has enormous logistical requirements handling some very perishable products, so supply-chain infrastructure is crucial and overlap is counter-productive..
It also means potentially less food waste: thousands of tons have to be discarded every year, and food banks can’t absorb it all.
This industry also requires a lot of cash to acquire inventory which might then have to sit in inventory, unsold, for quite some time. So, it’s really not that surprising that “a few very deep pockets” would be involved in this. Sometimes, that’s what you need.
I love Publix!
I had already noticed the similarities between Safeway and Albertson’s. Thanks for researching this Corporate merger. There are plenty of King Sooper’s, owned by Kroger, also operating in our area. This pretty much monopolizes grocery sales in Colorado. No matter what happens, they can stick their vegetarian hamburgers where the sun doesn’t shine. There are still a few independent butcher shops scattered around the State, but I am sure it won’t take Blackrock long to start buying them all out. Every politician in Colorado is already in their hip pockets. People from Colorado will be smelling different pretty soon. 🙂
I have to hold on to my belief that planet Earth is a work of God that is still in progress. It takes a lot of hubris for climate change fixers to think they can ever be in control of that work. I just hope God doesn’t just decide the messes we have already made are not worth trying to fix for us.
“Ya’ll can go to h311, I’m going to HEB” -Davy Crockett/s
Bigger never equates to better. I have visions of these people sitting in rooms talking about which bugs are cheaper to produce. IMHO,Blackrock and our food source should not be aligned. I no longer trust any of these multi national companies who do things for “our own good”. This week USDA is asking small community gardens and small gardens to register with them. Why? Why would any small garden need to register with the USDA? I am sceptical of everything and feel everyone watches over us these days. To buy aerogarden and My gardyn you must register, again why? Is tracking purchases for resale their only goal or is to track those that will one day be able to sustain themselves? Kroger and Albertsons sucks,.. worst of the big chains. Good they are merging as I am not their customer base.
Rubbish. The USDA registration for community gardens is purely voluntary. Don’t know where you came up with the Aerogarden or Mygarden disinfo.
If you think this is an innocent registration process, I would like to sell you a bridge!
Blackrock and Vanguard each own about 10% of Krogers, and the sage of Omaha about 7% (BH). I assume this merger is about Cerberus cashing out its position in Albertsons.
Seems like others aren’t so keen on the deal. Personally, I don’t like Krogers and I don’t want to see one chain become the conglomerate, like w/TV, radio, and everything else.
https://www.yahoo.com/finance/news/kroger-vows-lower-food-prices-170619410.html
I don’t like our local Smiths (Kroger) at all.. I almost exclusively shop Albertson’s… not happy about this at all.
Food is freedom.
FUBAR.
Sundance is always, on the money!!
What a coincidence, I was reading this article yesterday and thought the same thing.
https://www.boston25news.com/news/local/parent-company-shaws-star-market-agrees-join-forces-with-kroger-blockbuster-deal/4IYYZGVTBFEJVG2P6YFTR5WWPU/
Here in Colorado, where I am at present, Kroger (King Soopers, City Market in mtns) and Albertsons (Safeway) are the dominant grocers for the metro areas. Prices are already higher here than elsewhere as CO is a sidetrip from the main rail and trucking routes. I formerly did antitrust, so divestitures are likely in this area if the analysis is any good, but who would be the buyer? No one with scale or clout.
As far as Blackrock and Vanguard are concerned, I stay clear of them. But their “control” of assets is largely in a fiduciary capacity as the issuer of ETFs. The ultimate owners are pension funds and others who have deployed their savings in to Blackrock and Vanguard branded ‘baskets’. Their size enables them to offer lower fees than others, so the crowds follow. Point being, they don’t OWN the vast amounts that in fact their clients own, but have placed with them as “AUM”. That’s a big difference. I simply detest the folks with Blackrock for their involvement as directors with the WEF. Reason enough.
If validated by stockholders a Kroger-Albertson merger leaves us locally that and a Mao Mart “supercenter”. We just moved from single purchases to the subscription service of Goodranchers.com who we first learned about as dedicated followers of Jason Whitlock’s “Fearless” channel on the Blaze Network. For produce etc. we have good local alternatives some raised by our in-laws including poultry and really good eggs. The soil here is highly alkaline caliche good for shrubs like hollies and littler else. Even the container grown smaller varieties of tomatoes like “Celebrity” and “Cherry” struggle in the extreme heat. Given the worst is seems squarely ahead I’m hoping everyone here is figuring out provisions. ALL categories.
https://www.holdingschannel.com/13f/blackrock-inc-top-holdings/
https://www.holdingschannel.com/13f/vanguard-group-inc-top-holdings/ (proud of their non-performing loan holdings)
https://www.cerberus.com/investment-platforms/private-equity/companies/ (Albertsons prominently listed)
I understand your point about the monopolies, Sundance, but here’s my question: How can Kroger and Albertson’s compete with Walmart (and these days Aldi, Amazon, and the Dollar stores) pricewise unless they can actually bring similar purchasing power to the table? I don’t have the answer, but I know a lot of Acmes (owned by Albertson’s) around here have already closed and I expect more are on the way since most everyone I know already, including me, does the bulk of their grocery shopping at places cheaper than Acme and Giant (Philadelphia’s two largest grocery chains). Full disclosure: My husband and most of his siblings grew up working at the Acme. He has a couple of siblings who built good solid careers with Acme and we still have family employed by them.
And don t forget who s wife is on kroger board of directors,drum roll turtle boy mitch s wife elaine chou.
This merger will have no impact on the fact Kroger will still suck.
These sorts of mergers aren’t the only threat to a competitive market. This article explains how some major grocery stores use non-competitition clauses to prevent land from being used to sell groceries.
Basically, when a grocery chain sells land it might have a clause saying no food sales allowed on that property. So if they close shop, they might prevent the new owners from opening their own grocery store. Or they might have bought land nearby, and used the same clause to prevent even a farm stand from popping up and competing with them.
https://thecounter.org/supermarket-chains-poor-communities-lease-agreements-food-insecurity/
There was a Shaw’s right down the street from me that went out of business a couple of years ago. the building stood vacant for a couple years and then SURPRISE, Amazon is gutting the store to open one of their supermarkets. I’ll use them in a pinch or if I need something quick for a recipe but will go across town to Market Basket to shop weekly.