[HN Gopher] The smash and grab of Kroger-Albertsons ___________________________________________________________________ The smash and grab of Kroger-Albertsons Author : connor11528 Score : 153 points Date : 2022-10-19 15:24 UTC (7 hours ago) (HTM) web link (mattstoller.substack.com) (TXT) w3m dump (mattstoller.substack.com) | superkuh wrote: | See also, grocery corporation CEOs bragging about price gouging | under the cover of "inflation" during investor calls, | https://pluralistic.net/2022/10/17/united-states-vs-vons/#pr... | | >As Kroger CEO told his shareholders: "a little bit of inflation | is always good in our business" because it lets him raise prices | and "customers don't overly react." | | etc, etc. | PragmaticPulp wrote: | To put this in context: Grocery starts famously have razor-thin | margins because the business is so competitive. | | Kroger's most recent reported net profit margin was 1.7% with | gross margins (e.g. before company expenses) in the 22% range. | | Compare that to the SaaS companies, where many of us collect | our paychecks, that can have gross margins in the 60-90% range. | | If you want to call companies out for price gouging and | excessive profit margins, taking Kroger to task for a 1.7% net | margin seems kind of silly. Especially when most of us | engineers are collecting paychecks from companies with far, far | higher margins than that. | themitigating wrote: | Low margins on food is a positive thing though. | dan_quixote wrote: | There's nothing wrong with a healthy profit margin, per se. | The potential problem here is that we have a de facto | monopoly in many regions which controls access to FOOD. | hellojesus wrote: | Is there a way in which the monopoly is causing food to be | denied to individuals? | | The way I see it is that any food desert either exists | because it is not profitable or because nobody has taken | the initiative to offer a profitable service. Obviously I | could be wrong, but I have a hard time seeing how a | megacorp is denying access to food. | noasaservice wrote: | If it gets too bad, that's how you end up with riots, local | politicians dead, buildings torched, etc. Food riots are | not something you fuck with.... If history has anything to | say about that. | | I don't think we've seen that scope here in the US... Yet. | But given the number of guns, "it's a when, not an if" if | the politicians allow extreme food scarcity to happen in a | wide area. | themitigating wrote: | Politicians allow? Not the business? The calls for | government regulation by the same gun toteing people who | constantly complain about big government is so confusing. | datavirtue wrote: | My senical take on food stamps has been one of | politicians feeding the poor to prevent reality. In the | US you are talking about 40+MM people who cannot afford | to feed themselves. If half of them missed a few meals | all of our other problems would disappear under the | ensuing sea of shit. | polynomial wrote: | Correct. It matters less how healthy/nutritious the food | actually is, full bellies tend to keep revolutions at | bay. | 88913527 wrote: | The socioeconomic impact of a grocery store is far more | important than anything happening in the SaaS world. Towns | live and die by grocery stores-- food deserts as they're | known in areas that go without. It's fair to be critical of a | sector with tighter margins because food is rather low on | Maslow's hierarchy of needs. SaaS is expendable, food isn't. | dnissley wrote: | > Towns live and die by grocery stores | | Do they? Or are things like food deserts transitive | symptoms of deeper problems? E.g. that the surrounding area | is poor and getting poorer. If so, no amount of legislation | will change that | sokoloff wrote: | A little bit of stable inflation is good for almost every | business. Massive inflation shocks are bad for lots of people | and businesses. | bombcar wrote: | And the CEO isn't wrong - customers are used to gas prices | flailing all over the place, but they notice food price | changes, and so things "build up" over time and when the dam | finally breaks, it breaks hard. | | Arizona Iced Tea started at 99 cents in 1997 - today that | should be $1.83 but it's still 99 cents. Same with Costco's | hot dog and chicken (though they've done some noticeable | changes on the hot dog). | | When the dam breaks, it's not going to go up 10%, it's going | to skyrocket to try to make up for lost time. | datavirtue wrote: | It's because the consumer literally has to buy hundreds of | things. Tinkering with a penny turns into a dollar real | quick. | lotsofpulp wrote: | Those are not good examples. One is sugar water with | extremely high profit margins, and the other is likely sold | as a loss leader or at most, at cost. | | Food prices have been changing for a long time, but only if | you pay attention to quantity and ingredients. With gas | prices, the unit quantity or ingredient cannot change, so | the change is obvious. Same with things like milk and eggs | and vegetables though, which do change often. | | With processed food, the seller has much more ability to | maneuver around having to increase price. | ch4s3 wrote: | [*edit] I probably shouldn't have weighed in on this. | lotsofpulp wrote: | Is this at the retail level? At the producer level, | profit margins seem quite decent: | | https://www.investopedia.com/ask/answers/071015/what- | profit-... | | Logically, if the same quantity of Arizona Ice Tea | retails for the same price as it did 25 years ago, then | someone in the supply chain is or was making huge profit | margins, considering the increase in materials and | transport costs. | [deleted] | bombcar wrote: | Yeah - my point was that once prices start going up | noticeably, all the other processed food manufacturers | will increase their prices, also (often with a "return to | what the original size was" along with it). | Firmwarrior wrote: | Adding onto this a little: I was shocked at how volatile | some food prices are, and how much some have gone up | recently | | https://www.fao.org/worldfoodsituation/foodpricesindex/en/ | | Depending on how you set your endpoints, you can basically | come up with any number for inflation you want, from 1.7% | to 20+% | | I guess this is all well-understood and taken care of under | the hood by processed food companies, though, since the Big | Mac Index has pretty steadily held to an inflation level | near the CPI | jacobr1 wrote: | The big mac index tracks labor costs as much if not more- | so than wholesale food prices. | adamsmith143 wrote: | There's a reason why corporate profits are at all time highs. | they're just pushing any inflation related costs and more | directly to consumers and scraping even more profit off the | top. | | This is actually just not even controversial, completely | supported by data. | | https://fred.stlouisfed.org/series/CP | coldcode wrote: | If they were at all time highs the stock market would not | be done so much. | themitigating wrote: | I can't believe you're being downvoted | hellojesus wrote: | That may be the case, but that should allow a new | competitor to come in and offer lower priced goods. | collegeburner wrote: | absolutely how "price gouging" has gone from meaning "charging | $100 for a case of water during a hurricane" to "adding a 15% | markup to some groceries". | geraldyo wrote: | Both are examples of price gouging... ? | happyopossum wrote: | No, price gouging is actually a thing which means a thing - | it's not a term you can just apply to whatever you want. | | Most states define it as charging inflated prices _during a | crisis or emergency_ , not simply raising prices beyond | what geraldyo thinks is reasonable. | replygirl wrote: | If some term has different meanings in different legal | contexts, and you believe that having a meaning in a | legal context precludes having a distinct colloquial | meaning, how can you tell GP they're using the wrong | meaning before you've asked where they're posting from? | | Wikipedia: "Price gouging occurs when a seller increases | the prices of goods, services, or commodities to a level | much higher than is considered reasonable or fair." | mimikatz wrote: | I swear people look at this these mergers the wrong way. The | people who get squeezed are less likely to be the consumers and | more likely to be the producers. | [deleted] | stjohnswarts wrote: | The best way to look at is that it is almost -only- guaranteed | to be good for the megazilla corporation that is formed | afterward since there is nothing in their corporate policy to | benefit anyone other than their own bottom line. Regulators | need to nix this deal quickly. | [deleted] | jmole wrote: | It's both? | | This is America, where muscular middlemen squeeze out the | middle class so that capital flows to the top. | | Margin for producers? Not gonna happen. | | And for consumers? raise prices and lower portion sizes until | profits start to decline. | | Rent-seeking is the American dream | lotsofpulp wrote: | > Rent-seeking is the American dream | | I assume it is everyone's dream. | r00fus wrote: | If you are 100% self-interested, sure. Most people have a | moderate amount of empathy, so it's not their "dream". | lotsofpulp wrote: | It would be interesting to find someone that turns down a | $10M trust fund that yields $200k+ passive income. | | In either case, there might be some people that would | eschew that, but I doubt the population of people that | would accept (or dream about it) it is restricted to | "Americans". | [deleted] | cauefcr wrote: | What's the probability of such a fund appearing, out of | nowhere, for you? | | Or what's the probability of creating one in your | lifetime, from the bottom? That's what those in debt are | thinking, that's what those without a stake in the | profits are angry about. | r00fus wrote: | Whether I'd go for something like that (trust funds | usually come with some strings)... | | I'm just saying that's not my dream (to be born rich). | skinnymuch wrote: | Don't think it was Marx's or MLK's or Malcolm X's dream (I | don't mean the white washed MLK, etc) | oasisbob wrote: | I like how the author of this piece included this early on when | they point out the three markets affected by the proposed | merger: | | - The producers | | - The consumers | | - The employees | | It's easy to picture consumers being squeezed the least by | this, but maybe not. | nerpderp82 wrote: | Jesus, if sourcing gets consolidated across all of Kroger, it | would actually push _out_ smaller producers and if anything | goes wrong with the relationship, the producer loses access to | Kroger /QFC/Fred-Meyer/Albertsons/Safeway/... | | Food is going to get more expensive, lower quality and supplied | by less producers. | macintux wrote: | The article called that out. | | Plus all of the comments here are discussing the impact of the | merger, and not the highway robbery that it identifies as a | core problem. Frustrating. | unethical_ban wrote: | This only solidified my position that market capitalism is more | dangerous than worker owned corporations by far. | | When 50,000 people own all portions of the economy, every | unnecessary white collar worker "optimized" out of a job, every | blue collar worker replaced by robotics, where is our society? | addragyn wrote: | This is not "market capitalism". | | This is anti competitive behavior, perpetuated by Wall Street | that is enabled by the tax code. | | Independent / other grocers can't compete because the | fundamentals of the business have nothing to do with the game | being played. | throwawaymaths wrote: | Also enabled by the interest rate and monetary policy which | encourages fiscalization over productivity. | unethical_ban wrote: | Eh, I mean, I still think some kind of "market-based" capital | system is reasonable - I don't want government-orchestrated | markets for all goods and services, but clearly our society | has not done enough to regulate the immoral extremes of free | markets. | throwawaymaths wrote: | The state and its policy encourage free markets to be | immoral because they fetishize "growth" as a metric. I'm | not saying growth is bad, but morally speaking, it should | be consisered at _best_ neutral. A growth-agnostic | capitalist system would be interesting. | unethical_ban wrote: | Agreed. Our society should be measured in the happiness | and health/living security of its citizens, and by | technological advancement. The acquisition of wealth can | be a means to that end, not the end itself. | skinnymuch wrote: | > This only solidified my position that market capitalism is | more dangerous than worker owned corporations by far. | | Belated Welcome! We need more people like you | prpl wrote: | Combined, my family has easily more than 60 years at Smith's over | 3 generations dating back to the 70s - my dad had more than 40 | alone before they canned him. It is not an understatement to say | I grew up in a grocery store. | | Kroger has been a bit more ruthless in the last 5 years, and | basically pulled an IBM in late 2019: | | https://www.cnbc.com/2019/10/02/kroger-to-lay-off-hundreds-a... | | They called it "middle management" in press release but they | fired tons of senior people in the stores that had been around a | long time (anyone over 50 who'd been at the company more than 25 | years was a good candidate). In any case - management at a | grocery store might as well be a blue collar job in comparison to | most any other white collar job. The severance package was decent | - most got 9 months pay. Still, getting canned in your 50s from | one of the only jobs you've ever known isn't pleasant, but it | didn't surprise me. Management at the established grocery | businesses. There was a lot of talk about The Bear in the | restaurant industry - the grocery industry at the departmental | management level and above is similar, albeit usually less | ruthless and a lot more petty. Everyone gets written up a lot and | their jobs hung over their head often. I think it's probably | gotten a bit better in the last decade though, partially as some | of the old people have started to be replaced with college grads | I suppose. | | As for Safeway, I've been in the bay area since 2010 and I can't | really say I'd shed a tear to see Safeway under different | management. I remember my introduction to Safeway when I went to | buy eggs and bacon and was shocked to see it at $7/package in | 2010. I settled for the Jimmy Dean sausage at the time, because | it was on sale. This simple introduction holds true -most Safeway | prices are out of line with a reasonable price _unless_ things | are on sale. That was not something that was true at Smith's, or | Winco, or even Raley's (Nob Hill Foods) in general. Safeway even | took over Andronico's in the bay area and _raised_ prices even | more - while reducing the product quality and selection. Compared | to Whole Foods, prices are actually competitive on a day-to-day | basis. The best thing Safeway has going for itself at this point | is that is that it's ubiquitous and it usually has self-checkout | lanes (which is the only way to get in and out of a store in a | reasonable amount of time anymore). | | To sum it up - I think Kroger is on a path to trying to turn more | profit at the expense of workers and consumers alike, but I don't | think Safeway can get much worse either. It's going to be shit | all the way down, you just hope it's not the super smelly kind. | formerkrogemp wrote: | You've hit the nail on the head. I worked at Kroger for 7 | years, and I remember how stressed out management was that | year. The stock had tanked, especially after Amazon bought | Whole Foods. We had hours cut from 2016 to 2021 every year with | entire departments consolidated and removed. Every new hire | became part time with next to no benefits. Old workers were | forced out, some for no reason and others for good reasons. I | really am glad to be a customer and not a worker anymore. I'm | fairly cynical of the merger as well. | prpl wrote: | Meat departments are obviously missing from lots of grocery | stores these days when they used to be effectively full- | service butchers. A lot of that is because they are the some | of the most interested in unionization (My dad had been | suspended several times over the years for having a meat | department even look into unionization). Bakeries/Deli | counters too. To some extent, you can't blame them - you | don't see much of that at Walmart and never at target, and | for a long time the trend seems to be moving towards pre- | packaged (Trader Joes, defunct Fresh and Easy, even gas | stations). The general trend since at least 2008 has been to | open stores under 100k sq ft, even to 80k (or half that in | urban areas) | gwbrooks wrote: | The combined firm, post-merger, would have 15% of the U.S. | grocery market. Walmart has ~18%. | | It's OK to dislike the deal because you see a beloved brand being | absorbed. It's even OK to dislike the deal because you hate | private equity. | | But aggregating up to a 15% market share doesn't look like a | monopoly concern to me. | banannaise wrote: | Given Walmart's aggressive and arguably anti-competitive market | practices, I'm not sure this is the argument you think it is. | Why does this mean "this merger is okay, actually" and not "we | should forcibly break apart Walmart to restore competition"? | gwbrooks wrote: | I'm fine with that if the public will, regulatory power and | legislation is there. | | My point was less "This is fine," and more, "This is | inconsistent." Sorry if that didn't come across. | banannaise wrote: | Sadly, the will probably isn't there, but not solving one | problem doesn't mean we can't solve related problems. Some | people may not believe we should, but (1) I would disagree, | and more importantly (2) that isn't a legal doctrine. | | Walmart, notably, didn't get there by agglomerating smaller | grocery brands. They grew it organically, if with a lot of | shady tactics. So there's not really a point at which | regulators could have prevented the whole thing; they can | only take proactive action. | | Whereas here, they have an opportunity to stop a problem | reactively. | manacit wrote: | This is potentially an overgeneralization: | | - Not all grocery stores are fungible in the category. Safeway | and Whole Foods cater to a very different clientele at | different price points | | - That is a nationwide amount, but locally may be very | different. There are no Walmarts in the city limits of Seattle | | - This is not just about customers, but suppliers as well | | Now, there are still plenty of choices for me - I could go to a | PCC, Whole Foods, Costco, Amazon Fresh, etc. Not every city has | the same options, and turning a market with 3 or 4 competitors | into 2 or 3 is still a material change, as ew have seen in | other industries. | nightfly wrote: | Nation wide it might be only 15% but in a town it might mean | that all (or at least all non-outlet) grocery stores are now | owned by one company | themadturk wrote: | In my city we have two Safeways, a Fred Meyer (Kroger), a QFC | (Kroger) a Walmart Supercenter, a WinCo, a couple of other | smaller grocers, and Costco. Before the Albertsons-Safeway | merger we used to have a couple of Albertsons, and even a | Haggen. Those are all gone now, not replaced by anything. | There's another couple Safeways not far out of town, and | another Fred Meyer as well. | | With this kind of geography, we're likely to lose at least | one Safeway (it's literally across the street from Freddy's), | and possibly one or another of those not-too-far-away | Freddy's and Safeways. It's not exactly going to create a | food desert, but real choice will go way down. I already | split my shopping between Fred Meyer and Walmart, mostly | because of supply concerns between the two. | gwbrooks wrote: | Agreed. But the policy horse is already out of the barn on | that dynamic. See also: Independent bookstores, | small/regional general stores, farming, water and electric | utilities in many markets, etc. | clairity wrote: | "monopoly" is a red herring here. if they were under 10%, you | might have a case (though there are many factors besides market | share that need to be considered, like supplier power). | | the issue that we the people, and by extension our antitrust | regulators, care about is market distortion, and 15% is well | within the range at which a competitor can unduly distort a | market in their favor by sheer size alone. markets exist for | the benefit of society as a whole, not just giant corporations. | [deleted] | honestlyGr8t wrote: | doodlebugging wrote: | Maybe if they keep consolidating all the grocery suppliers they | will reach a point where their pricing ability locks out the | poorest people and rich people finally make it onto the menu. | adrr wrote: | Still have Walmart, and target. Also Amazon has moved in with | steep discounting. There's also the discount grocery stores | like Trader Joe's. | jaywalk wrote: | The fact that Albertsons is going to be liquidated to essentially | force the issue is scummy beyond belief. Private equity is out of | control. | lotsofpulp wrote: | This is not private equity. Kroger is a publicly listed | company, and so is Albertsons. | | I suspect the reason for this is Albertsons is facing heavy | competition from other grocery stores, their financials look | terrible. | | A lot of established grocery stores are getting upended at the | lower end by Aldi/Lidl/Walmart/Target/Costco, and at the higher | end by Whole Foods/Trader Joes/etc. | | Kind of reflects income/wealth gap trends. You are either | selling at the lowest prices, or you are selling at higher | prices to a niche population on the rich side of town. | | Edit: ignore this comment, I had wrong information. | EFreethought wrote: | Per Wikipedia, Albertsons' Class A shares are traded. My | guess is the PE firms have a different share class. | lotsofpulp wrote: | Oh I see. Ignore my comment then. | [deleted] | addragyn wrote: | Most certainly is private equity. Didn't read the article? | | The 4b special dividend that will be issued will go to two PE | firms. According to the author's analysis this will strip out | the working capital and enrich the PE participants. Likely | sending the company and by extension the workers to the debt | markets. | | I didn't read the financials but if true this is just | shithead financial engineering. :( | lotsofpulp wrote: | I was wrong to write that the deal is not private equity, | it is setup by private equity firms, but it is up to all | the other investors to see if they want to go ahead with | the deal, hence the need for a shareholder vote. | | I do not see how the special dividend can legally go to two | firms. It would have to go to all shareholders. | | Cerebrus does own 150M/475M shares = 30% of Albertsons, but | for some reason, I do not see Apollo in the list of top | shareholders. | | https://finance.yahoo.com/quote/ACI/holders/ | | But their press release from May 2020 says they bought | 17.5% of Albertsons: | | https://www.apollo.com/media/press- | releases/2020/05-20-2020-... | stjohnswarts wrote: | Exaclty, it decreases competition, decreases the number of | stores, increases prices, etc. Why have regulators if they | won't kill these megadeals that really only help the corps | involved and harm the public interest everywhere else. | whartung wrote: | I heard about this the other day. I can't express how much I | dread it. | | Folks get invested in their local grocery stores, we do at least. | | And we were neck deep in the last merger with Safeway, since it | destroyed the store that we went to. | | Albertsons bought Safeway, but as part of the deal, they had to | sell off some of the stores (which made sense, our store, Vons, | was right across the street from the local Albertsons store). | Somehow, Hagans (a small northwest chain) got roped in to sell | the extra stores too. Hagans "overnight" grew from, like, 12 | stores to over 200. | | Shockingly, the transition did not go well, there were cries of | shenanigans, and Albertsons ended up buying all of the stores | back. Some of the local stores that closed due to the merger | reopened, other's didn't. | | Our store never reopened. In over 8 years, that space and sat | empty in the downtown area. My mustache twisting cynicism tells | me that Albertsons is keeping the lease on that space, and | keeping it empty, to prevent an Aldi from renting it out and | setting up shop right across the street. | | Didn't help, turns out one is moving in down the street after | renovating a closed hardware store. Maybe they'll give the space | up now. | | That merger was a mess, caused a lot of disruption, cost a bunch | of jobs. | | We shop at Albertsons, there's a Ralphs (Kroger) closer, but we | like Albertsons better. With 3 years of COVID induced "new | normal", I'm not looking forward to the collateral damage from a | merger like this. | deeblering4 wrote: | I'm quite thrilled to see low price groceries like Aldi come in | and take business away from these bloated supermarket chains. | | After making the switch it's hard to shop at a typical grocery | store. Everything is ridiculously marked up and the floor plan | is ridiculously sprawling. | auggierose wrote: | How times are changing. Over 20 years ago I would go with my | Italian friend to a Safeway in San Francisco at midnight, | just for fun. So different from boring German supermarkets. | And now you are cheering for Aldi to come in ... | idiotsecant wrote: | There is a legitimate use case for these types of stores, | though- some people prefer a wider selection and value it | over lower prices with a narrower selection. Aldi is fine but | it's not a replacement for literally everything else. | bee_rider wrote: | > Folks get invested in their local grocery stores, we do at | least. | | It is kinda funny (Stop & Shop or starvation I say!). I suspect | it is because getting groceries is one of the rare shopping | activities that is just 100% always a chore. Like if you are | going clothes or electronics shopping, you are probably hoping | to stumble across something surprising. Food -- I know what | food I want, no need for novelty, I just want to get in and | out. | stonemetal12 wrote: | That is why I always go by the deli section. Cheese from | random foreign country inserts a bit of novelty. | datavirtue wrote: | Right, but Kroger would like you to wander around the store | admiring their huge retail inventory. Perhaps they can sell | you a new patio set or some swag from your local pro soccer | team, or some pots and pans. | | They have been passive-aggressive about online ordering and | have basically been forced into it by a perceived competition | with Amazon (abject paranoia). They hate it. | | For some reason you can never get all of the items on your | order. They have "been trying to fix this" for years now. At | one point, over two years ago, I was in talks with recruiters | about joining the team that was "trying to fix it" at Kroger. | | Their software dev ranks and tech in general is a fast | revolving door. I refused to join because of all the people I | knew who had joined and left almost immediately. | | The last thing you want is a bigger Kroger. My initial take | was that this merger would be the thing that causes them to | fail. | bombcar wrote: | The dirty secret behind all the online ordering stuff is | just how ABSOLUTELY BAD at inventory many stores were (and | still are!). Things like "we get a pallet of oranges every | Monday, and every Sunday night we throw any remaining away" | but across all swaths of items. | | That's before you even get into tracking where in the store | the items might be, because they're not always in the same | location, end caps, etc. | | And then on top of that add lazy pickers who are just | trying to finish as many orders as they can, and the "not | available" button is right there ... | jacobr1 wrote: | I generally take that approach now (with kids) but in my | younger years I loved going to the grocery to figure out what | I was making. Start with something interesting on sale on the | meat/seafood section, or some fruit/veg I was less familiar | with and build a menu from there. Or try some new spice, or | random packaged food and buy the suggested items for the | accompanying recipe. I found so many interesting foods to | try, especially from ethnicities other than my own | background. Also speciality items and snacks, even different | brands of classics. | agitator wrote: | I can't relate to this statement at all. I actually enjoy | grocery shopping. I look forward to it every week. It gives | me an opportunity to pick out what I want to eat or make | during the week. I love cooking and discovering new food, so | it's a bit of a hobby. I know its incredibly inefficient and | something that I could do faster ordering online, but | shopping for food is weirdly nostalgic and human to me. | Procuring food, even though it's still within the structure | of industrialized grocery, is the last thing in my life that | hasn't been completely digitized and I find it pleasantly | inefficient and archaic. | | I mostly shop a Trader Joes, aside from other specific things | I may need at a specialty store. | nescioquid wrote: | I know. My wife and her entire family love to cook. They also | love a leisurely sprawl through a grocery or specialty food | store, just to see what's new, what's gone, or maybe find | inspiration (I'm usually discouraged from joining because of | my "get-in, get-out" mentality). | | I hope you have the great, good fortune to have someone in | your life that complements you in this regard :-) | idiotsecant wrote: | Clearly you have a much too healthy relationship with food! | For us deviants who are less well adjusted a visit to the | grocery store is basically a to-do list of future bad | decisions. | shrubble wrote: | It's possible that the company is locked in to a rental | contract that does not allow them to break it. Since Aldi store | are much smaller the total rental amount would not cover the | landlord letting Albertson's out of the existing contract. | stormbrew wrote: | > In over 8 years, that space and sat empty in the downtown | area. | | Empty properties that once had a grocery store in them are | often that way because the property is under a restrictive | covenant preventing any use as a grocery store for some | absurdly long period of time (decades, usually)[1]. It's a | weirdly unique thing about grocery stores, and can be _really_ | harmful to communities where it 's just not practical to build | new grocery store buildings (and grocery store buildings don't | always translate well to other kinds of retail). | | It's a common enough problem that it's banned in some | places[2]. | | [1] an example: https://www.marketplace.org/2018/01/12/when- | grocery-stores-c... | | [2] eg. DC: https://code.dccouncil.us/us/dc/council/laws/22-138 | CoastalCoder wrote: | Seems like a legit case for eminent domain. | dpkirchner wrote: | The Albertsons that closed near where I grew up was replaced | with a Goodwill (thrift store). Goodwill is fine, however I | can't help but feel that it's a downgrade for the neighborhood. | Not on the order of a cash advance, pawn shop, or self-storage | opening in its place but still not great. | overtonwhy wrote: | Goodwill is pretty neat. They save a lot of stuff from going | to the dump. You can find some really interesting and | inexpensive electronics there sometimes. | bombcar wrote: | The ones around here ban most electronic donations, because | people use them as an electronics disposal drop-off - dump | an old compute on Goodwill, avoid the recycling fee, it | doesn't sell, Goodwill has to pay the recycling fee. | dpkirchner wrote: | Interestingly, around here, Goodwill takes electronics | for resale or disposal. I assume they get paid for the | latter by the state. | UncleOxidant wrote: | We had Hagens around here too. They closed down and most of the | sites have been empty for years. There was a Safeway not too | far away that closed down several years back (maybe part of | that merger agreement) that's been empty for years... now I see | an Albertsons is moving in there. The main 2 chains in our area | are Fred Meyer (Krogers), Safeway & Albertsons (both really | Albertsons) so this merger will mean that all those stores are | now really owned by the same corporation. | GoodJokes wrote: | colinmhayes wrote: | Aldi is like a fifth of the size of traditional grocery stores. | The smaller size is largely the point. "We may not have the | same selection, but we have what you need and you can get in | and out in 10 minutes." They probably didn't want that space. | evan_ wrote: | A bunch of our local Albertsons turned into Hagans as well, | including the one near my house- in the days before the | changeover, Albertsons swapped out all of the old and broken | refrigeration units from the remaining stores with working ones | from the soon-to-be-Hagans. | | They've since gone back to being Albertsons so I don't know | what the point of any of it was. | specialist wrote: | Sometimes it's union busting. Something about a change of | ownership resets or moots the relationship. | happyopossum wrote: | No need to speculate, the article clearly outlines the | reason behind all of this - it was an FTC mandate that | failed. | [deleted] | flerchin wrote: | How can the "special dividend" that cripples the company be good | for the company, or shareholders. That alone ought to be illegal, | the merger is just window dressing. | subsubzero wrote: | I really don't know how this will go through. I feel like | Safeway/Vons was already a monopoly and then they merged with | Albertsons, which to me feels like a grocery chain that is | gigantic. Now they are merging with Kroger and this to me seems | insane. | | Now I know alot of people will say who cares, lots of grocery | stores owned by one company what could happen? Well having a | chain this big they could raise the price of food in many cities | to whatever they want with no repercussions as people have to eat | and there is no more competition. I know in my city this merger | would mean we would have no grocery stores that are not owned by | Kroger(Walmart and Target still sell food though). Its a pretty | scary proposition. | gizmondo wrote: | Putting the antitrust issue aside, it seems to me some people | want the owners of the businesses to be similar to NFT owners. | Some symbolic notion of possession with no rights. Comparing | dividends with arson, seriously? It's more like moving money from | one pocket to the other. | | > It's a bit like a private equity firm blood-letting someone | after buying the person a life insurance policy the private | equity firm then gets to collect. | | Companies are not people, their existence has no worth on its | own. | nerpderp82 wrote: | If this goes through, we might as well disband the FTC. | acomjean wrote: | In Massachusetts we have a private grocery store chain called | "Market Basket". Its cheaper than the rest and spreading. (After | the 2 realtive that owned it had a spat, CEO Arthur T. was | removed, causing workers to strike.. When your non-union | workforce walks off the job for you, you are doing something | right as an owner.) | | https://en.wikipedia.org/wiki/Market_Basket_protests | | Though Trader Joes (Aldi North ) is here, Aldi just started | opening up here. Those style markets are affordable, but don't | have the selection of the Market Baskets. | https://en.wikipedia.org/wiki/Aldi | | I wonder if the fact that these are privately held is an | advantage. | foobarian wrote: | There is a lot more than those in Mass. Shaws, Starmarket, | Stop&Shop, Wegmans, Aldis, Roche Bros, Whole Foods, Trader | Joes... | jasonladuke0311 wrote: | This would, I believe, make Kroger the only major grocer in the | Denver area. I'm not counting Sprouts, Whole Foods, Trader Joe's | as they are not very widespread. | massysett wrote: | Walmart has a lot of supercenters and Neighborhood Market | locations so you'll have at least two grocers. I suspect though | that Kroger/Albertsons will sell off some of the stores to | mollify regulators. | not2b wrote: | Monopoly power is the biggest driver of inflation right now. The | price spike after the Covid restrictions ended was expected, but | it wasn't expected to persist. But businesses used inflation as | an excuse to jack up prices more than costs would justify, to | increase profit, blaming inflation for this. Ordinarily some | competitor would respond by selling the same products for less | and taking market share away, but since there are only a few big | competitors they can all rachet up the prices together. | testfoobar wrote: | This comment conflates inflation with monopolistic | pricing/cartel pricing where either a single entity or a group | of entities collude to drive up prices. Monopolistic and cartel | power should be restricted or regulated. So for example, I | don't believe this merger should be approved. | | Corporations are in the business of increasing profit - Covid | didn't magically incentivize companies to become more greedy | than before. Corporations are always greedy. Why leave any | profit on the table? Take for example, a tech worker that has | learned to switch jobs every few years, increasing base+bonus | with each job change. Are they greedy? | specialist wrote: | Consumers (and infotainment) regard any price increases as | "inflation". | | Agree that we should cease carve out and resume chartering | corporations to serve the public interest. | Panino wrote: | > Kroger/Albertsons would... own and operate brands such as | Safeway, Ralphs, Smith's, Harris Teeter, Dillons, Fred Meyer, | Vons, Kings, Haggen, Tom Thumb, Star Market, Jewel-Osco, and | Shaw's. | | The illusion of competition. Then within that single company | posing as many are found food products sold by a handful of | megacompanies like Kraft, Nestle and General Mills, each posing | as a multitude of companies "competing" with one another. | | For this and other reasons, it's best to cook and eat whole foods | (onions, sweet potatoes, etc.) instead of consuming foodlike | products that were manufactured. | AlgorithmicTime wrote: | mikestew wrote: | In the PNW, I don't think it even creates the illusion. What | grocery stores are left that wouldn't be under that umbrella? | In Redmond, WA, the only ones that come to mind are Trader | Joe's, PCC, and Whole Foods. One could probably shop at PCC and | get everything one needs for food. Whole Foods, sure, but it's | pricey and now you're dealing with just _another_ giant | corporation trying to eat the world. | | But it is starting to look like there's going to be Kroger and | Publix (if you live far enough south). Meanwhile our government | agencies are over there playing with their fiddles. | colinmhayes wrote: | I would honestly be surprised if Amazon didn't have a large | network of grocery stores in the PNW within the decade. The | no cashier system seems to be working well in D.C. and | removes both a huge pain point for customers and a huge cost | center for the business. I expect them to be really | aggressive with this, especially on home turf. | beoberha wrote: | I'd take the other side of that bet. Their walk-in walk-out | arent doing well in urban Seattle. When I lived in the | city, I hated going there and preferred going to the QFC | nearby. I'd expect it would do even worse in a suburban | setting. | dendrite9 wrote: | Appropriately for this post there's a Haggen's a little north | in Woodinville. Just across the border into Bellevue there's | the Asian family market, Mayuri, and a host of other small | Indian/Asian stores. Target and Costco are also options as | other's mentioned. | thatguy0900 wrote: | Personally I've moved all my shopping to ethnic grocers, but | I'm lucky to live in a diverse area with multiple Mexican, | asain, and African ones nearby. I also cook all of my food, | selection would be awful if you stick to more pre-made stuff | probably. | xxpor wrote: | In the Seattle area, Town & Country markets are nice, but | expensive. | | PCC may work for some folks, but they don't carry some fairly | basic things like... Coke. (also crazy expensive). | __derek__ wrote: | Your list is missing Grocery Outlet, Target Grocery, Costco, | and the smattering of Asian grocers. You could probably also | add Amazon Fresh delivery. | | But, yes: nobody in our area is under the illusion that Fred | Meyer and QFC (or Safeway and Albertsons) compete with each | other. | jdeibele wrote: | Near me, the QFC is tiny compared to the Fred Meyer stores. | It's much more convenient to get in and get out quickly. | Prices are higher than Fred Meyer on most things so we tend | to use it for items we ran out of and do our weekly | shopping elsewhere. | | There's a lot of Kroger-labeled things on the shelves, so | it's clear they're owned by the same company. | | Another option are the organic-only stores, like Natural | Grocers. | jjulius wrote: | >Near me, the QFC is tiny compared to the Fred Meyer | stores. | | QFCs are essentially just the "Grocery" department from | Fred Meyer. Remove Home Goods, Apparel and Electronics | from FM and you've got yourself a QFC. | | Edit: Someone step in here and correct me if I'm wrong, | but that's Kroger's basic MO. Even Ralph's and their | Kroger-branded stores just feel like the exact same | grocery store as QFC and FM's grocery department. | | And (sorry to rant, lol), yeah, a dude named Fred Meyer | in Portland really did found the store in the 1920's, but | do y'all have to put his picture and a big spiel about | him and "local community" up at the front of your store | when we all know that the present-day reality of FM is | bullshit? | mimikatz wrote: | Also the largest which is Wal-Mart, I assume they sell food | in the PNC | __derek__ wrote: | That's true, but there's no Walmart in Redmond itself. | The Seattle area is unusually Walmart-light, as I | explained in a comment on a similar thread the other | day.[1] | | [1]: https://news.ycombinator.com/item?id=33239311 | stonemetal12 wrote: | A bit nitpicky but given the topic, GP mentioned Whole | Foods. Amazon owns Whole Foods, so "Amazon Fresh delivery" | isn't another competitor . | mikestew wrote: | Good point, I've missed quite a few. I guess I was thinking | more of "one stop shopping", which even PCC barely | qualifies for only a select group of people. But at the end | of the day, should the merger go through and Krogerson's | tries to go all monopoly, the listed alternatives will | serve as mitigating factor. | themadturk wrote: | As far as "one stop shops" go, there are few in the PNW. | I'm down in Federal Way, and though we have Fred Meyer | and the Walmart Super Center, everything else (Safeway, | QFC, Trader Joe's, WinCo, Grocery Outlet, Chefs'tore and | possible Amazon Fresh, though I've not been in there yet) | are just grocery stores, and Target and Costco (plus what | we call "the old WalMart, used primarily as a management | training store for WalMart) are big-box stores that also | happen to carry food. | draw_down wrote: | lotsofpulp wrote: | > What grocery stores are left that wouldn't be under that | umbrella? | | The best one, Winco. And of course, Walmart, Target, Costco, | New Seasons, Trader Joe's, Grocery Outlet, Natural Grocers, | etc. Lidl and Aldi are making huge gains nationwide too. | collegeburner wrote: | idk where i live we have a few krogers and nothing else. i | think these differ by geographic footprint. we have plenty of | competition: | | * HEB | | * walmart | | * brooks brothers | | * fiesta | | * 99 ranch market/other asian stores | | * lots of good carnicerias | | * costco | | there's an aldi but i've been a few times and it's a awful | experience and i don't think most people go there but there's | still plenty of options. there's probably something specific | about where you are that's pushed towards that situation if | there are no options. | | kraft, nestle and general mills make name brands. most of the | stores i just listed offer store brands that are basically the | same thing for cheaper. you don't have to buy from the | megacompanis. | | mostly agree on the whole foods argument, though. | banannaise wrote: | Guess who makes most of the store brands? | SoftTalker wrote: | > It's a bit like a private equity firm blood-letting someone | after buying the person a life insurance policy the private | equity firm then gets to collect. | | So, like long-term care insurance. Biggest scam I've ever | personally encountered. | 1123581321 wrote: | Bit of a headscratcher! I guess the analogy is nursing homes | are buying LTC policies and then maiming the beneficiaries so | they require full-time help but stay alive long enough to beat | the premiums? :) | | If you just meant you had trouble getting LTC to payout, that | may be. The payout ratio is close to 1.0, slightly better for | women and significantly worse for men (the women-to-men ratio | is skewed among the elderly.) So the industry makes its money | on float like other competitively-priced insurance products. | | But it's still difficult to qualify for a good home or get in- | home care approved and started. Staying in it longer than six | months is also challenging, and can draw extra scrutiny since | patients who stay longer than that are likely to stay closer to | two years, which makes the policy a big money-loser. | | It doesn't help that most agents only sell LTC as an add-on to | boost their production, rather than consult with it as an | expertise. | not_enoch_wise wrote: | The engineering institution of excellence we call Albertson's may | be over. | pphysch wrote: | My closest Kroger-owned outlet has a "cheap" feel but many prices | are actually much, much higher than the nearby Trader Joe's. More | on par with Whole Foods. An insidious conglomerate. | lotsofpulp wrote: | Some grocery stores like Aldi and Lidl and Winco and Costco and | Walmart have a strategy of pricing low all the time (e.g. | everything at ~115% of their cost to source it). | | Some, like Kroger and Albertsons, price some things low and | some things high, betting that people coming into the store for | a lower priced product will pay more for the convenience of not | having to go to another store. And this is frequently | accomplished by giving out coupons (e.g. some things are losing | them money, some are at cost, some are at 100% profit margin). | rootusrootus wrote: | Maybe we should pass some kind of regulation that forces every | business to clearly label the ultimate owner of the company. So | instead of going to Fred Meyer, it should say "Fred Meyer by | Kroger". And let's extend that to all the random brands that | litter grocery store shelves trying to look like they came | straight from a local farm. Consumers should be reminded that | they're just buying factory food in a pretty container. | | I'm only kind of kidding. | [deleted] | paxys wrote: | What exactly will that change? People will go to the store that | is most convenient for them regardless of whether it is called | Kroger or Albertsons or Safeway or "Kroger by Albertsons by | Safeway". | jacobr1 wrote: | Where do you stop in the ownership chain? I brand-name that is | just a department of a registered company? A fully owned | subsidiary? What about majority stakes in public companies? | What about ownership stakes in holding or investment firms? | What percentage of ownership is interesting to note at each | level? | maxerickson wrote: | SEC uses 5%. | | It would probably work fine for the stated purpose (not | missing many important owners, not listing overly many). | s1artibartfast wrote: | So you list up to 20 names on every storefront and package? | lotsofpulp wrote: | A quick search online answers this question without the need | for legislation. | cwkoss wrote: | I think that would be great, why are you kidding about it? | kylehotchkiss wrote: | Ralph's is full of Kroger branded products. I don't even get | why they are called Ralph's. Just be Kroger. ___________________________________________________________________ (page generated 2022-10-19 23:00 UTC)