Combining operations would incentivize the company to shutter outlets, increasing the likelihood of food deserts in Clark County and limiting choices for shoppers.Īll of this reflects vast changes in the American economy. It also is difficult to see how a merger would benefit consumers. It is understandable that Kroger and Albertsons would seek leverage in competing against nonunion outlets such as Walmart, but it is insulting that officials would claim the merger will benefit workers. Such assertions defy centuries of economic theory ranging from Adam Smith to Paul Krugman. The merger will also mean lower prices and more choices for fresh food for customers and more investments in our communities.” And while it could be viewed as simply a business decision between two large corporations, it has broad implications.Ī study from the University of Utah claims “that increased labor market concentration will worsen pay and job quality, that a reduction in the flow of job offers resulting from the merger will limit any leverage low-wage workers have to obtain better job quality, and that concentrating employers at the bargaining table in a labor market where terms and conditions are set by collective bargaining agreement will deprive the union representing those workers of leverage.”Ī statement from Kroger counters that “workers gain from $1 billion in higher wages, expanded benefits, long-term job security, and a strong unionized workforce. The companies hope to complete the merger early next year, and the proposal is being reviewed by the Federal Trade Commission. While there are plenty of Walmart and WinCo and Costco outlets, along with higher-end stores such as Chuck’s Produce and Trader Joe’s and Whole Foods, most neighborhood grocery outlets fall under the Albertsons or Kroger brand - even if the name on the front of the store says otherwise. Between them the companies operate 330 stores in Washington, including 21 in Clark County. Albertsons owns Safeway, and Kroger owns Fred Meyer and QFC. At the same time, they must offer adequate wages and benefits in order to attract and retain qualified workers.Īs a policy paper issued by the Biden administration in 2021 states: “When there is insufficient competition, dominant firms can use their market power to charge higher prices, offer decreased quality, and block potential competitors from entering the market - meaning entrepreneurs and small businesses cannot participate on a level playing field and new ideas cannot become new goods and services.”īecause of that, a proposed $25 billion merger between Kroger and Albertsons - the nation’s largest grocery store chains - is disconcerting. One of the foundational theories of capitalism is that competition is beneficial.Ĭompeting retailers and manufacturers must constantly strive to improve their service, products and prices in order to attract and retain customers.
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