Delaware Treasurer Davis opposes Kroger-Albertsons merger
WILMINGTON – Delaware State Treasurer Colleen Davis joined six of her colleagues in calling on the Federal Trade Commission (FTC) to oppose the proposed merger between major grocery chains Kroger and Albertsons, which includes local staples like Acme, Safeway and Harris Teeter.
In a rare move for the First State’s elected financial officer, Davis – who has also announced a 2024 bid for Congress – co-signed an Aug. 23 letter to FTC Chair Linda Khan opposing the $24.6 billion merger of the country’s two largest grocery store companies announced in October 2022. Also signing the letter were state treasurers from Colorado, Maine, Massachusetts, Nevada, New Mexico and Washington.
Notably, Delaware Secretary of State Jeff Bullock did not sign onto a similar letter from seven secretaries of state around the country also in opposition to the deal submitted to the FTC last week.
The combination of Kroger, with about 420,000 employees in more than 2,700 stores, and Albertsons, with 290,000 employees and almost 2,300 stores, would reach 85 million households nationwide, the companies said.
In Delaware, Albertsons operates 15 Acmes and three Safeways, primarily in the greater Wilmington area, but also stretching down to Rehoboth Beach. Kroger has two stores in Sussex County after acquiring Harris Teeter Supermarkets.
The proposed merger comes as the industry has been upended by the dominance of Walmart, which had more revenue from its groceries last year than both Kroger and Albertsons combined, the introduction of European low-budget markets like Aldi and Lidl, and the rising threat of Amazon’s grocery delivery potential. They argue that the economies of scale created by the merger would help to keep both afloat in the current market.
Overlap of store geographies could lead to closures post-merger though, creating food deserts that would leave communities with fewer options, the treasurers argued.
“I have serious concerns about access to fresh and affordable groceries, particularly in underserved communities,” Davis said in a statement. “It’s critical that we maintain a diverse range of grocery options, especially for those who rely on these stores for their daily needs.”
In addition to the severe consequences to Delawareans’ access to food in their communities, Treasurer Davis also cautions about the potential harm to workers’ livelihoods.
A study from the Economic Policy Institute, found that the merger between Kroger and Albertsons could result in a total loss of $334 million in wages for over 746,000 grocery store workers across more than 50 metropolitan areas. This loss translates to an average annual wage decrease of approximately $450 per worker.
“Mergers often lead to job cuts and layoffs as duplicate positions are eliminated in the name of cost savings,” Davis said. “It’s crucial that we protect workers’ livelihoods and job security.”
The letter also asserts “the consolidation of the chains would diminish workers’ ability to organize and negotiate for better wages and working conditions,” stressing that by “reducing the number of outside options available to workers, the merger would significantly limit competition in hiring and retaining employees, undermining their bargaining power.
“While mergers and acquisitions can sometimes provide benefits, we must carefully consider their impact on our communities, workers, and consumers,” Davis added. “I believe that this proposed merger between Kroger and Albertsons could have far-reaching negative consequences, and I am committed to advocating for the best interests of Delawareans.”