Submitted by Dick Muri, Steilacoom.
The success of our nation has always been the free market. It drives innovation and competition which ultimately creates jobs, funds our tax base and supports families. That’s why I have been dismayed by the Federal Trade Commission’s opposition to the proposed Kroger and Albertsons merger.
They claim consumers will suffer. The grocery landscape is rapidly changing with Wal-Mart, Costco and Amazon becoming the dominant and growing players. Over the last three years Wal-Mart, Costco and Amazon have all seen an expanding market share. At the same time period Kroger and Albertson have seen their share of the market decline. More and more consumers are gravitating to buying groceries online or in bulk. Kroger and Albertsons are innovating and investing to survive this changing marketplace. It’s their consumers and workers who will benefit from more competitors and reduced costs. Kroger and Albertsons are union jobs–the others are not.
Additionally, and especially important for our community, Kroger has been an outspoken supporter of our nation’s veterans. Over the last ten years, Kroger has hired over 50,000 veterans in-stores, technology and logistics. And committed over $41 million to the USO. They’ve also created the Veterans Associate Resource Group (ARG), which unites Kroger veterans and veteran supporters to highlight the talents and strengths of associates with military experience. As a veteran in a military-based community, this is noteworthy.
In my view, Kroger and Albertsons deserve a chance to merge and thus have a better ability to compete in this ever changing and competitive market.
I am skeptical of any benefits to the consumer of the merger, but let them try. Albertsons has been through this before when they bought out Safeway, and prices of the two chains did not change. While Kroger (which owns Fred Meyer) still has decent prices, I find Albertsons/Safeway more expensive than most. I suspect this merger will only increase prices at Kroger stores, so I am somewhat against it, but that’s just a feeling not based on any hard facts. You don’t mention Winco, but they also have competitive prices and seem to be doing pretty well. Winco also is (partially?) employee-owned and that’s a great business model.
A free market also means free consumer choices to me. If I can only choose between one or the other of the same chain, which is already the case in Lakewood Towne Center ever since Saar’s was apparently denied a chance to open an alternative location (this according to former employees) – where is the consumer’s choice? Albertson’s/Safeway prices have been sometimes up to double the dollars for the same product at a different store. Now, if I put myself into the shoes of a low(er) income family with children, that has them either forego other things the other, better earning half enjoys, or drive farther in order to buy at a more decent price.
As to buying bulk – the US consumer is also wasting large amounts of food BECAUSE of the ironic thought that buying bulk was cheaper. If I toss out food because it goes bad, and I have to buy new and toss out half again, the math is simple. If I buy what I use, I buy cheaper. Bulk and big is meaningless if I have to toss.
That being said, somebody who buys groceries conscious of price and quality travels a lot when living in this area. Which means that some people might have to make the decision of spending on gas money versus grocery money.
In short, monopolies only serve those who own them. That’s why those who sell, aim for them, and most of those who buy, oppose. Even IF they can afford otherwise.
Free market economic theory only works when there are multiple companies competing for sales. Monopolies have never fit into this model. If I understand correctly, the argument against this merger is that it would create monopolies in multiple markets.