[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.
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