Albertson-Kroger Merger: bad for local community food security/food access, bad for local independent grocers, and bad for worker’s rights.
By Abraham Zavala-Rodriguez, Outreach and Advocacy Associate
Business boomed during the COVID-19 pandemic. We were encouraged to stay at home and therefore ate more at home and used more utilities. Food costs increased, demand was high, and people continued to work through these difficult times. Grocery workers, distribution workers, and meat packing workers became sick and died as a result of COVID-19. Profits for these big grocery chains soared at historic rates while deaths increased among frontline workers.
When you go to the grocery store, you see shelves and shelves of goods – from canned goods to diapers to fresh fruits and vegetables, to dairy to poultry. What you may not think about as often is the labor and logistics that went into stocking those shelves.
Truck drivers bring food from across the country from warehouse centers to the store sites. Workers unload the truck and stock the shelves early in the morning and late at night, and others inspect the deliveries to assure the best quality.
Depending on the grocery chain; you’ll see grocery store workers alongside personal shoppers fulfilling digital orders via an app. The grocery industry is evolving and profiting post-pandemic. Fierce competition is scaling up amongst big corporate grocers.
In a move that will impact everyone from employees to grocery shoppers, Kroger announced its plans to acquire Albertsons for nearly $25 billion almost a year ago. This move would combine two of the largest grocery chains nationally. The deal creates a grocery chain amassing 5,000 locations across the U.S. Kroger representatives claim that it is the best option in balancing competition against Walmart and other big brands.
However, a study by the Food and Water Watch groups found that between 1993 and 2019 the number of U.S grocers fell by 30%. The U.S Department of Agriculture found that between 2005 to 2015 the market share of local independent grocers dropped in 41% of counties across the U.S.
Small mom and pop businesses and your local bodegas or mercaditos will continue to get boxed out amidst consolidation of big corporate chains. These closures impact areas typically already experiencing food access issues. The top five grocery chains own half of the entire market, with Walmart dominating a quarter of the overall market share.
At the beginning of this month, Kroger and Albertsons announced it will sell 400 stores to C&S Wholesale Grocers, a move meant to ease the approval process. 66 of these stores are in California. The deal is pending approval by the FTC. Make no mistake, these big grocer cartels control food prices and will hurt local economies no matter how many stores they sell to get federal approval.
The California Attorney General’s office has expressed serious concerns with the merger. The Attorney General has the power to review and stop mergers that are anti-competitive and will cause serious harm to consumers.
This ongoing shift of large operators consolidating will allow them to dominate price negotiations with suppliers further impacting small local operators, increasing prices and diminishing access to food.
This merger also touches on Black and Latinx health and access to medicines. A recent USC study showed that Black and Latinx communities lack access to pharmacies. 2,254 Kroger stores have a pharmacy in store while 1,700 Albertson include a pharmacy onsite. The concern is that the merger will lead to low performing stores with pharmacies closing, widening the pharmacy access gap. Millions would have no place to pick up their medication or would have to go long distances to do so.
Community advocates and labor groups have spoken out against the Kroger-Albertsons merger, saying the move will hurt everyday people by raising prices and impact the livelihood of grocery workers. Less competition means chains can raise prices and consumers will have few, if any, other options. The same goes for employees, who have less bargaining power and fewer choices if they want to find a different job.
Alarmingly, the merger will lower wages for 746,000 grocery store workers in over 50 metropolitan areas of the U.S.,” with total annual earnings dropping by $334 million in those locations.This will impact all workers across these major cities, not just those Kroger-Albertson workers.
“These major corporations are playing monopoly with the livelihoods of our communities because they have only looked at our communities through the lens of dollars and cents and never through the lens of humanity. People who live in these communities that will soon be abandoned with no resources to rely on are tired of the white flight mentality that has continually been perpetuated by CEOs who only came to the neighborhood to take the community’s resources until they are dry,” says Christopher Sanchez, Policy Advocate for Western Center on Law and Poverty.
As the merger remains under Federal Trade Commission (FTC) review, community groups and labor remain vigilant and in opposition to the latest monopolization by large corporations over food price and access.
The United Food and Commercial Workers International Union (UFCW) opposes the merger. According to UFCW, Kroger has not been responsive to calls by the union to be more transparent about the deal.
Governor Newsom has the chance to stand once again with working people by signing UFCW-sponsored Senate Bill (SB) 725 by Senator Lola Smallwood-Cuevas and offer grocery workers an important and much needed safety net. This bill would ensure corporations are held accountable to employees who are laid off due to a merger or acquisition by providing workers with one week’s severance pay per year of service. While the field will never be equal, this bill provides workers and their families with important economic safety protections when mergers and corporations devastate local communities and push them deeper into poverty.
Help urge Governor Newsom to sign this critical bill into law by sending him a quick email.
We must stop this merger and all large agribusiness mergers in its tracks. Agribusiness grows and continues to make horizontal and vertical growth in the grocery industry, further cornering the market in the hands of a few.
We must support stronger enforcement of antitrust measures and uplift leaders that will champion a stand against powerful corporations impacting our food economies.
We must continue to push state and local governments to champion the rebuilding of local food economies and try different paths. One way is to find alternatives that are controlled by local communities. One example is Mandela Grocery in Oakland, California, a food worker cooperative. Workers share in the profits and decision making. They source fresh products from locally owned Black farms. The local community and workers have a say.
We must not forget the workers who kept us fed during difficult times, times they were experiencing and enduring too. Hundreds of thousands of people became unhoused and turned to SNAP benefits, known as CalFresh benefits in California, to get by because wages did not increase significantly. As communities with low incomes, communities of color, seniors, people with disabilities, and children continue to recover, this merger and others like it will only increase avoidable food insecurity.