Kroger Chair and CEO Rodney McMullen said he is confident about the retailer’s position in its pending merger with Albertsons, as final arguments are set to begin 17 September in the federal court case that will decide whether it moves forward.
McMullen is optimistic about closing Kroger’s merger with Albertsons this year, despite opposition from the U.S. Federal Trade Commission, U.S. congressional representatives, and some labor unions.
“As we near the close of the FTC's preliminary injunction hearing, we are confident in the facts and the strength of our position,” McMullen said. “The food industry has always been competitive and will continue to be after this merger. We are committed to closing this merger because bringing Kroger and Albertsons together will provide meaningful and measurable benefits – lower prices, secure jobs and expanded access to fresh, affordable food – for customers, associates, and communities across the country.”
During the most recent hearings in U.S. District Court in Oregon, McMullen and Albertsons CEO Vivek Sankaran claimed the merger would allow both companies to lower prices and effectively compete with retail giants like Walmart, Costco, and Amazon, the Associated Press reported.
Opponents to the merger state the exact opposite.
“A Kroger and Albertsons merger will mean higher prices and an even tougher time finding a pharmacy,” U.S. Representative Pramila Jayapal (D-Washington), who is also the U.S. House Finance Committee chair, said in a press release. “Blocking this merger would give mom-and-pop shops a strong line of defense against corporate giants – all while protecting our rural communities.”
Outside of court, Cincinnati, Ohio, U.S.A.-based Kroger raised its earnings guidance for the remainder of the year. The company’s sales hit USD 33.9 billion (EUR 30.1 billion) in the second quarter of 2024, remaining nearly even year over year.
"Kroger achieved solid results in the second quarter, demonstrating the strength and resiliency of our model. We are growing households and increasing customer visits by offering a compelling combination of affordable prices and personalized promotions on great quality products, all through a unique seamless experience,” McMullen said in the company’s Q2 2024 financial report.
Kroger’s long-term model is to “consistently invest to lower prices so more customers shop with us, which, in turn, fuels our alternative profit businesses and drives greater efficiencies,” McMullen said. "This flywheel enables Kroger to deliver exceptional value for customers and invest in our associates, and by doing so, we are well-positioned to generate attractive and sustainable returns for shareholders."
As a result of what he called "solid sales results" in the first two quarters of 2024, Kroger Interim CFO Todd Foley said the company is raising the low end of its full-year identical sales without fuel guidance by 50 basis points. Kroger now expects identical sales without fuel to be in the range of 0.75 percent to 1.75 percent.
“Our positive customer trends are driving sales momentum that we expect to continue in the second half of the year,” Foley said.
