Kroger and Albertsons Court Public Support for Merger by Leveraging Inflation Anxieties

As Kroger and Albertsons’ pending merger faces criticism, the grocers are courting price-sensitive shoppers’ favor.

In a co-authored op-ed in The Cincinnati Enquirer, Kroger Company CEO Rodney McMullen and Albertsons Companies CEO Vivek Sankaran pushed back against opposition to the proposed merger. The piece addressed claims that the combined company will use its power to demand lower prices from suppliers, reports that the merger will result in widespread closures and concerns of layoffs and risks to union jobs.

The two CEOS especially sought to court public approval by contending that the merger will lower prices, dubbing the op-ed “Kroger-Albertsons merger will deliver lower prices, more choices,” as consumers’ anxieties around rapid food inflation prompt them to look for more affordable options.

“Customers look to us to provide high-quality, affordable groceries — particularly today. At Kroger, our business strategy is to lower prices year over year, attracting more customers and earning their loyalty,” McMullen and Sankaran wrote. “We have seen claims we will lower prices by squeezing farmers. This is simply not accurate. … As a combined company, Kroger and Albertsons … will offer lower prices and more choices on products customers want, need and love.”

Certainly, these concerns are top of mind for many consumers. Research from the March edition of PYMNTS’ Consumer Inflation Sentiment report, “Consumer Inflation Sentiment: The False Appeal of Deal-Chasing Consumers,” which draws from a survey of more than 2,100 United States consumers, revealed that 44% of grocery shoppers are deal chasers, willing to go wherever they will get the best price.

The study also found that two-thirds of these shoppers cited prices and discounts as key factors influencing their decision of where to make their most recent grocery purchase.

In addition to appealing to consumers’ price anxieties, McMullen and Sankaran also stated that Kroger has “committed” to divested stores remaining open and asserted that “no frontline workers will be laid off.”

The op-ed comes amid growing opposition to the merger, which was announced back in October. For instance, Stop the Merger, a coalition whose partners include more than 120 organizations spanning political advocacy groups, lawmakers, religious organizations, farmers’ groups, a handful of unions and more, has been pulling together to push back on the deal and communicate that sentiment to the Federal Trade Commission (FTC). Additionally, consumers and politicians alike have been suing to block the merger.

Yet, McMullen and Sankaran’s appeal to consumers’ food price anxieties could be effective, given how front-of-mind these concerns are for many shoppers. In an interview with PYMNTS, Sean Turner, co-founder and CTO at retail technology company Swiftly, noted that consumers have become more deliberate in their grocery shopping, making purchasing decisions based on price comparisons.

“Shoppers are clipping more coupons,” Turner said, noting consumers are putting more planning into their grocery shopping trips. “They’re really trying to compare prices across different stores. They might go to the Walmart website or app and see what the product costs there, then launch [another retailer’s] app and search for the same product there to see where it’s cheapest or where they can get a coupon or a discount.”