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.
> 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].
Together with agreements that include gag orders, this is an example of an agreement between two parties that harms society outside the two parties that are making the agreement and thus should not be legal.
> The city should buy the land under ED and then rent out the space preferentially to another grocery store.
As I understand it, there is mixed case law on whether and when restrictive covenants constitute property interests of the beneficiaries which must be separately compensated in ED condemnation.
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.
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 ...
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.
Yeah. There's an Aldi's very close-by in basically the parking lot of a Walmart. Have peeked in a couple of times but basically nothing to interest me. Seemed like going back to a grocery store of a couple decades ago (with probably lower prices).
And there is a reason for that as TJ’s and Aldi are owned by brother German companies, Aldi Nord and Aldi Sud, and both operate on the German grocery model.
Aldi's is an outstanding example of the inefficiencies of micro management / JIT. Coin for grocery cart wastes time messing around to get a quarter & lock driving away customer volume that more than pays for an employee to push carts back. Leaving the items in the container wastes shelf space & time by disallowing spring loaded or gravity dispensers & senselessly manually drags the boxes into the store as almost all of the boxes then are taken back out once noticed by an employee. Also, in contrast to the individual empowerment theme, but with the anti-customer view lacks self service kiosks & usually have 1 lane open that blocks with large volume customers & no dedicated x items or fewer lanes. The floor plan sprawls proportional to economies of scale & is divided appropriately by interest in contrast to Aldi that has random furniture between grocery.
> Coin for grocery cart wastes time messing around to get a quarter & lock driving away customer
driving away exactly the sort of customer Aldi doesn't want to deal with. this policy isn't for cart pusher wage savings, it's a soft filter to screen out a whole class of people who get disproportionately angry with minor inconveniences.
i've never been to an Aldi, so i have no experience here. i can't remember the last time that i carried change in my pockets leaving the house. i only have change on my for as long as it takes me to get home from receiving said change to put it away in the "someday i'll cash this in jar". walking up to an Aldi to see this as a first time customer would definitely sour me. it's not like a laundromat where you know well in advance you are better off showing up with change rather than expecting the change machine to be in working order.
You don't keep change in your car? What if you have to go through an unexpected toll? Or is that not a thing anymore (I haven't driven in a long time)?
you don't even need to keep change. aldi will spot you the quarter and never ask to be repaid. the point is you have to ask, which involves cooperation rather than entitlement.
the whole process is about selecting for clientele who are willing to recognize that they have some obligations as a customer to work with the model on an individual level if they want to maximize its effectiveness on a group level.
its just the same group psychology behind coupon clipping in a different disguise.
I went there first time this spring. Like you, I do not carry change, and they wouldn't break a dollar unless I purchased something. Prices were not all that great and there was a laughable selection of anything. They had one cashier who couldn't be troubled to move quickly, and she was seated.
There were a few of the stores here and there and I noticed the parking lots were always empty. I guess pissing people off before they buy something is bad for business.
I really appreciate how succinctly you’ve identified it. A soft filter is exactly what it is and right off the bat they’ve relieved themselves, and the customers they desire, of the type of people they’d rather not have to deal with.
Around here (Germany, Hamburg, inner city and western outskirts, have no other recent experience) it's often unnecessary, since the chainlocks are mostly 'cracked', broken nowadays. Just grab one. They lock up anyways, if you try to move them off of the premises via some mechanism embedded in a bulge above one frontwheel, triggerd by induction wires embedded in the ground of the parking space. Regardless of Aldi, Lidl, Edeka, Rewe, Penny, Netto, whomever...
> Coin for grocery cart wastes time messing around to get a quarter & lock driving away customer volume that more than pays for a young adult to push carts back.
This is a claim. Is there evidence? Especially at a reasonable wage for a human being (which is not federal minimum)?
> Leaving the items in the container wastes shelf space & time by disallowing spring loaded or gravity dispensers
Shelf space: Aldi seems to do a pretty good job of keeping everything they want to put out fronted. As for spring or gravity dispensers, I can go look around a different supermarket and the only place I see gravity dispensers is in some (not all) drink coolers and some (not all) spices. If they showed efficiency bonuses, I'd suspect that we'd see them more.
> lacks self service kiosks & usually have 1 lane open
No self-service? Sure. One lane open? Not where I am. There's usually multiple open and even when there are, with three carts in line, they call another cashier.
GP is right imo. You can literally just walk straight into Aldi and ask for a quarter if you forgot one. They’ll give you one. Takes 2 seconds. Alternatively, as illustration not an accusation, If you’re walking around grocery store fuming about the time you lost thumbing a quarter into a shopping cart, that’s a personal problem.
exactly. it's not about the 25 cents, it's about cultivating a customer base of prosocial people who aren't habituated to anger at petty inconveniences.
The coin/token lock is used in all stores in Finland, I've never had a problem with it in winter. Sometimes I'm in the store without a token (I never have coins) but there's usually a cart unlocked already, since you can get the token out without locking the cart if you fiddle a bit.
I live in Boston. I've never had a problem with it. But that isn't related to what you actually said. Do you have any evidence that the amount of customer discouragement pays for an employee?
I'm intrigued on the math for things like gravity-feed dispensers. I've only seen them for a few canned items in my local markets.
I'd expect they consume a fair bit of stocking labour to feed the cans in one at a time, and possibly dealing with malfunctions or breakage, compared with "pull the front off the crate and slide it onto the shelf"
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.
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.
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.
More interestingly, and even strangelier, however, the Goodwills around here take electronics for resale and put it all on the shelves without verifying that anything works at all. I returned an item once because it started sparking when I turned it on. I could not get my money back, they don't do that, only in-store credit for the amount paid, good for only 30 days, and only at the same store as the original purchase. Fat chance that I found anything there on which to use a credit of $60 or $70 within a month. But I went back the next week to look for anything plausible. The same piece of smoldering dumpster-fire trash I had returned was back on the shelf.
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.
I can get in and out of my large nearby grocery store in 10 minutes just fine and they have everything I could possibly want. I'm not price-sensitive and that's the real difference between that store and Aldi, completely different customer cohort.
I am not price sensitive and Aldi’s is great. First, most of the missing food products are the sugary highly processed junk food that I don’t want to wade through, plus there are a good number of euro items that I prefer. Second, I don’t have to go through the cognitive exhaustion of wading through 29 types of peanut butter. Thirdly, is really is faster, a lot faster. I can have half my shopping done in the time it takes to find the aluminum foil in the big store.
Except I'm not price sensitive either and mainly shop at Aldi because it is much faster. Obviously a lot of people are there for the prices, but the size is a big draw too.
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.
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.
Article quotes Haggen's blame. I'm quoting my friend who was CFO for a regional chain.
Stuffing Labor is just as loathsome as private equity stuffing all other stake holders. Though I'm certain Labor suffered during the last debacle, I'd accept that it was just a happy side effect and not the primary motivator.
Prior covert Union busting is worth noting given the corptocracy's current well publicized jihad against Labor.
Kroger and Albertsons employees are both represented by the UFCW so it'll probably be pretty union-neutral. The Safeway employees were also UFCW I think before the merger.
Interesting. I'd've guessed that contracts are negotiated per owner. But I don't actually know. I will ask my buddy (former CFO).
My old neighbor was a union organizer. eg had bumper sticker that said "QFC: Rewarding hard work with low wages." He explained to me that new owners Kroger were roughing up the smaller QFC union before going after Fred Meyer's.
Aside: So sad. I grew up with QFC. Beloved. Kroger sucked it dry. I understand why QFC had to sell out. Those who didn't got ploughed under. But it's still unfortunate.
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.
That said, landlords often try to not allow “going dark” and paying rent. Usually, grocery is an anchor, and the rents at the smaller stores are higher per square foot. Those will close if the anchor closes and stops advertising the location. Not to mention crime increases, etc.
On the other hand, grocery store sizes are weird for other uses, and there can be a small set of interested parties. And if they are all a pass, then you have an empty store. The original store left for a reason.
The Vons near my work had contained a Panda Express, Starbucks, and Wells Fargo. When it converted to Haggen, it lost the first two. When Haggen closed, the building was partitioned and the Wells Fargo remained open in the front corner for a short while.
Eventually, the larger half of the partitioned building became a Smart & Final, the smaller side became a Dollar Tree, and the Wells Fargo and Panda Express reappeared in the adjacent strip mall.
> 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.
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.
Around once a week or so I'll cook something novel but it is a special occasion, but there's a good chance I'll pick it up at a farmer's market or the quirky healthfood store.
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.
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 ...
we have a few krogers near where i live but i didn't even realize albertsons was a big chain until recently since i'd never actually seen one irl. but yeah everybody around here knows kroger is shit and literally any of the other many stores is better. overpriced, bad selection, the worst quality produce and meat, employees aren't very helpful. thankfully there's a ton of other selection.
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.
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.
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 :-)
>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."
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.
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.
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
Programs like SNAP, the earned income tax credit, subsidized child-care, and refundable tax credits for children have an immediate impact. Legislation could also provide a universal basic income.
If that's too pink a set of approaches to reduce the impact of poverty for you, governments can also subsidize development of new housing and invest in infrastructure upgrades that draw folks with higher incomes into a community. This works best if you are in a metropolitan area. In rural communities, it's not uncommon to pour great sums of money into courting large employers, giving them land or tax free status for extended periods.
Hell, if your goal is just to get a grocery store, pour on enough subsidies and someone will show up to collect that money.
Place where I used to live shut down the main bus line in the poorest part of town. The result was people couldn't easily go to the local (small) market which then closed. The result was going from a 10 minute bus ride to almost an hour one way. The old line had quite a few stops along the way, so residents with a few bags of groceries didn't have far to walk. The new route had one stop which was placed far from the residence area.
It's incoherent to use the example of low service density as a justification to criticize a grocer for taking higher profits. You can't pursue both sides of a tradeoff simultaneously.
The more money there is to be made in the grocery sector, the more grocers there will be to compete for it, located in the places where the money flows. Likewise the leaner they have to operate, the more they'll shut down in marginal territory that can't support their business, and the more areas will go without convenient access.
If selling groceries in low-access areas for low profits is indicated by the necessity of food, then nobody is stopping you from doing it; but as the grandparent comment hinted, if you find your niche in high-margin software instead then you're following the money, just like grocers do.
Why should a company that provides no differentiated value have much of net margin (after paying for the cost of capital, in the form of debt payments which are included in company expenses)?
Kroger et. al provide no unique value - they don't have any intellectual property, they have almost zero human capital because they treat their workers terribly and have low retention. They do some stuff with their private labels but that's really it. What grocery stores doing that commands more than a 1 or 2% margin on a huge segment of the economy? If they're earning more than that it is probably and indication that they are ripping off the consumer, ripping off the worker, or both.
> What grocery stores doing that commands more than a 1 or 2% margin on a huge segment of the economy? If they're earning more than that it is probably and indication that they are ripping off the consumer, ripping off the worker, or both.
They are not earning more than that. Kroger's net margins were 1.7%. That was the entire point of my post.
You can rescue your profit margin by paying high salaries to executives and have a ton of administrative overhead. That’s how health insurance works. The profit margin says nothing about how efficient the company is.
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.
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.
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.
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.
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.
The margins on food aren't actually low; they've just been captured by Smithfield, Chiquita, Tyson, JBS, Cargill, Archer Daniels Midland, etc. Farmers certainly aren't seeing any margins!
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.
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.
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).
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.
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
Every thing in my cart increases by a penny. It (the cart, my food) now costs $2 more. Easy math. Change that to percentages and amount increases, of course.
They do play with pennies. I worked in a huge national restaurant chain as a teenager and went through numerous menu updates. They were always flipping nickels and pennies all over the place on the menu. As a kid I thought changing the menu prices by five cents was ridiculous. Apparently, that's how it works in this business with razor thin margins.
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.
> Why would you not expect nominal profits to be at all time highs if the purchasing power of the currency goes down?
Purchasing power doesn't magically decrease, it's a function of increasing prices.
Think about for a little. If a companies input costs have increased by 10% their profit will decrease right, maybe not by 10% but it will decrease. So if they increase their prices they can get back to their previous profit level. Instead they have increased prices even more such that their profit is HIGHER than it was before inflation.
Obviously, a 3% profit margin after a year of inflation is going to be nominally higher than a 3% profit margin before the year of inflation.
Hence any whining about nominal increases in profit is innumeracy, or clickbait, especially for businesses that play in the sub 5% profit margin ranges.
How low do people think grocery store profit margins should go? Have they tried successfully operating a business at 3% profit margin?
Some businesses’ profits are keeping up with inflation, and some are not. Grocery stores sell relatively inelastic goods at already low profit margins, so there is not much room to not keep up with inflation. The other option for them would be going out of business.
The stock market hasn't been connected to reality for years. Companies which produce nothing and are deep in debt have high stock value purely on basis of speculation. Most companies that report layoffs, tough times etc also report record levels of profit because it's not enough to be profitable, you have to go well above and beyond profit. You have to squeeze out everything even at the cost of short term stability.
Which companies that produce nothing and are deep in debt have shown growth in market cap?
From what I can tell, the biggest gains have been at companies that have very strong profits and prospects due to high barriers of entry to their business, and the companies with steady but small profits do okay, and the companies not earning any profits have shown losses.
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".
Over 50% of the rise in prices for groceries during the pandemic are from corporate profits. Raises in input costs (38%) and labor (7%) made up most of the rest. When the price raise is 50% increased profit during a time where a large fraction cannot afford enough to eat this is price gouging. It is extremely clear.
Kroger gross profit is up 10% last year, but was up 0% the year before.
Overall, the nominal growth over 10years is 60% ($18B to $30B), mostly due to a bull run around 2015, and overall rather modest compared to inflation.
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."
it never had that meaning. it's a concerted effort by democrat politicians and media: they say "price gouging" because that's something most people agree is wrong when it's actually normal economic behavior in response to both parties' really stupid economic policies. they're doing this because they want more control of pricing and that's how they're going to lie their way into it and spread disinformation about what's happening.
edit: updating with proof, Texas state definition is "selling or leasing fuel, food, medicine, or another necessity at an exorbitant or excess price, or demanding an exorbitant or excessive price in connection with the sale or lease of fuel, food, medicine or another necessity."
In 3 years, food is up 20%, after several years of extra low inflation, but raw produce is up much less. That's frustrating, and faster then some people's wages, but not extreme.
People who can't afford that should unionize and get paid more for their work, not get weird price subsidized from vendors.
There is cause for concern that prices will continue to increase
have you ever started a local? half the time you can't get a national to commit legal resources so you're screwed if the employer doesn't agree to card check, which they won't
then there's the question of does the union have any real leverage, which varies a lot by industry and trade. ufcw for example has failed both in securing real wins for grocery workers AND in pushing against price gouging by grocers
after being failed by nationals (for me it was usually cwa), tried going more wildcat but iww are just as ineffectual for different reasons, then got involved in the co-op space but groups like usfwc are just as ineffectual for still different reasons
no they're not. price gouging is extreme price hikes or exorbitant pricing not your groceries being 15% more expensive. it's literally a word with a meaning and people are 1. intentionally misusing it to push an agenda of increased state intervention in pricing or 2. accidentally misusing it because they can't be bothered to understand what their words mean. "price gouging" is a false narrative politicians are using to shirk responsibility for insanely irresponsible fiscal and monetary policy, because now they want to "solve" it by grabbing even more government power because what could possibly go wrong with that.
"selling or leasing fuel, food, medicine, or another necessity at an exorbitant or excess price, or demanding an exorbitant or excessive price in connection with the sale or lease of fuel, food, medicine or another necessity."
> 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.
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.
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.
>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?
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.
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.
With the rise of e-commerce, I don’t really see the allure of one stop shopping.
I live in the PNW and almost never go to Kroger/Safeway stores. I just want groceries, I don’t want to have to wade through endless cruft to get there.
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]
> 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.
A big shout-out for Winco--albeit their ~140 stores is dwarfed by the Kroger, Albertsons, and Publix triumvirate. Winco is without a doubt the best non-luxury grocery store I've been to in decades.
How did tiny Boise, Idaho birth both the worst mega-grocer (Albertsons) and one of the best?
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.
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.
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.
The one across the street from where I live does quite well, and compared with the QFC up the street, I prefer it. It doesn’t have a meat counter or fresh bakery (stuff is clearly trucked in), but for most stuff, I prefer it and can also return Amazon packages there.
But Amazon already has a big PNW chain (and nationally, too): Whole Foods
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.
It's not like this is a secret or a conspiracy, and it's not done to trick customers into thinking there is fake competition. Customers don't care about competition or antitrust when they shop for cereal or deodorant.
This kind of thing generally happens because brands being acquired by a new parent company already have a brand image and some amount of customer loyalty, and targets a particular price bracket or demographic. Rebranding the products would be bad for business.
People bring up the same kind of argument when they talk about Luxottica making many of the famous brands of sunglasses, as if it's a conspiracy or somehow makes the product evil or inauthentic. I don't get it. Products should be evaluated on their own merits, and branding is not evil per se.
I'm in Metro Atlanta. Near me we have: Walmart, Target (our local Target has full grocery), 3 wholesale clubs [Costco, BJs, Sams Club], Aldi, Ingles, 2 local chains (largest is Food Depot which is all over the region), Piggly Wiggly, Kroger, Publix, and Asian and Hispanic supermarkets. Elsewhere in the metro area there is Lidl, Trader Joe's, Whole Foods, and probably others I'm not thinking of.
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.
At the grocery chain I worked for, the store brand cereals were from Kellogg's but if you bought a box of store brand and a box of Kellogg's, you'd quickly discover that the store brand was inferior. For some thing like Corn Flakes, the store brand had smaller flakes, lots more corn flake dust, and burnt pieces. I suspect that Kellogg's has some sort of QA process that on the production line separates what's good enough for their brand from that which gets sold as store brands.
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.
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".
Eliminates the illusion of competition. Genuine competition is not about creating different brands with slightly different characteristics in order to attract different market segments, but about different brands competing for the same market segment.
Much of the American Myth is predicated on the idea that capitalism produces competition and therefore people can trust that what is available is the best quality at the lowest price. If people aren't fooled into thinking that there's actually competition, they'll be willing to go farther afield to find a competitive option.
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?
People are creatures of habit and some would stop shopping at Ralph's if it became Kroger even if nothing inside changed. At a store I worked at as a teen, we had two vendor supplied quarts of milk with the same UPC code but different brand labels because some of the shoppers had been drinking one brand since their childhood and refused to buy anything else. They had long ago been bought out by a competitor and it was the same milk in both brands' cartons but the customers wouldn't listen if we tried to explain that. Sometime one brand would run out and the customer would simply come back another day even though the exact same milk, from the exact same company was right there on the shelf, just with a different brand on it. As far as store inventory was concerned, they had the same SKUs and UPCs, but we had to ensure enough of each carton brand was delivered by the vendor or risk unhappy customers.
That is a good point. Maybe I will write a mobile app where you can scan a UPC code and it will tell you who really makes it. And something similar for all the big stores.
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.)
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.
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.
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?
If prices go up, it is inflation, whether it is caused by cartel pricing or by the traditional "too much money chasing too few goods". I'm suggesting, and there seems to be good evidence for this, that when economies were first opening up as Covid restrictions were eased it was mainly the latter problem, but now it is mainly the former problem.
We had FIVE stores when the local chain owned them. Kroger bought them out, and slowly closed them. Each neighborhood had its own Kroger.
They built a shiny new big store where an old A&P was. And then, closed the two reimagining "old" Krogers.
It was great at first, huge bakery, a cheese section, olive bar, all new coolers etc. But the store quickly went to crap. It's also packed because half the city is there in any given day.
They bragged about spending millions refreshing the store, but they can't even have more than 2-3 checkout lanes open.
This has all gotten worse during the pandemic. It's almost as bad as Walmart now.
I have both a Kroger and a Publix within a three minute drive of my house and within a couple blocks of one another. I willingly pay 25-50% more to shop at Publix because Kroger is such a nightmare. The store is filthy, the meat section always smells bad, the produce goes bad within 24 hours if it's not already spoiled on the shelf, and they never open more than two checkout lines despite the fact that it's the busiest store in the area. You often end up waiting 15 minutes just to use the grimy self-checkout kiosks. This is also one of the "nice" Krogers with the fancy cheese section etc. Meanwhile Publix is always immaculate, the employees are friendly and helpful, they almost always have all their checkout lanes staffed, and the quality of the meat and produce is worlds better. I think Publix has been deliberately moving in close to Kroger locations in the south because they know they can jack up their prices and still find people practically begging to shop there because the experience at Kroger is so unpleasant.
> they can't even have more than 2-3 checkout lanes open
Long lines at limited checkout lines is awful. Supermarkets do it because they don't want to hire more staff. Consumers notice it and will shop elsewhere... unless they live in a place where there are no nearby competing supermarkets.
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.
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.
"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.
- 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.
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"?
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.
Nobody shops for groceries on a nationwide basis. Grocery shopping is local. In terms of its local effects around here, this merger will be insanely bad for both consumers and producers, and should not be permitted.
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.
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).
When I worked at an Albertson's subsidiary store, there was a bunch of stuff that was "on sale" 3 out of every 4 weeks, but the "sale" price was the real price and you'd just get ripped off the 4th week.
The crazy part is a good portion of the population prefers feeling like they got a deal because something is “on sale” rather than just paying a lower non sale price.
See JC Penney’s disastrous experiment with removing sales/coupons and just offering low prices.
Harbor Freight is going through a variation of this now. They used to be famous for their coupons that were so easy to obtain that the shelf price might as well have been the coupon price. Changing over to just having the shelf price be the true price has been poorly received by a good chunk of regular shoppers there, even though what they really did was get rid of the ceremonial dead chicken waiving of using coupons. Haven't checked recently but I think they've started reintroducing coupons because people loved feeling like they were getting a special deal even if they weren't.
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.
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.
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”.
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.
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.
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.
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.
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.
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. :(
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.
This is a truly horrible trend. A huge failure of one of few the things almost all agree government is for. Where I live in California I have decided that besides Best Foods mayo and a couple of items like corn syrup for pecan pie once a year, I have no reason to walk into a chain grocer and instead buy locally from produce stores in my neighborhood or from Trader Joe's which has both excellent quality and excellent value if less SKUs. It has greatly improved my life as a consumer.
A tangent, but after one thing I miss after moving to the west coast is the Michigan chain Meijer. I didn't realize how nice Meijer was until my only two options for a standard grocery store were Safeway and Walmart. And after reading the comments, I hope they stay afloat for a long time. In my mind, they are the perfect grocery store.
I don’t like consolidation like this one bit, but assuming that the deal does fail, doesn’t that leave the PE firms owning an asset with no operating cash, while only having cashed out about 17% of the value?
It seems unlikely that they would engineer this with the exception that it would fail, thus destroying their company.
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:
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.
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.
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)
Every Walmart I shop at has a full service deli counter and bakery. The deli counter stocks unique items that would be rare or special orders anywhere else in town. My experience may not be universal, but it at least falsifies yours as being universal too.
Oh, I believe that - they are supercenters, and I that's especially true in rural communities. Walmart also has pure grocery stores (often much smaller). That's not the case with Target or the others. In the bay area, most the walmarts are not supercenters. I think maybe 2/12 or so are.
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.
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.
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.
> 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.
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.
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.
It's typical for PE to pay themselves well. The next step is to load the vehicle up with debt and shop it out. If it tanks (Toys R Us etc.) then no biggie for the PE's partners, they didn't shop there anyway.
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?
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.
I’m amazed when people think that societal issues can be solved by better regulations. This time we’ll get it right and be benevolent! This time!
Completely ignores history / human nature.
The genius of part time politicians and limited government was that it protects us from ourselves. We are indeed our own worst enemy. The only incentive for public service should be public service. The lack of skin in game with huge upside leads to idiocy like million dollar bus stops, 10k toilets and anti-trust enforcers becoming m&a lawyers.
Career politicians and lobbying plus the “retirement” back door to Wall Street, consulting and big business in general has completely distanced the US government from those who it purports to serve. At this point it’s basically like an asshole king who uses the monopoly on taxes to enrich themself. Except that the asshole king is a cohort of a class of people and Wall Street.
In hindsight this is inevitable. At least the previous monarchy believes in noblesse oblige.
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.
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.
There’a no consistent definition of market capitalism in these types of forums. The fact of the matter is that under a laissez faire model, this type of behavior is expected. Claiming otherwise is simply the no true Scotsman fallacy.
In a free market, a few players can buy the market and make it un-free. Capitalism certainly includes manipulating markets so as to increase the return on the capital.
>Amusingly, the law firm representing Kroger is Arnold & Porter, whose antitrust practice is headed by Debbie Feinstein, the Obama era FTC Bureau of Competition Director who actually approved the Albertsons/Safeway merger and its laughably stupid remedy.
Not necessarily. Biden's head of the FTC is strikingly unsympathetic to big mergers and other large business shenanigans.
Obama's presidency was awful. Every promise to the center/left broken, and a huge, continuous giveaway to the right, who repaid him by slapping him in the face. He implemented Romney's healthcare plan. He kept the bankers out of jail / gallows after the 2008 crisis -- "Too big to fail". (The bankers repaid Obama's kindness by heavily funding the GOP.) He kept us in Afghanistan. And Republicans hated him for giving them everything they wanted. So frustrating to watch.
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.
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.