Corporate Profiles - 2024 - 90

COMPANY overview
The Kroger Co.
D
ecision time may be nearing for The Kroger
Co. regarding its $24.6 billion deal to acquire
Albertsons Cos., which would be the
largest-ever US supermarket merger.
At the end of September, a ruling was pending
in an Oregon federal court on a Federal Trade Commission
request for a preliminary injunction against
the merger. The FTC in late February had filed an
administrative complaint and a lawsuit (joined by
eight states and the District of Columbia) to stop
the transaction. But in mid-August, Kroger sued to
toss the FTC complaint, calling it unconstitutional.
Earlier, in July, Cincinnati-based Kroger agreed to
suspend the transaction and hold a Sept. 30 trial
Landmark merger with Albertsons uncertain
as regulatory scrutiny intensifies
meaningful and measurable benefits for customers,
associates and communities across the country. "
Announced in October 2022, the Kroger-Albertsons
deal would create a company with revenue
of $210 billion and 4,996 stores, 66 distribution
centers, 52 manufacturing plants, 3,972 pharmacies,
2,015 fuel centers and 710,000 employees
in 48 states and the District of Columbia. A September
2023 divestiture deal with C&S Wholesale
Grocers was expanded this past April to a $2.9
billion package including 579 stores in 18 states
and DC; eight distribution centers and additional
warehouse space; and five private labels, plus access
to two other brands. For fiscal 2023, Kroger's
sales totaled $150 billion, with 2,722 stores.
Private label remains key to Kroger's growth
Chief executive officer -
Rodney McMullen
on the merger's merits after Colorado sued in midFebruary
to halt the deal. And in Washington, a trial
got underway Sept. 16 after a judge in April allowed
the state's suit against the merger to proceed.
Kroger sees the Albertsons merger as a way to
build scale to better compete with mass chains
like Walmart, Costco, Target and Dollar General
and discount grocers and online retailers like Aldi
and Amazon, which have seized significant grocery
retail market share from traditional supermarkets
over the past few decades.
" We are confident in the facts and the strengths
of our position, " Rodney McMullen, chairman and
chief executive officer of Kroger, told analysts in a
second-quarter conference call. " We remain committed
to closing the merger because it will provide
90 \ October 2024
plan. When the Albertsons merger was announced,
the companies fielded a combined 34,000 private
brand products, a portfolio that generated fiscal
2023 sales of $47.5 billion.
Acquiring Albertsons also dovetails with Kroger's
" leading with fresh and accelerating with digital "
strategy, built on the " competitive moats " of " fresh,
Our Brands (Kroger's private label portfolio), personalization
and seamless. " Kroger has prioritized
an enhanced fresh food offering, noting that over
90% of customers buy fresh items and 70% of consumers
decide where to shop based on fresh food.
Kroger has tapped UK online grocery specialist
Ocado to build a network of automated fulfillment
centers to support a growing omnichannel grocery
business, designed to provide a seamless experience
whether customers shop in stores or digitally. Meanwhile,
Kroger is leveraging the vast stores of shopper
and transactional data across its physical and digital
properties to uncover insights that enable it to personalize
offers and products to customers. Alternative
profit streams, such as retail media, personal finance
and marketing data, are being cultivated as well to
help support investments in e-commerce, technology
and the core food retail business.
If the Albertsons transaction clears, Kroger said it
plans major investments in customers and employees,
including $1 billion to lower prices at the shelf,
$1.3 billion to enhance Albertsons Cos. stores, and
$1 billion to boost associate wages and benefits. CP
The Kroger Co. net earnings
(fiscal years ended in January)
in millions
2023
$2,164
2022
$2,244
2021
$1,655
Source: The Kroger Co.
The Kroger Co. net sales
(fiscal years ended in January)
in millions
2023
$150,039
2022
$148,258
2021
$137,888
Source: The Kroger Co.
The Kroger Co. share price
Sept. 4, 2024 = $53.36
$40
$45
$50
$55
$60
Sept. Nov.
2023
Jan.
2024
HIGH =
April 2, 2024 = $57.17
LOW =
Nov. 17, 2023 = $41.69
March May
Source: New York Stock Exchange
THE KROGER CO.
July
Sept.
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Corporate Profiles - 2024

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