Local Union Supports Kroger-Albertsons Merger
Despite recent lawsuits aimed at blocking the proposed merger between The Kroger Co. and Albertsons Cos. and a bump in the timeline for the anticipated action, the deal got one notable thumbs-up this week. The United Food and Commercial Workers Union (UFCW) 555, a group representing grocery employees at Albertsons, Safeway and Fred Meyer stores in the Pacific Northwest, voiced its support for the move.
The union recently met with representatives of C&S Wholesale Grocers, LLC, which agreed last September to buy select stores, banners, distribution centers, offices and private label brands as part of the Kroger-Albertsons divesture plan. “We were pleased to find not only that they understood and liked the grocery business, but also recognized the importance of quality employees to their ongoing success. C&S has the opportunity to bring a long term strategy to a grocery industry focused on the short-term demands of shareholders and private equity investors. Employees of Kroger and C&S will be better off than employees of other potential buyers whose actions never seem to match the image they project publically,” said Dan Clay, UFCW Local 555 president. “In a refreshing change of pace, C&S seems poised to deliver a much needed fresh perspective for employees and customers alike.”
Other labor organizations have expressed concerns about the merger. In December, the International Brotherhood of Teamsters urged the Federal Trade Commission (FTC) to reject the agreement with C&S because of the potential loss of jobs. “Make no mistake — this deal is as anti-union as it gets if C&S ends up owning any part of Kroger or Albertsons,” Sean M. O’Brien, general president of the International Brotherhood of Teamsters said at the time.
The national UFCW organization continues to monitor the M&A activity. Following the announcement of the C&S agreement last fall, UFCW President Mark Perrone declared, “Any deal must be in their best interest, as it is our members – and all Kroger and Albertsons workers – who perform the invaluable job of helping feed and serve our nation every single day. These companies are successful because it is our members who make them a success, and no proposed merger or divestiture of stores should endanger or threaten the vital role they play.”
UFCW 555, with members in areas of Oregon, Washington, Idaho and Wyoming, maintains that its support of the merger ultimately supports grocery workers. “Grocery is a business of constant change, however for our members the important things won’t change: their working conditions will be maintained, their retirements secure, and their healthcare in place. C&S understands the grocery business and wants to bring its fresh perspective to the Pacific Northwest. The financial gurus and spreadsheet warriors running so many grocers often forget that customers want friendly service, locally sourced quality food, and consistent fair prices,” said Sandy Humphrey, secretary-treasurer of UFCW Local 555.
Ann Poff, the local union’s VP and a Safeway employee, also weighed in, noting that private equity firm Cerberus Capital Management, which bought into Albertsons years ago, will sell its stake if/when the deal is approved and finalized. “Forcing Cerberus to continue to own Albertsons isn’t an option. If they don’t sell to Kroger, it will be someone else. Our members would rather work for people who run grocery stores over online or big box retailers. This merger, combined with a significant divestiture to C&S, represents a good outcome for workers caught in the wake of a private equity company that wants to sell Albertsons,” Poff remarked.
Amid the volley of statements and legal actions, the retailers continue to affirm their commitment to shoppers. Kroger recently took full-page advertisements in the Washington Post and Denver Post, emphasizing, “There will be no front-line job losses as a result of the merger” and “There will be no store closures as a result of the merger.” In addition, the ads pointed out, Kroger is investing $1 billion to continue to raise associate wages and benefits.
Meanwhile, another report in Bloomberg News is stirring up speculation about the merger. On Feb. 20, Bloomberg published a story alleging that the FTC and “a group of states” are set to file a lawsuit before Feb. 28 to halt the merger between the two grocery chains. The article cited sources familiar with the matter; so far, there has been no official response from Kroger or Albertsons.
Nearly half a million associates of Cincinnati-based Kroger serve more than 11 million customers daily through a digital shopping experience and retail food stores under a variety of banner names. The company is No. 4 on The PG 100, Progressive Grocer’s 2023 list of the top food and consumables retailers in North America. Boise, Idaho based Albertsons operates 2,200-plus retail food and drug stores with 1,726 pharmacies, 401 associated fuel centers, 22 dedicated distribution centers and 19 manufacturing facilities. It's No. 9 on The PG 100. Keene, N.H.-based C&S services customers of all sizes, supplying more than 7,500 independent supermarkets, chain stores, military bases and institutions with 100,000-plus products, in addition to operating corporate stores. The company is No. 17 on The PG 100.
