My Family Owned an Independent Grocery, but I Support the Kroger-Albertsons Merger

Article originally posted on AZ Central on September 1, 2023

Growing up in rural Arizona showed me the importance of a thriving and competitive market for high-quality food.

We witnessed it firsthand as a family and as a third-generation community grocer in the small town of Coolidge.

The emergence of e-commerce and nontraditional competitors pushed traditional grocers, including our family, to reevaluate their strategies with giants such as Amazon and Walmart entering the market.

Some statewide elected officials in Arizona have shown their ignorance of these trends, considering their opposition to Kroger and Albertsons leveling the playing field.

It’s as if they are living in a world that existed perhaps two decades ago, before dollar stores, pharmacies and others began expanding their offerings of grocery items.

Walmart, Amazon have a huge advantage

The proposed merger reflects a growing trend within the sector, aligning with my personal experiences growing up in a family-owned independent grocery store.

The margins on food are incredibly small, averaging between 1% and 3%. That provides companies like Walmart and Amazon with a significant advantage over independently owned, family-owned and operated chains.

Walmart now owns a quarter of the food market. That only makes it more puzzling why some statewide elected officials have chosen to turn their backs on neighborhood grocers most known for their strong union jobs and community giving.

Mergers often allow for a strategic response to evolving consumer demands, promising improved services and greater economic vitality for our communities.

When Kroger recently merged with Safeway, the company invested $500 million to lower its prices and another $1.3 billion to improve their customers’ experience at their stores, according to written testimony Kroger CEO Rodney McMullen submitted to Congress in November.

On top of that, McMullen noted, Kroger committed to spend another $1 billion to continue raising its workers’ wages and providing an array of benefits, including health care, continuing education and financial literacy programs.

What Kroger does that the giants can’t

It should also be noted that Kroger uniquely supports independent, family-operated chains and co-ops by sharing their private-label manufacturing capacity, which leads to lower prices for items for consumers.

In my family’s experience, every independent grocer in Arizona has arrangements with one or more of their competitors to share warehouse space, for example. This support can appear in many other ways, benefiting consumers, workers and suppliers alike through the possibility of lower prices and improved wages.

By joining forces, a supermarket that can compete would protect independent businesses and strengthen local economies.

I’ve seen firsthand how my father’s store fostered connections within the community. Those opportunities benefit everyone from schools to food banks, youth football and Little League, underscoring the need to protect the existence of local grocers that are connected to their communities.

Their contributions support organizations like the Community Food Bank of Southern Arizona in expanding their food distribution services, allowing them to reach even more Arizonans. It also means ensuring that food pantries are well-stocked for those most in need.

Having witnessed the impact of a strong grocery store on creating community bonds, I understand the importance of maintaining access to affordable, nutritious products.

The benefits of a supermarket that can compete in such a competitive market would mean more products, lower prices and an enhanced shopping experience for consumers.

Fry’s merger allows it to compete

Critics of the merger fear potential price hikes, but the current competitive landscape, including wholesale clubs, dollar stores, other traditional grocery stores, pharmacies and online delivery services, would naturally temper prices.

In fact, when Kroger merged with Harris Teeter in 2014, the company CEO testified that it lowered its prices by $130 million per year.

I see this as an opportunity for our communities to adapt and progress while ensuring more choices for consumers.

I also see it as an opportunity for our statewide elected officials to realize that it’s not 2003 anymore and that there have been tremendous changes in the overall food purchasing marketplace.

A successful grocery store transcends commerce — it’s a pillar of a thriving community and I am proud that my family was able to provide that to Coolidge for approximately 70 years.

Regardless of one’s stance on the merger, we all share a commitment to preserving the essence of our neighborhoods.