Kroger, Albertsons merger would worsen pain of high food prices for Illinoisans

As mega-firms that own our country’s leading supermarket chains grow bigger, working families in Illinois are facing rising costs in the grocery aisles and dwindling options for healthy food. This is no coincidence.

Illinois families should be able to go to the grocery store and purchase reasonably priced, healthy food for their families. But in recent years food prices have far outpaced inflation, leaving families paying 25% more for groceries now than before the pandemic, even as major chains continue to report record profits.

White bread, a staple of the American diet, rose 22% from the start of 2022 to the beginning of 2023. During that same year, Kroger netted over $4 billion in profit, a nearly 19% increase from the prior year. How could this be possible when consumer prices were up by just 9%?

Well, just listen to Kroger CEO Rodney McMullen, who said the quiet part out loud. On an earnings call with analysts in June, McMullen said "a little bit of inflation is always good in our business," CNN reported.

McMullen went as far as suggesting that inflation gives them cover to gouge consumers, noting that shoppers “don’t overly react to that.”

The COVID-19 pandemic catalyzed an era of high grocery costs and store consolidation. Supply chain disruptions during the pandemic disproportionately hurt small grocers and allowed unchecked price hikes from the biggest chains, which continue to consolidate into bigger conglomerates.

Bad deal for customers, workers

The latest iteration of this trend is the proposed multi-billion-dollar merger between Kroger and Albertsons. If federal anti-trust regulators allow their plan to proceed, it would be the largest supermarket merger in U.S. history. A merger that makes the biggest grocery interests even bigger is a deal bad for workers, bad for competition and even worse for the millions of Illinoisans who desperately need relief from persistently high food costs.

In 2019, just four companies controlled more than two-thirds of all grocery sales in the United States. Even before the pandemic, this grocery oligopoly had a hold on consumers and prices began to creep up, only for them to soar during the pandemic.

Throughout the pandemic, essential grocery workers labored bravely and tirelessly to ensure Americans had access to food and other vital goods with as little disruption as possible. Not only do workers face difficult conditions, but now the stores themselves face an uncertain future. Kroger and Albertsons released plans recently to sell more than 500 store locations — 35 of which are located in Illinois.

Because of myriad supermarket sector consolidations, grocery store conglomerates are increasingly competing against their own brands while growing their own overall share of the market. Kroger and Albertsons each own 28 and 20 banners, respectively. Stores we love, like Jewel-Osco and Safeway, are owned by the same holding company, Albertsons. Because of this, consumers are often choosing between grocery stores owned by the same parent company as the subsidiary brands appear to compete through varying names and unique branding. Using these tactics, grocery giants will always win, and customers and workers will always lose.

Families in Illinois and across the country are feeling the squeeze of these high prices. Food insecurity increased for the third straight year and food pantries are seeing a significant rise in use throughout the Chicago area.

The Greater Chicago Food Depository, a critical resource that many Illinois families use to make ends meet, has seen first-hand the impact of high food prices caused in part by grocery consolidation. One of their patrons, even with her full-time job, struggles to afford school fees, gas, rent and food, noting, “Sometimes all we have for a meal is peanut butter and bread, and the kids are like, 'Again?’ " Without the pantry, this patron could not afford to cook healthy, nutritious and practical meals.

Rep. Krishnamoorthi’s family, like many across the nation, relied on the food stamp program (now known as SNAP) when he was growing up, and the safety net gave his parents breathing room as they went to school and worked toward better paying jobs. This is no longer possible for many families, as food prices at major chains continue to rise faster than wages, and food assistance programs cannot stretch to feed a family for the entire month.

As we look toward increasing access to good-paying jobs and quality nutrition, monopolies are not going to be part of the solution. Working families and the workers that these companies rely on must not be pushed into a corner and left without options.

U.S. Rep. Raja Krishnamoorthi, D-Illinois, represents the state's 8th Congressional District. Steve Powell is president of United Food and Commercial Workers Union Local 881.

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