TMJ Editorial
Locals Fear Closure of Woodland Park Safeway Store
Trevor Phipps
Ever since the potential $25 billion merger between grocery store giants Kroger and Albertsons was announced, people across the country cried foul, including many locals in Teller County.
Union members, government officials and consumers all came out saying that the merger would give Kroger too much control over the market.
Last week, the long-awaited and high stakes trial in Colorado began, resulting from an earlier lawsuit filed by Colorado Attorney General Phil Weiser to stop the merger. As the days in court continued, more details surrounding the company and possible outcomes of the merger have come out, some of which are quite troubling.
Locally, people were worried that the merger would mean that either City Market or Safeway in Woodland Park would be forced to shut its doors, causing a loss of jobs and options for consumers. In fact, as more and more states started filing lawsuits to stop the merger, the Woodland Park Safeway quickly emerged as one of the stores Kroger would sell off as a part of the merger deal in an attempt not to create a monopoly.
But selling off the stores could create other problems for local customers and employees. During the Safeway and Albertsons merger in 2014, many of their stores were sold off for similar reasons.
However, the company who bought the stores proved that they were not so skilled in managing a hefty portfolio of low-profit margin grocery stores. Many ended up shutting their doors anyways and others got sold back to Albertson’s.
Many working at the local Safeway store fear the same could happen if the merger goes through and the store is sold off to some East Coast company. Besides nobody wants to continue working hard at their job knowing that they are going to get sold off to another corporation, which is out of touch.
In fact, Attorney General Weiser has already come out and said that he is concerned about Kroger’s offer to sell off around 100 stores, many of which are in Colorado. He said that he fears that the C&S Wholesalers, which will purchase almost 100 Safeway stores in Colorado, is more of a distribution company, and that they might not be able to effectively manage the grocery store locations.
And if history tells us anything, a store like the one in Woodland Park in a rural mountain town could emerge as one of the initial retail casualties. Moreover, having one of two main grocery stores shutter would negatively affect any community of less than 10,000 people. What happens to the Safeway shopping center?
People would be without jobs and then the remaining grocery store would be able to control the employer market and offer qualified employees less money. The closure of one of Woodland Park’s grocery stores would also create a monopoly in the industry and give the remaining store the ability to charge just about whatever they wanted, knowing that not every shopper wants to deal with going to Walmart.
Fierce Arguments Emerge on Both Sides of the Trial
Lawyers for Kroger and C&S, however, have promised that the acquisition would be a positive move. The grocery giants contend that the merger would help them better compete with large retail corporations, such as Walmart, Costco and Amazon.
Their major argument has been that if the merger goes through, they will have the ability to lower prices and increase employee pay. During the trial, Kroger lawyers have been dangling a 10 percent price drop as a reason why government entities should let the merger go through, according to an article published by the Colorado Sun.
The Kroger legal team pointed out that currently Albertsons and Safeway stores have prices that are on average about 10 percent higher than King Soopers and City Market locations. If the acquisition goes through, Kroger and C&S have promised to lower prices by 10 percent at the newly acquired stores.
But attorney Arthur Biller with the Colorado Attorney General’s Office argues that actions speak louder than words, and that what Kroger and Albertsons have done in the past speaks to what will most likely will happen. The state’s lawyer pointed out that there was collusion between the two companies during a King Soopers’ workers strike in 2022 when Albertsons President agreed not to hire any of the rival’s workers who were on strike.
Biller also pointed out the possible impact on rural markets since Kroger owns eight stores in mountain towns like Eagle and Glenwood Springs that only compete with alternative-format grocery stores like Costco or Trader Joe’s.
“So, at each of these eight stores, Kroger decided to raise prices. What happened? Well, Kroger compared the performance at these no-comp stores to other of its Colorado stores that do face competition. What they found was sales went up, gross margins went up and they did not lose customers,” Biller said, according to the Colorado Sun. “In other words, Kroger as a monopolist of supermarkets in those areas profitably raised prices.”
Personally, I agree with the state’s effort to fight this merger even though I normally don’t like the idea of the government interfering with a free market. But I think that it is hard to believe anything the corporate mega chain’s executives say after it came out during the Federal Trade Commission (FTC) trial. During this case, Kroger admitted to price gouging shortly after the COVID-19 pandemic when they kept prices of certain items, such as eggs and milk high, even after their suppliers’ prices dropped in order to elevate profits.
