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Kroger and Albertsons seek deal through FTC but employees say previous merger experience has them deeply concerned

Thousands of workers at two of America’s biggest supermarkets are warning of potential mass layoffs as the giant firms push for a merger.

Kroger, the second largest grocery chain in the US, and Albertsons, the fourth largest, are pushing for a merger through the Federal Trade Commission, which is reviewing the proposal.

Local unions representing over 100,000 Albertsons and Kroger workers strongly oppose the merger because of its likely impact on competition, prices for consumers, and job cuts that will result as scores of stores are divested.

During US Senate panel hearings, Kroger’s chief executive, Rodney McMullen, claimed no employees would be laid off, but said the company planned to place 100 to 350 stores into a spin-off company. Albertsons announced it would pay shareholders about $4bn in special dividends as part of the merger agreement, which would see Kroger spending $24.6bn to acquire Albertsons, with expectations to close the deal by early 2024 if approved by federal regulators.

“A win for our customers, a win for our associates, and a win for the communities,” McMullen has said in support of the merger. McMullen’s salary of $18m in total compensation is 679 times that of the median worker at Kroger.

But many grocery workers who witnessed the 2014 and 2015 merger between Albertsons and Safeway saw similar promises made and then broken by corporate executives.

Naomi Oligario worked at a Safeway store for 31 years in Port Orchard, Washington, when Albertsons acquired the company. Her store was divested and spun off under Haggen grocery stores. Employees were not allowed to transfer to a different store or they would lose their seniority and benefits that came with it. While working at the new Haggen, Oligario said prices significantly increased, driving out regular customers.

The store was shut down several months later, leaving Oligario and other workers to reapply to work at a different Safeway store or find other jobs.

“It was a fiasco, and heart-wrenching, because some people with more seniority than myself didn’t get their jobs back,” said Oligario. “It’s nerve-racking to think that we might have to go through that whole fiasco again.”

As a shop steward with United Food and Commercial Workers, Oligario said many of her co-workers were concerned by the proposed merger of Kroger and Albertsons.

“The Kroger and Albertsons CEOs, they’re there to make it sound good for them to make the merger go through. They’re not thinking about the workers, they’re not thinking about the consumers. They’re thinking about their pockets,” added Oligario.

A spokesperson for Kroger said: “We are committed to building on our track record of supporting associates by investing $1bn to continue raising associate wages and comprehensive benefits following the merger close.

“Kroger will not close any stores, distribution centers or manufacturing facilities as a result of this merger, including stores that may need to be divested to obtain regulatory approval.”

But many workers remain fearful.

Kyong Barry, a worker at Safeway in Auburn, Washington, for about 20 years and a UFCW board member, criticized the merger as a potential disaster for many workers, given many people’s prior experiences.

Barry said: “They lost their careers, their houses, their dignity. This is how the Albertsons and Safeway merger rewarded their workers who made them profitable, and with the Kroger merger it will happen again.”

Christine Martinez worked as a pharmacy technician at Pavilions, a Safeway subsidiary in Valencia, California, when Albertsons acquired Safeway in 2014.

“The company told us that the merger was going to be really beneficial to its employees. They really made it seem like it was really a win-win, when, in fact, it was not,” said Martinez. “It was really traumatizing, really stressful.”

Her store was one that was divested as a result of the merger and spun off into a Haggen. During the transition, Martinez said she and other workers often were paid late and the store was shut down several months later, leaving Martinez and her co-workers jobless.

She currently works as a pharmacy technician at a Ralph’s supermarket, a Kroger subsidiary, and is concerned the same issues are going to occur.

“I’m thinking, here we go again with this situation,” added Martinez. “People are going to lose their jobs, it’s going to happen all over again, and it’s not going to be good for employees. A lot of employees are really, really worried.”

This article was amended on 19 December 2022. The proposed merger would see Kroger spend $24.6bn to acquire Albertsons, not the other way around as an earlier version said.

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