Five Los Angeles City Council members introduced a resolution Friday intended to formalize the city’s position against a proposed mega-merger of grocery giants, which would impact 579 stores, including 63 locations in California.
During a news conference Friday morning, Councilwoman Traci Park led her colleagues — Heather Hutt, Tim McOsker, John Lee and Hugo Soto-Martinez, co-authors of the resolution — in sending a clear message to the city’s federal partners that L.A. is “unequivocally opposed” to the merger between Albertsons and Kroger. They say the proposed merger is anti-competitive, would lead to higher prices and would undermine workers and communities across L.A.
“Our grocery stores are community anchors, serving countless families, seniors and residents — while also providing pathways into middle class jobs with good union wages and benefits,” Park said.
The merger is still in the process of being completed — and it faces some challenges.
Earlier this year, Kroger CEO sent a memo to employees at all of the affected stores notifying them of the plans to spin off the locations to C&S Wholesale Grocers if the merger goes through. All employees are expected to be able to maintain their employment with C&S, officials have said.
The merger is being challenged by the Federal Trade Commission, which claims the proposed $24.6 billion merger would lead to higher grocery prices through a reduction in marketplace competition — and also potentially negatively affect workers.
Kroger has denied such claims, insisting that no stores, distribution centers or manufacturing facilities would be closed, and claiming that “customers will benefit from lower prices and more choices” through the merger.
Park and her colleagues refuted the company’s position.
“Worse, if the merger does succeed, we don’t know what will happen to the 14 stores across Los Angeles that are slated to be sold to the C&S Wholesale Grocers,” Park said, “a chain which has no history of operating supermarkets in Los Angeles.”
The councilwoman has concerns that these stores located in the city may be sold, closed, terminate union labor or that the underlying real estate will be sold for future development.
Of the 14 stores that might be sold from this merger in the city, three are located in Park’s 11th District, covering West L.A. and coastal neighborhoods in Westchester, Venice and Pacific Palisades.
Councilwoman Hutt echoed Park’s comments, adding that in her 10th District, covering Central L.A. and neighborhoods such as Koreatown, there’s an Albertsons located on Crenshaw Boulevard and West Martin Luther King Jr. Boulevard that she’s concerned about.
“I remember when it opened. It was such a big deal to have a beautiful grocery store right in our own community,” Hutt said. “Hundreds of people use that daily to feed themselves and their family.”
“The rising prices of groceries is hard on all of us. However, as a city, we must work to protect our vulnerable. When two of the largest grocery chains in the country combine their power, our community members suffer,” she added.
Monique Hightower, an Albertsons clerk and member of the United Food and Commercial Workers Local 770 Union, which represents grocery workers, joined the city leaders to highlight the challenges supermarket employees face.
“Grocery store workers are really struggling to make ends meet, and my biggest concern today is that the proposed Kroger-Albertsons mega-merger … will make things worse,” Hightower said.
She emphasized that the merger is “far from a done deal” as it faces challenges in court filed by state and federal regulators.
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Park said that the city of Los Angeles has a “pretty large platform and a pretty large voice.” With so many stores here in Southern California on the chopping block, more than five dozen, Park believes that when everybody comes together, they will have a lot of opportunity to impact the proposed merger.
“We will continue this conversation with our federal partners and I look forward to the courts’ intervention in the numerous litigation pieces that have been filed by at least 11 attorneys general here in the United States,” Park said.
The resolution will be considered by the council’s Rules, Elections and Intergovernmental Relations Committee at a future date before a final vote by the full council.
