Four local chapters of the United Food and Commercial Workers International representing some 100,000 workers are reportedly lobbying regulators and lawmakers to oppose the $25 billion merger between supermarket companies Kroger and Albertsons. Competitive Enterprise Institute antitrust experts Jessica Melugin and Ryan Young warn that stopping the merger puts jobs at risk in a very competitive grocery marketplace.
Statement by Jessica Melugin, Director of CEI’s Center for Technology & Innovation
“It’s understandable for grocery store employees to have concerns about their job security, but blocking a merger that might be the key to these companies continuing to compete with behemoths like Walmart and Amazon is short-sighted. If Kroger and Albertsons are stopped from combining resources and scaling up to remain competitive, all – not just some – of their employees may be looking for a new job.”
Statement by Ryan Young, CEI Senior Fellow
“In a rapidly changing market like groceries, it is not a good business strategy to try to keep things the same as they are. That’s why A&P, once the nation’s dominant grocery chain, went out of business. It didn’t adapt to customers wanting larger stores with more choices, and it didn’t keep up with new innovations in distribution. A&P was also one of the most heavily unionized grocery stores. Roughly 95 percent of its employees were members. Now every last one of those union jobs is gone, many to non-union stores like Walmart and Target.
“As today’s grocery industry evolves to various hybrids of online and in-person shopping, and as distribution models continue to change, today’s union members face a choice: Allow their union shop to try to succeed in a changing market, even at the cost of some store closures; or lose all of those jobs, likely once again to non-union stores. They can think short-term or long-term.”
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