SUBSCRIBE TO OUR FREE NEWSLETTER
Daily news & progressive opinion—funded by the people, not the corporations—delivered straight to your inbox.
5
#000000
#FFFFFF
5
#000000
#FFFFFF
grocery cartels
Progressive Senators Demand Answers From Kroger on 'Widespread Wage Theft'
"Even as your company was failing to address concerns about systemic wage theft, you have been pushing through a $24.6 billion merger with Albertsons Companies, Inc. that further threatens workers' wages and jobs."
Feb 16, 2023
A trio of progressive U.S. senators on Wednesday pressed the CEO of Kroger to answer longtime worker allegations of rampant wage theft, accusations that continue as the supermarket giant pursues a contentious megamerger with erstwhile competitor Albertsons.
"We are writing today regarding alarming new reports of Kroger's involvement in the mistreatment of workers and consumers through widespread and unresolved wage theft," Sens. Elizabeth Warren (D-Mass.), Bernie Sanders (I-Vt.), and Ron Wyden (D-Ore.) wrote in a letter to Kroger Company chairman and CEO Rodney McMullen. "These reports indicate that 'systemic and widespread errors' by Kroger resulted in thousands of your employees experiencing delays and missing wages in their paychecks in late 2022."
Warren explained on Twitter that "Kroger stiffed its own workers while pushing a merger deal with Albertsons that could harm both consumers and workers," and that the senators "are calling them out for lining their pockets at the expense of their employees."
Kroger workers say a big part of the problem is MyTime, a new payroll system rolled out last year that McMullen claimed would "simplify day-to-day work" but instead has resulted in problems including missing pay and incomplete checks.
"I'm tired of having to beg for pay that's due to me," one Kroger employee toldPopular Information last month.
\u201cKroger workers across the country are in a crisis due to widespread wage theft - some have gone weeks without pay! Our union alone has received over 1,000 reports of wage theft as a result of Kroger's new payroll system.\n\nThank you @SenSanders & @SenWarren https://t.co/Jnkl38118e\u2026\u201d— UFCW Local 400 (@UFCW Local 400) 1676559443
In January, hundreds of Kroger employees, most of them members of the United Food & Commercial Workers (UFCW) Local 400 Union, filed a class-action lawsuit alleging widespread wage theft.
The senators' letter states that "given your company's record of anti-worker policies, and your ongoing attempt to push through a merger that would harm both consumers and workers, we are writing to request a full explanation of how your workers will be compensated for any lost or delayed wages, and how you will prevent future wage theft."
The lawmakers asked McMullen to answer questions including:
- How many missing or incorrect paychecks were reported to the company in 2022, and how many of these reports were related to the MyTime system?
- What was the total amount of wages owed to workers that Kroger failed to pay in 2022?
- How much back pay has Kroger issued to date for missing or incorrect paychecks in 2022?
- Is Kroger continuing to use the MyTime payroll system, despite significant accuracy issues, and if so, what steps has the company put in place to prevent further wage theft?
- Have any company executives had pay, bonuses, or other compensation withheld or clawed back as a result of the systemic problems affecting workers' pay in 2022?
- Will you commit to fully redressing all workers affected by missing or late pay prior to taking any additional steps to move forward with the Albertsons merger?
Warren, Sanders, and Wyden are among the many progressive and labor voices urging the federal government to reject Kroger's proposed merger with Albertsons. Together, the two supermarkets and their subsidiaries employ more than 710,000 workers at around 5,000 stores in 48 states and Washington, D.C. and rake in $208 billion in annual revenue, second only to Walmart.
In a bid to fend off antitrust challenges to the proposed merger, Kroger and Albertsons announced earlier this week that they would sell off as many as 300 stores, mostly in areas where the two chains overlap, GlobeStreported.
"Even as your company was failing to address concerns about systemic wage theft, you have been pushing through a $24.6 billion merger with Albertsons Companies, Inc. that further threatens workers' wages and jobs and hurts consumers by reducing competition among grocers," the lawmakers' letter asserts. "This merger would exacerbate corporate consolidation in the grocery sector, and likely result in the shuttering of some stores across the country and the firing of workers from both Kroger and Albertsons."
A Kroger spokesperson told Common Dreams via email that"while the majority of issues have been resolved, we understand these issues have caused undue difficulty for the impacted associates," and that"we are taking multiple steps to pay our associates as quickly as possible, including overnighting checks to impacted associates."
According to the left-leaning Economic Policy Institute, more than $3 billion in stolen wages were recovered for U.S. workers between 2017 and 2020—a fraction of the $50 billion EPI says is stolen by employers each year. By contrast, the FBI said the total value of all 267,988 reported U.S. robberies in 2019 was around $482 million.
The lawmakers' letter came as Communications Workers of America and the National Employment Law Project published a study in which 9 in 10 surveyed workers at independent authorized retailers of telecom titans AT&T, T-Mobile, and Verizon in 43 states said they've experienced wage theft.
Keep ReadingShow Less
Sanders Says Biden Admin 'Must Reject' Merger of Kroger and Albertsons
"At a time when food prices are soaring as a result of corporate greed, it would be an absolute disaster to allow Kroger... to merge with Albertsons," said the Vermont progressive.
Oct 14, 2022
Sen. Bernie Sanders is among those calling on the Biden administration to block the proposed merger between erstwhile rival grocery giants Kroger and Albertsons, which was formally announced Friday morning.
"At a time when food prices are soaring as a result of corporate greed, it would be an absolute disaster to allow Kroger, the second-largest grocery store in America, to merge with Albertsons, the fourth-largest grocery store in America," Sanders (I-Vt.) tweeted Thursday night, before an agreement had been reached. "The Biden administration must reject this deal."
"Rejecting this merger proposal should be a no-brainer for federal antitrust officials."
Under the terms of the merger, Kroger agreed to buy Albertsons for a grand total of $24.6 billion. The price tag includes the purchase of Albertsons stock at $34.10 per share and the assumption of approximately $4.7 billion of the company's debt. As part of the transaction, Albertsons will pay its shareholders a special cash dividend of up to $4 billion next month.
Cincinnati-based Kroger trails only Walmart in grocery market share, while Boise-based Albertsons is behind Costco. As a result of Friday's acquisition, the new conglomerate is expected to control nearly 16% of the market--closing the gap on Walmart, which commands 21% of the market--and be valued at almost $50 billion.
Together, Kroger and Albertsons, including their numerous subsidiaries, employ more than 710,000 workers at roughly 5,000 stores across 48 states plus Washington, D.C. and bring in $208 billion in annual revenue, just behind Walmart's $218 billion.
Sanders is far from alone in urging the Federal Trade Commission (FTC) to nix the deal, with progressives arguing that it would hurt workers and force consumers to put up with even more corporate price gouging, which has escalated following years of supermarket consolidation.
"The federal government's own analysis finds that supermarket consolidation typically leads to price hikes," Mitch Jones, managing director of policy at Food & Water Watch, said Thursday. "For the sake of everyday consumers, farmers, and food workers, the Biden administration should be rejecting this terrible, greed-driven proposal out of hand."
Although consolidation in the grocery sector has, according to the American Economic Liberties Project (AELP), "previously been mismanaged by antitrust enforcers," regulatory approval of Kroger's buyout of Albertsons--the largest supermarket deal since Supervalu, CVS Corp., and a group of investment firms bought Albertsons for $9.7 billion in 2006--is far from guaranteed.
Federal officials, including FTC Chair Lina Khan and Jonathan Kanter, assistant attorney general of the U.S. Department of Justice's Antitrust Division, have both taken a more hard-nosed approach to mergers following decades of lax enforcement.
"The actual practicality of achieving regulatory approval by the FTC could be difficult," according to Jennifer Bartashus, an analyst at Bloomberg Intelligence. "If you think about the store bases of the two respective entities, there is a lot of overlap in very competitive markets."
AELP executive director Sarah Miller said Thursday that "there is no reason to allow two of the biggest supermarket chains in the country to merge--especially with food prices already soaring."
Consumer Price Index data released Thursday morning showed that food prices continued to climb last month. Over the past year, the price of eggs, chicken, milk, and bread has increased by 30.5%, 17.2%, 15.2%, and 14.7%, respectively.
Progressive economists have attributed above-average price increases for certain products to decades of consolidation. Allowing a handful of corporations to control a greater share of the market, they argue, enables executives to hike prices and inflate profits.
"With food prices rising, the last thing Americans need is a supermarket merger that will spike food prices even further," Public Citizen president Robert Weissman said Friday. "Rejecting this merger proposal should be a no-brainer for federal antitrust officials."
Keep ReadingShow Less
As Kroger Eyes Albertsons, Biden Admin Urged to Reject 'Greed-Driven' Grocery Buyout
"There is no reason to allow two of the biggest supermarket chains in the country to merge—especially with food prices already soaring," said one policy analyst.
Oct 13, 2022
Warning that a potential merger between Kroger and Albertsons--two of the nation's largest grocery chains--would hurt workers and force consumers to endure even more corporate price gouging, which has intensified following years of supermarket consolidation, progressives on Thursday implored the Biden administration to nix the deal if finalized.
"This merger is a cut and dry case of monopoly power, and enforcers should block it."
"At a moment when American families are already struggling with skyrocketing food prices from a hyper-consolidated grocery industry, the notion of another megamerger between corporate food giants couldn't be more alarming," Mitch Jones, managing director of policy at Food & Water Watch, said in a statement.
"The federal government's own analysis finds that supermarket consolidation typically leads to price hikes," said Jones. "For the sake of everyday consumers, farmers, and food workers, the Biden administration should be rejecting this terrible, greed-driven proposal out of hand."
According toCNBC, Kroger's acquisition of Albertsons could be announced as soon as Friday morning. If an agreement between the rivals is reached, the resulting grocery conglomerate would enjoy a market share of nearly 16% and a market cap approaching $50 billion.
Cincinnati-based Kroger, the nation's second-biggest grocery store behind Walmart, controls 9.9% of the market and is valued at $32.5 billion. Boise-based Albertsons, the fourth-largest grocer with a 5.7% market share, is worth $15.2 billion. Kroger and its subsidiaries employ around 420,000 workers in almost 2,800 stores across 35 states. Albertsons and its banners employ approximately 290,000 workers at more than 2,200 stores in 34 states plus Washington, D.C.
Kroger has made an all-cash offer to buy its smaller competitor. But as Bloomberg, which first reported that the two companies were in merger talks, pointed out: "The exact structure and price of the deal couldn't immediately be learned. Any potential transaction, if agreed, may face antitrust scrutiny and require asset sales."
The news outlet continued:
The potential deal would be among the largest U.S. retail transactions in years, and the biggest U.S. supermarket deal since the last time Albertsons changed hands in 2006, when it was was bought by Supervalu, CVS Health Corp., and a group of investment firms for about $9.8 billion, according to data compiled by Bloomberg.
These talks come amid a dramatically different deal-making landscape. Soaring food prices are a key driver behind inflation in the U.S., while industry consolidation has given top players in the space much greater market share. That could present a number of political and regulatory hurdles for this kind of tie-up, as politicians blame corporate greed for higher prices, while antitrust officials eye tougher merger rules.
"The actual practicality of achieving regulatory approval by the FTC [Federal Trade Commission] could be difficult," said Jennifer Bartashus, an analyst at Bloomberg Intelligence. "If you think about the store bases of the two respective entities, there is a lot of overlap in very competitive markets."
Sarah Miller, executive director of the American Economic Liberties Project (AELP), said in a statement that "there is no reason to allow two of the biggest supermarket chains in the country to merge--especially with food prices already soaring."
Consumer Price Index data released Thursday morning showed that food prices are still surging. Over the past year, the price of eggs, chicken, and bread has increased by 30.5%, 17.2%, and 14.7%, respectively, with similar spikes for other staples.
\u201cAnnual inflation via BLS just out:\n\n42.9% airline fares\n33.1% utility gas\n30.5% eggs\n18.2% gasoline\n17.2% chicken\n15.7% coffee\n15.2% milk\n14.7% bread\n10.1% furniture\n9.2% vegetables\n8.2% all items\n8.2% fruit\n8.1% ham\n7.6% women apparel\n7.2% used cars\n6.7% rent\n3.7% men apparel\u201d— Ryan Struyk (@Ryan Struyk) 1665665021
Progressive economists have attributed above-average price increases for certain products to decades of consolidation, which has given a handful of corporations an ever-greater degree of market control and with it, the power to hike prices and inflate profits.
Last year, Food & Water Watch published a report--The Economic Cost of Food Monopolies: The Grocery Cartels--examining how workers and consumers nationwide are harmed by a worsening consolidation crisis.
Researchers found that between 1993 and 2019, the number of grocery stores in the U.S. decreased by roughly 30% while the combined market share of the country's four largest food retailers tripled to 69%.
Meanwhile, as grocers with their own vertically integrated supply chains increasingly dominate the market, the food industry is becoming more highly concentrated, with a growing number of monopolies and oligopolies.
According to AELP:
Consolidation in the grocery sector has long been an issue--one that has previously been mismanaged by antitrust enforcers. In 2015, Albertsons sought to acquire competitor Safeway for $9.4 billion. Of the more than 2,400 grocery stores that Albertsons and Safeway owned in total, the FTC required the sale of 168 of them located in eight Western states. That divesture was a disaster. Within a year, Albertsons had bought back 33 of the stores for about one-fifth of what it had sold them for, and communities across these states ultimately ended up with a monopoly.
"With 60% of grocery sales concentrated among just five national chains, a Kroger-Albertsons deal would squeeze consumers already struggling to afford food, crush workers fighting for fair wages, and destroy independent, community stores," said Miller. "This merger is a cut and dry case of monopoly power, and enforcers should block it."
Keep ReadingShow Less
Most Popular