Business
Column: Good riddance to the merger of grocers Albertsons and Kroger, which would have cost you money
The inside stories of messy marriage breakups have been an entertainment staple since even before Tolstoy observed that “every unhappy family is unhappy in its own way.” So let’s thank the supermarket giants Kroger and Albertsons, whose $24.6-billion merger has collapsed amid mutual recriminations, for their outstanding contribution to the genre.
The proximate cause of the breakup was the granting of a preliminary injunction against the deal by U.S. Judge Adrienne Nelson of Oregon. Nelson’s ruling, issued Tuesday, was a response to a motion by the Federal Trade Commission, the District of Columbia and eight states including California. (A state judge in Washington also ruled against the merger the same day.)
Although the two companies had fought the challenges to the merger seemingly hand in hand, their accord dissolved within 24 hours of Nelson’s ruling. Boise, Idaho-based Albertsons sued Kroger on Wednesday, citing the latter’s alleged “failure to exercise ‘best efforts’ and to take ‘any and all actions’ to secure regulatory approval” of the deal.
The overarching goals of antitrust law are not met by permitting an otherwise unlawful merger in order to permit firms to compete with an industry giant.
— Federal Judge Adrienne Nelson, blocking the Kroger/Albertsons merger
Kroger called Albertsons’ claims “baseless” and cited its would-be spouse’s “repeated intentional material breaches and interference throughout the merger process, which we will prove in court.”
Those of us who have followed the deal from its inception in 2022 can add this: “Good riddance.”
The collapse of the supermarket merger may stand as the final antitrust success of the Biden-era FTC, which has taken a hard line toward industry consolidations under Chair Lina Khan. Donald Trump is planning to nominate Andrew Ferguson, an FTC commissioner and conservative lawyer, as the agency’s chairman. Khan will be stepping down.
The two grocery chains maintained that they needed to merge in order to successfully compete with megastore chains such as Walmart and Costco, which have grown their grocery operations to the point that their sales approach those of Albertsons and Kroger or even exceed them.
The truth is, however, that the squalid nature of this transaction was always self-evident. As I wrote after the original announcement, the merger partners pitched it to the public as a boon to consumers. Merger partners always say this, but the consumer savings and service improvements generally prove elusive.
“We will take the learnings from each company to bring greater value and a better experience to more customers, more associates and more communities,” Kroger Chief Executive Rodney McMullen said then.
McMullen didn’t explicitly say that the deal would mean lower prices, but it would be a rare shopper who didn’t think that “greater value and a better experience” meant anything other than paying less at the checkout counter. Economists and antitrust experts predicted that the creation of a monopolistic supermarket giant would almost surely add inflationary pressure to food prices.
At the heart of the merger, as I further reported, was a $4-billion dividend to be paid to Albertsons stockholders. Six of the largest stockholders were corporate insiders, defined as holders of more than 5% of Albertsons shares each.
The biggest shareholder was the private equity firm Cerberus Capital Management, which owns more than 26% of the shares and has four nominees on the company’s board of directors. The other five are investment and real estate funds that hold a total of an additional three board seats.
The six investors control about 75% of Albertsons shares. In other words, they voted themselves a multibillion-dollar handout.
Albertsons had claimed that the dividend wasn’t connected to the merger but was “part of Albertsons’ long-term strategy for growth,” which was “determined well before Albertsons’ discussions with Kroger began.”
Yet the companies’ own merger announcement had stated explicitly that the $4-billion dividend was “part of the transaction.” They counted the dividend as part of the merger price, accounting for $6.85 per share of the $34.10 per share payable to Albertsons shareholders. The dividend was approved by the Albertsons board at the very same meeting at which it approved the merger deal itself.
It should go without saying that funneling $4 billion to insiders off the top wasn’t going to make it any easier to bring consumers lower prices at the checkout counter.
Then there was the issue of Albertsons’ corporate conduct. In October, Albertsons reached a $3.9-million settlement with the attorneys general of Los Angeles County and six other California counties as well as the FTC over accusations that the chain ripped off customers at hundreds of its Vons, Safeway and Albertsons stores in California. The company didn’t admit to liability in settling the case, but the terms of the final judgment suggest that the counties and the FTC had the goods — or at least had enough evidence that Albertsons thought it wise to make the case go away.
Albertsons says it has now implemented policies and employee training to ensure that its prices are accurate.
The principal issues raised by the FTC and the states concerned the prospects that the merger of America’s two biggest supermarket chains would allow them to dominate their markets as a monopoly or near-monopoly. That pointed to higher prices for customers and lower wages for workers, which are legitimate concerns for antitrust regulators.
Kroger, the largest chain, operates about 2,700 stores in 35 states and the District of Columbia, under brand names including Ralphs. Albertsons’ footprint encompasses about 2,300 stores under names such as Vons, Pavilions and Safeway. As Judge Nelson observed, the two chains have assiduously competed with each other for years, tracking each other’s prices in an effort to seize market share.
To meet the FTC’s objections, the merger partners proposed selling 579 stores to C&S Wholesale Grocers, a privately held supermarket supplier headquartered in New Hampshire that is a tiny fraction of the merger partners’ size — among other metrics, it has about 14,000 employees, compared with 430,000 employees at Kroger and 285,000 at Albertsons. The sale price was to be $2.9 billion.
Such divestitures are common features of merger deals that face regulatory challenge. But they don’t always meet their goal of preserving competition. A good example is the outcome of a divestiture scheme the FTC ordered in 2014, to mitigate the anticompetitive effects of Albertsons’ takeover of Safeway.
The FTC ordered the divestiture of 168 stores. More than 140 were acquired by Haggen Holdings, an 18-store chain in the Pacific Northwest. As it happened, Haggen was utterly ill-equipped to grow nearly tenfold overnight. Within months it was laying off workers, and before the year was out it had filed for bankruptcy.
Haggen put 100 of the stores back on the block, and 54 of them were reacquired by Albertsons as part of a deal to purchase Haggen outright. Even with the repurchases, the merger resulted in the elimination all competition in some communities.
That history gave Nelson pause when she assessed the new divestiture plan. C&S, she noted, didn’t have very happy experiences when it “dipped its toes into the grocery retail industry before.” The wholesaler bought 220 retail stores between 2001 and 2003, but had sold 190 of them by 2005. The company operates about 25 retail stores under the Piggly Wiggly and Grand Union brands; unlike Kroger and Albertsons, which incorporate pharmacies and gasoline stations into many of their locations, C&S operates only one pharmacy and no gas stations.
In short, Nelson observed, “there are serious concerns about C&S’ ability to run a large-scale retail grocery business that can successfully compete” with a merged Albertsons/Kroger. Among other issues, she wrote, C&S would have to re-brand about half the stores, a process that is “effectively the same as opening a new, unfamiliar grocery store in the eyes of consumers.” C&S didn’t respond to my request for a comment on Nelson’s take, though a spokeswoman told me by email that the firm is still committed to a “transformation strategy, which includes expansion into retail.”
As for the merger partners’ assertion that their deal was a defensive move against competitors such as Walmart and Costco, Nelson was unmoved. “The overarching goals of antitrust law are not met,” she wrote, “by permitting an otherwise unlawful merger in order to permit firms to compete with an industry giant.”
With the merger dead, the squabbling between the former partners is just beginning. Under their original deal, Albertsons is entitled to a $600-million breakup fee. But it says it will be seeking billions of dollars in costs, due in part to “the extended period of unnecessary limbo Albertsons endured as a result of Kroger’s actions.” Among other things, Albertsons’ asserted that Kroger dithered on divestiture deals that might have met the FTC’s objections.
In response, Kroger said it “went to extraordinary lengths to uphold the merger agreement throughout the entirety of the regulatory process and the facts will make that abundantly clear.”
Walmart is rapidly expanding its network of electric vehicle chargers designed for customers to use while they shop.
The network could help fill gaps in EV infrastructure in states with greater need for chargers. Walmart, which has more than 5,000 locations in the U.S. and hundreds in California, says more than 90% of Americans live within 10 miles of one of its stores.
The chargers also offer an incentive for customers to choose Walmart — Walmart Plus members will receive a 10% discount off an average price of $0.46 per kilowatt-hour of energy at the company’s chargers.
Walmart chargers are already available at more than 75 locations in 17 states, with Texas boasting the most charging stations, followed by Florida and Arizona.
Matthew Nelson, Walmart’s director of energy policy, said last week on LinkedIn that the network will soon reach 29 states, including California.
“We are delivering on the promise of affordable, reliable and convenient charging,” Nelson said in his post.
According to Walmart’s website, six charging stations are coming to California soon, though the company did not offer a specific timeline.
The chargers will be installed at stores in Antelope, Brea, Fresno, Stockton, Suisun City and Vallejo.
Most charging sites in California will include eight to 16 fast-charging stalls, said Walmart spokesperson Kelsey Bohl.
The company first announced plans in April 2023 to install its own EV chargers at Walmart and Sam’s Club stores, with a goal of installing thousands of chargers by 2030. Partnering with ABB E-Mobility and Alpitronic, it added 25 new charging sites this past May and six more in June.
“Walmart is building a leading retail-integrated EV fast-charging network, focused on delivering an affordable, reliable and convenient charging experience where customers already shop,” Bohl said in an emailed statement. “Customers can charge while they shop, access stations through the Walmart app they already use, and benefit from affordable pricing.”
The charging stations already available include 612 individual charging stalls using 400-kilowatt chargers. Each stall has a dual charging cord with both Combined Charging System and North American Charging Standard connectors. The standard connectors, designed by Tesla, are smaller and lighter than the combined systems.
The primary way to pay for the chargers is through the Walmart app, but the company is also experimenting with built-in credit card readers to allow those without the app to use the stations.
Customers can check charger availability on the Walmart app. The company said the chargers will be available 24 hours a day.
Robotaxis could be turning into robocops.
A self-driving Waymo reported two teens to San Mateo, Calif., police on Monday after they were found drinking alcohol and shooting toy guns in the back of the vehicle.
According to a social media post from the San Mateo Police Department, officers detained two 15-year-olds after the Waymo they were riding in contacted the department and stopped in a parking lot until law enforcement arrived.
“Parents do you know where your teens are?” the San Mateo Police Department wrote on Facebook following the incident. “Waymo does!”
Officers removed both teens from the vehicle and determined they were using toy guns to shoot Orbeez out the windows. Orbeez are small, water-absorbing beads sold at toy stores.
“Toy guns, water guns, and BB guns all pose real dangers, especially to an untrained eye,” the Police Department said. “The simple handling of them can cause fear in [passersby].” “
A video posted on Facebook shows at least five officers and a police dog responding to the scene and approaching the Waymo with their weapons raised.
Waymo did not immediately respond to a request for comment.
Waymo vehicles have internal cameras and microphones that may be used in an emergency or to “promote safety and security,” according to Waymo’s online support page.
The cameras are also used to ensure the vehicles are clean and to help find lost items, according to the support page.
The company said it does not use facial recognition or other biometric identification technologies to identify individuals.
“In more urgent circumstances, support may access live video during a trip,” the Waymo page said.
The San Mateo Police Department’s Facebook post has garnered nearly 60 comments, with one user accusing Waymo of “snitching.”
“At least they got a designated driver?!” one user commented.
Business
Commentary: How right-wing anti-transgender attacks led to a Supreme Court ruling upholding sex discrimination
At the Supreme Court, the unfounded fear of boys masquerading as girls in youth sports rolled the clock back on gender equality.
On the surface, the Supreme Court’s June 30 opinion upholding state laws barring transgender girls from women’s and girl’s sports teams looks like a victory for women’s rights.
The 6-3 opinion by Justice Brett M. Kavanaugh certainly presents itself that way. “Females and males have inherent physical differences relevant to athletic performance,” Kavanaugh wrote. “Therefore, in contact sports, forcing female athletes to compete against males can create significant safety risks.” He also asserted that “forcing female athletes to compete against males can undermine competitive fairness.”
The ruling applied to prohibitions enacted in Idaho and West Virginia against “biological” males’ participation on women’s teams in public schools. Federal judges in both states overturned the bans. The Supreme Court majority restored them. The ruling essentially upholds similar bans enacted in 25 other states.
There was no record of any transgender person participating in school sports in the State, let alone any ‘problem’ with transgender students … creating unfair competition or unsafe conditions.
— Justice Sonia Sotomayor, demolishing the Supreme Court’s argument in favor of banning transgender girls from girl’s sports
Kavanaugh, like Donald Trump and others in the anti-transgender camp, maintained that one’s gender is an immutable fact of life, established even before birth.
Anything else, Trump stated in an executive order he issued on inauguration day 2025, could only be the product of “gender ideology extremism.” The U.S., his order stated, recognizes “two sexes, male and female. These sexes are not changeable and are grounded in fundamental and incontrovertible reality.” That’s a “biological truth,” he declared.
In his own version of this overconfident and factually insupportable conclusion, Kavanaugh wrote: “As all agree, females and males have inherent physical differences relevant to athletic performance.”
Science recognizes that some people are “born with sex traits that don’t fit into typical male or female patterns,” to cite a discussion on the Cleveland Clinic web page on the topic “intersex.” The condition “may involve chromosomes, hormones, reproductive organs or genitals.”
From a psychological standpoint, medical science recognizes “gender dysphoria” as a real condition often requiring counseling and medical intervention such as the use of puberty blockers and hormones to stave off the development of secondary sex characteristics until the condition can be resolved.
No one disputes that there are physical differences between the sexes. Few would dispute that on average or even at the median, males may be bigger and more powerful than females, or that in certain contact sports the difference may be telling and on occasion dangerous.
But that’s not the same as asserting that the physical differences between males and females invariably mean that men will invariably prevail over women in all competitions or that their participation will endanger women.
The International Olympic Committee — in a policy statement Kavanaugh cited incompletely — says that in “most running and swimming events,” males have a 10% to 12% advantage over women. That’s a range that would accommodate the full spectrum of outcomes — transgender females win, cisfemales win, they tie. (The “cis” prefix denotes those living consistent with their birth gender.)
West Virginia and Idaho addressed this ambiguity by banning transgender women from all girls’ teams. So under their rules transgender girls can’t play football or soccer with cisgirls. But what’s the argument in favor of banning them from the 100-yard dash, or cross-country track, or diving, or archery?
But something else is going on here. The Supreme Court’s ruling was almost preordained, given the years-long campaign by conservatives to demonize transgender individuals as if they’re members of an alien species.
It will be recalled that during his presidential campaign, Trump spun a despicable fantasy in which children were kidnapped in school and secretly subjected to sex-change operations.
Trump’s executive order wiped out policies aimed at protecting transgender adults from discrimination. He moved to outlaw gender-affirming medical therapies for anyone under 19 by cutting off federal funding for healthcare institutions that provide such care.
He banned transgender individuals from serving in the military and ordered federal prison officials to move transgender inmates into the general populations consistent with their birth genders, which exposes them to physical assault. (Federal Judge Royce Lamberth of Washington, D.C., has blocked the government from transferring three transgender women into the male prison population or terminating their hormone treatments.)
I wrote during Trump’s first term, when his anti-transgender policies were still gestating, that the goal was to show that “one can target any community, as long as it doesn’t have a strong political voice or political power. These are the actions of bullies and cowards, pretending to be strong.”
Last year, the Supreme Court struck its first blow against transgender rights by upholding a Tennessee law banning transgender care, including puberty blockers and hormone therapy, for minors. Similar laws have been enacted in 25 other states. The majority in that ruling by Chief Justice John G. Roberts Jr. was identical to the one in the June 30 ruling — Roberts, Kavanaugh, and Justices Clarence Thomas, Samuel A. Alito Jr., Neil M. Gorsuch and Amy Coney Barrett.
Who are the targets of this ideological campaign? They number only about 1.6 million U.S. adults, or one-half of 1% of the U.S. population. About 300,000 adolescents ages 13 to 17, or 1.4%, identify as transgender, according to a study by UCLA School of Law.
In West Virginia, as Justice Sonia Sotomayor observed in her dissenting opinion, “there was no record of any transgender person participating in school sports in the State, let along any ‘problem’ with transgender students … creating unfair competition or unsafe conditions.”
In endorsing the flat bans directed at transgender women in Idaho and West Virginia, Kavanaugh argued that any attempt to implement case-by-case judgments of students’ requests to join sports teams inconsistent with their biological gender would create “an enormous practical and administrability problem.”
Is that so? That wasn’t the case in Maine, where the annual K-12 population is more than 170,000. There, a committee was charged with determining whether a student’s participation in a sport consistent with their gender identity but inconsistent with their biological sex would “result in an unfair athletic advantage” or present a risk of injury to others. The committee held 56 hearings from 2013 through 2021, or an average of seven per year. During the entire time span, only four involved transgender girls. (The outcome of those hearings couldn’t be learned.)
It was Maine’s policy, one might recall, that provoked a confrontation between Trump and Maine Gov. Janet Mills at the White House last year, when Trump threatened to withhold federal funding from the state unless it barred transgender students from competing on women’s sports teams. “We’ll see you in court,” Mills snapped.
Whether the Idaho and West Virginia laws genuinely protect girls from unfair competition is questionable. (The Idaho law is styled the “Fairness in Women’s Sports Act.”) In practice, the laws may subject women in public schools to “invasive sex verification procedures,” as educational expert George Theoharis of Syracuse University wrote after the court ruling.
They’re also based on a retrograde view of women as fragile creatures needing men’s protection, Theoharis wrote — “the same logic that has historically been used to justify excluding women from making their own healthcare decisions and girls from rigorous math and science; that physically demanding work is simply beyond them.” (There don’t appear to be any state laws barring transgender women from competing in men’s sports.)
Becky Pepper-Jackson, the plaintiff in the West Virginia case, in which she is identified only as B.P.J., is the only transgender girl who sought to join girl’s teams — track and cross-country — in the state. That was in 2021, just after West Virginia passed its law and she was about to enter sixth grade. She didn’t appear to pose any competitive risk to others on the track and cross-country teams she applied to join — her lawyers told the Supreme Court that on those no-cut teams, she “came in near the back.”
Anyway, she had not gone through male puberty, which theoretically might have endowed her with a competitive advantage, because she had been taking puberty blockers and female hormones.
Thanks to the court’s ruling, Sotomayor observed in a dissent joined by Justices Elena Kagan and Ketanji Brown Jackson, West Virginia can deny Becky access to school sports “because it thinks they have an inherent athletic advantage, even if the facts show that they do not.”
B.P.J., Sotomayor wrote, “cannot practice on girls’ teams, even if she would not take anyone’s spot in an eventual competition, even if everyone who tries out for the team makes it, and even if having the chance to participate could aid immensely in treating B. P. J.’s gender dysphoria.”
So whose interest was really protected by the Supreme Court?
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