Shoppers come and go from Fred Meyer and Carrs stores that face each other across the Seward Highway in Midtown Anchorage on Thursday, Aug. 8, 2024. The parent companies of the competing businesses, Kroger and Albertsons, want to merge. (Matt Faubion/Alaska Public Media)
Last week, Alaska Congresswoman Mary Peltola joined 27 other D.C. lawmakers from 16 states in a legal brief backing a lawsuit by federal regulators to block a massive, national grocery store merger.
Most Alaskans live in a community where a Fred Meyer store competes directly with a Carrs or a Safeway, so the proposal for one parent company to buy the other for $24.6 billion has a lot of Alaska consumers worried.
Here’s what we know about where the proposal is now, after it was first announced in October of 2022.
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What’s at stake?
If you take what the companies are saying in good faith, not much. They’ve made sweeping promises about the good things that will happen and the bad things that won’t if Kroger, which owns Fred Meyer, is allowed to buy Albertsons, which owns Safeway and Carrs. The companies say investors, customers, workers and communities are all supposed to benefit.
“We are confident our transaction with the proposed divestitures will mean lower prices and more choices for customers,” Kroger CEO Rodney McMullen said in a video about the proposed merger. “It will mean more opportunities for retail associates to grow their career while we secure the future of good paying union jobs.”
Here are some of the specific promises Kroger and Albertsons have made:
No store closures
No pharmacy closures
No front-line job losses with protection for worker pay and benefits
A $500 million investment in reducing prices
A $1 billion investment in employee benefits
A $1.3 billion investment to improve Albertsons stores
Kroger points to its 20-year track record that includes lowering its profit margins to keep prices down amid past acquisitions.
How can all of these promises be possible?
The idea is if Kroger and Albertsons merge, they’ll be in better shape to compete with even bigger retailers, like Costco and Walmart, as well as growing competitors, like dollar stores that now sell groceries and even Amazon. Bigger scale means bigger efficiencies, and that’s where the upside is supposed to come from.
Of course, most Alaskans live in communities where Fred Meyer competes with Carrs or Safeway. Specifically, that’s Anchorage, Eagle River, Palmer, Wasilla, Fairbanks, Juneau and Soldotna.
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Federal regulators are wary of mergers because they can be anticompetitive, concentrating too much market power and hurting regular shoppers. To try to win regulators’ approval, Kroger and Albertsons say they’re prepared to sell off all 15 of the Carrs and Safeway stores in those Alaska communities, plus three more in Girdwood, Kenai and North Pole, to a company called C&S Wholesale Grocers based in New Hampshire.
The Safeways in Seward, Valdez, Kodiak, Ketchikan, Nome and Unalaska are not on the divestment list and would remain with the merged company.
Nationally, Kroger and Albertsons plan to sell a total of 579 stores, plus six distribution centers and a dairy plant, to C&S.
Again, McMullen says these divested stores won’t close, because C&S is committed to running them as they are today.
Albertsons CEO Vivek Sankoran says C&S will make the landscape more competitive.
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“Their deep industry knowledge and experience gives us great confidence in their ability to become even fiercer competitors moving forward,” Sankoran said in the video.
C&S CEO Eric Winn also says his company is playing the long game.
“We are confident this expanded divestiture package will provide the stores, supporting assets and expert operators needed to ensure these stores continue to successfully serve their communities for many generations to come,” Winn said in an April press release.
The United Food and Commercial Workers Local 555, which represents 30,000 grocery store workers in Oregon, Idaho and Washington, came out in support of the merger in February. However, the parent union, which represents 1.2 million workers, voted last year to oppose the merger. Other UFCW locals, including Alaska’s, also oppose the merger.
So what’s the problem? Why do people oppose the merge?
Basically, opponents just don’t believe the companies, and there isn’t anything in place to hold them to their promises.
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In Alaska, the opponents include Democratic Congresswoman Mary Peltola, 24 state lawmakers, the grocery store workers’ union and lots of regular Alaskans.
“It’s a huge issue for Alaskans that resonates. It’s not a political issue, it’s a pocketbook issue,” said Veri di Suvero, executive director of the Alaska Public Interest Research Group, a statewide consumer advocacy nonprofit that also opposes the merger. “Whether or not it’s in good faith, about these spinoffs, we’ve seen over and over again that they don’t work.”
Di Suvero points back to 1999, when Safeway bought out Carrs. AKPIRG and Alaska’s attorney general got involved, and they worked out a deal to sell off seven stores to let the merger go through.
Six of those stores became Alaska Marketplace grocery stores. They all closed within about a year.
The seventh, at the University Center mall in Midtown Anchorage, survived and became a different grocery store, Natural Pantry, which eventually outgrew the space and built its current, standalone location off 36th Avenue.
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Fast forward to 2015, and Safeway got swallowed up by Albertsons. Federal regulators approved that deal after the companies agreed to divest 168 stores. 146 went to a small Washington grocery retailer called Haggen.
Haggen wasn’t successful, either. Within a year, Haggen sued Albertsons and accused it of sabotaging stores it bought. It got sued back by Albertsons and filed for bankruptcy. In the ensuing firesale, Albertsons ended up buying back many of its divested stores, and ultimately what remained of Haggen itself.
Di Suvero is also concerned about how unique Alaska’s supply chain is, particularly its heavy dependence on a single port. Di Suvero and other opponents question if C&S has the expertise and wherewithal to step in and run its new grocery stores successfully.
So critics think C&S is setting itself up for failure, like Haggen?
Yes.
C&S isn’t a national player in the world of retail groceries. It owns the Piggly Wiggly brand and runs some Piggly Wiggly stores directly, but most are independently owned and operated under a franchise license. It also runs 11 Grand Union markets.
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But C&S is a big deal nationally in grocery wholesaling, supplying more than 7,500 supermarkets. Forbes says it’s an industry leader in supply chain innovation, the largest wholesale grocery supply company in the country and the eighth biggest privately held company in the country. So C&S is in a totally different league from Haggen.
That said, the Federal Trade Commission says C&S doesn’t have its own store brand product lines, loyalty programs or e-commerce platforms it needs to successfully compete.
Does Alaska figure prominently into the overall merger?
No.
Kroger and Albertsons combined have 36 stores in the state. That’s 11 Fred Meyers, and 24 Carrs or Safeways plus Crow Creek Mercantile in Girdwood. Across the country, they have about 5,000.
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And unlike in the Safeway-Carrs merger in 1999, the governor’s office has been hands off. Gov. Mike Dunleavy has not weighed in. The state Department of Law, which has its own consumer protection unit, says it’s monitoring the merger and the Federal Trade Commission’s legal fight to stop it.
Outside of Alaska, eight states and the District of Columbia have joined the FTC’s lawsuit in federal court in Oregon.
And the attorneys general of Colorado and Washington have their own similar lawsuits.
What happens if the merger gets shot down?
There’s a lot invested in this merger. A reporter with WCPO in Cincinnati, where Kroger is headquartered, dug through financial filings and found that through March, the two parent companies had already spent $864 million in merger-related expenses.
WCPO also found that Kroger had agreed to pay Albertsons $600 million if the merger fails.
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So that’s a big incentive for Kroger to appeal if these legal fights don’t go its way.
So what’s next?
The legal stuff.
Hearings in the FTC case at the U.S. District Court of Oregon begin Aug. 26. This case is important, but won’t necessarily make or break the merger. The judge there is supposed to rule on whether or not to pause the merger, while more substantive arguments go before an administrative law judge in Washington, D.C.
The trial in the Washington state court is scheduled to begin Sept. 16, and, separately, a Colorado state judge last month imposed his own order to pause the merger, pending a legal challenge there. That trial is scheduled to begin Sept. 30.
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Jeremy Hsieh covers Anchorage with an emphasis on housing, homelessness, infrastructure and development. Reach him atjhsieh@alaskapublic.orgor 907-550-8428. Read more about Jeremyhere.
Planning a trip can be complex with so many factors to think about, such as weather, routes, timing and efficiency. Here at Alaska, we sift through tons of data to make sure every flight is safe and efficient. As part of the ongoing journey to innovate and ensure a great travel experience for our guests, we’ve renewed our partnership with Air Space Intelligence (ASI). They use artificial intelligence to optimize flight paths and cut down on emissions via their Flyways AI Platform.
ASI’s Flyways AI Platform utilizes advanced algorithms and machine learning to analyze vast amounts of data, including weather patterns, winds, turbulence, airspace constraints and air traffic volume. Flyways AI then generates optimized route recommendations for dispatchers and pilots that are safe, ATC compliant, minimize fuel consumption, reduce flight time and avoid potentially congested airspace. Additionally, the Flyways Dispatch application offers real-time insights and decision-making support to our dispatchers, empowering them to proactively manage flights and respond to events before they have the potential to impact flights.
Being a dispatcher requires attention to detail, problem-solving skills, and quick thinking. Our incredible dispatchers are responsible for planning and monitoring every flight, ensuring the safety and comfort of our guests and crew. It can be challenging to deal with unpredictable factors like weather, traffic, and timing, but we always strive to find the best solutions,” said Captain Bret Peyton, managing director of network operations control, Alaska Airline. “That’s why we are grateful to have Flyways AI to help us optimize our routes, save fuel, and reduce carbon emissions. Flyways AI gives us more confidence and flexibility in our decisions and allows us to focus on delivering excellent service to our guests.”
For the last four years, we have utilized the Flyways AI platform and the Dispatch application in our Network Operations Center to optimize flight routes, reduce fuel consumption and carbon emissions, as well as improve on-time arrivals. On average Flyways AI has presented optimization opportunities for 55 percent of Alaska’s flights and delivered three to five percent fuel savings and emissions reductions for flights longer than four hours. Specifically last year, optimized routes using Flyways saved over 1.2 million gallons of fuel, equivalent to 11,958 megatons of CO2 emissions. The savings Flyways delivers helps us work toward our near-term goal of being the most fuel-efficient U.S. airline by 2025, and long-term goal of net zero carbon emissions by 2040.
We are excited to continue working with ASI to expand the use of Flyways AI across our network and explore new ways to leverage AI to enhance our operations and service. We believe that Flyways is a game-changer for the aviation industry and a win-win for our guests, our employees and our planet.
ANCHORAGE, Alaska (KTUU) – Salmon are synonymous with the state. To many Alaskans, they are more of a lifestyle than a species of fish.
They are woven into the fabric of the state through rivers, streams, and oceans. They have filled freezers and underground ice cellars for generations and have provided thousands of jobs and billions of dollars per year for the fishing industry.
All of these reasons and more are why former Gov. Bill Walker signed House Bill 128 into law in 2016, establishing Aug. 10 of each year as Alaska Wild Salmon Day.
”It’s hard not to think about salmon when you think about Alaska,” Alaska Department of Fish and Game Commissioner Doug Vincent-Lang said. “I am surprised it is not on our state flag. We’ve got eight stars of gold, but one of those stars could definitely be salmon.”
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From colossal kings to chromochrome cohos, to pinks, chunky chum, and scrumptious sockeyes, there are many reasons why they deserve their own day.
“Given the importance of salmon to our culture, to our food security, to our enjoyment in getting outside, and really to our commercial fisheries which are really the fabric of many of our coastal communities, it’s really a great day to celebrate the legacy of salmon in Alaska.”
Alaska will celebrate its ninth of hopefully many Wild Salmon Days to come on Saturday.
”Wild Salmon Day should not only be celebrating what we’re doing today, but should be an opportunity for us to make sure we’re passing on these heritages and traditions that are so important to Alaska,” Vincent-Lang said.
Chue Yang, co-owner and director of the Hmoob Cultural Center of Alaska, talks with a young boy as they play with magnetic blocks at the center’s child care facility in Anchorage on Thursday, Jan. 19, 2023. (Emily Mesner / ADN)
The good news of help on the way for the child care sector, reported July 29, is worth celebrating. We have seen considerable progress in child care policy and local, state and federal funding. Thank you to our policy leaders for making a change in the right direction for child care.
On the local level in Anchorage, Prop. 14 was approved by voters and will create a $5 million boost to early education and child care in the Municipality of Anchorage. While work is still being done to set up the program, it is heartening that an identified priority is to address the low wages of child care professionals.
On the state level, the Legislature and governor approved two budget items and one major piece of legislation that will provide operational support for child care programs, make child care more affordable for families, and ensure that Head Start programs receive more of their federal funding match.
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$7.5 million in one-time child care grants: This represents a critical investment in child care programs with grants that can be used for operational and wage support. We hope to see this as an annual appropriation next year.
$2.6 million Head Start appropriation: This helps the state receive more of its allocated federal funding and can be used to increase wages and expand capacity for dozens of programs around the state.
$9.6 million child care assistance increase and business tax credits: Senate Bill 189, which includes elements of House Bill 89, marks the first-ever child care legislation passed in Alaska. This bill allows the state to help programs get reimbursed based on the actual cost of care of delivering services, not a preset market rate that is artificially low, especially for infants and toddlers. This bill also makes child care more affordable for thousands of Alaska families by expanding eligibility to the Child Care Assistance Program and offers tax credits to businesses that spend money on child care for their employees.
On the federal level, Congress’ most recent budget, supported by all three Alaska congressional members, increased funding for the child care Development Block Grant (CCDBG). This annual increase means a $1.3 million increase to Alaska to help administer the child care Grants and child care Assistance programs.
While we are celebrating progress in policy and funding, the child care crisis in Alaska continues. Child care programs continue to close faster than new programs open, and workforce shortages and high turnover remain, creating a growing supply gap. Despite stopgap funding, child care needs more long-term solutions for a sustainable and thriving sector.
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All in all, to offer child care stability to Alaska families, we need to give child care programs the fiscal stability they need. One-time funding from federal COVID-19 relief and the state has been an important Band-Aid for the child care system, but the adhesive has worn off. We must continue working toward long-term funding relief that reflects the importance of child care to Alaska families and our economy.
Even though our state has made historic investments in child care this year, programs will not see the benefit until next year, and more needs to be done to build on this success and stabilize our child care system. Let’s keep up the momentum of new policy and funding for child care.
Alana Humphrey is the public policy committee chair on the board of Thread, Alaska’s child care resource and referral organization. She was formerly the chief executive officer at Boy and Girls Club-Alaska.
The views expressed here are the writer’s and are not necessarily endorsed by the Anchorage Daily News, which welcomes a broad range of viewpoints. To submit a piece for consideration, email commentary(at)adn.com. Send submissions shorter than 200 words to letters@adn.com or click here to submit via any web browser. Read our full guidelines for letters and commentaries here.
:quality(70)/cloudfront-us-east-1.images.arcpublishing.com/adn/XPDH7K7WSJGC5P4HLJR3HTGQVE.JPG "OPINION: Alaska child care gets a welcome boost, but need continues")
