Thousands of workers at two of America’s biggest supermarkets are warning of potential mass layoffs as the giant firms seek to merge.
Kroger, the second-largest U.S. grocery chain, and Albertsons, the fourth-largest, are seeking a merger through the Federal Trade Commission, which is reviewing the proposal.
The local union, which represents more than 100,000 Albertsons and Kroger workers, strongly opposes the merger because of the potential impact on competition, prices to consumers and job cuts that would result in the loss of many stores.
During a U.S. Senate panel hearing, Kroger CEO Rodney McMullen insisted there would be no layoffs, but said the company plans to spin off 100 to 350 stores as a spin-off company. Kroger announced it will pay about $4 billion in special dividends to shareholders as part of the merger deal and spend $24.6 billion to acquire Albertsons, and expects the deal to close by early 2024 if approved by federal regulators.
“A win for our customers, a win for our partners and a win for our communities,” McMullen said in support of the merger. McMullen’s $18 million in total compensation is 679 times more than the average employee at Kroger.
But many grocers who witnessed the 2014 and 2015 merger between Albertsons and Safeway saw similar promises made by corporate executives and then broken.
Naomi Oligario worked at a Safeway store in Port Orchard, Washington for 31 years when Albertsons bought the company. His store was torn down and closed under the Haggen grocery stores. Employees were not allowed to transfer to another store or they would lose their seniority and the benefits that came with it. While working at the new Haggen, Oligario said prices have increased significantly, crowding out regular customers.
The store closed a few months later, and Oligario and other employees had to reapply to work at another Safeway store or find another job.
“It was a fiasco and heartbreaking because some people who had more seniority than me didn’t get their jobs back,” Oligario said. “It’s frustrating to think we might have to go through the whole fiasco again.”
As a store manager with the United Food and Commercial Workers, Oligario said many of his co-workers are concerned about the proposed merger of Kroger and Albertsons.
“The CEOs of Kroger and Albertsons are here to make the merger sound good. They don’t think about workers and consumers. They think about their pockets,” Oligario added.
A Kroger spokeswoman said: “We are committed to building on our expertise in supporting partners by investing $1 billion to continue to increase employee pay and comprehensive benefits following the closing of the merger.
“Kroger will not close any stores, distribution centers or manufacturing facilities as a result of this merger, including those that may need to be divested to obtain regulatory approval.”
But many workers remain in fear.
Kyong Barry, who has worked at Safeway in Auburn, Wash., for nearly 20 years and is a member of the UFCW board, criticized the merger as a potential disaster for many workers, given their past experiences.
Barry said: “They lost their careers, their homes, their dignity. The Albertsons and Safeway merger rewarded the employees that made them profitable, and it will happen again with the Kroger merger.
When Albertsons acquired Safeway in 2014, Christine Martinez worked as a pharmacy technician at Pavilions, a Safeway subsidiary in Valencia, California.
“The company told us that the merger would be really beneficial for its employees. They really looked like a win-win, but it really wasn’t,” Martinez said. “It was really traumatic, really stressful.”
His store was the one that was divested from the merger and became Haggen. During the transition, Martinez said, he and other employees were often paid late, and the store closed several months later, leaving Martinez and his co-workers out of a job.
He now works as a pharmacy technician at Ralph’s, a subsidiary of Kroger, and worries that the same problems will happen.
“I think here we go again with this situation,” Martinez said. “People are going to lose their jobs, it’s going to happen again and it’s not going to be good for the workers. “Many workers are really worried.”