The Friday Checkout is a weekly column providing more insight on the news, rounding up the announcements you may have missed and sharing what’s to come.
Kroger is facing a gauntlet of legal challenges to its proposed merger with Albertsons, and a decision in any of those cases could still be weeks away. But Wall Street analysts and investors seem to have already made up their minds: Kroger is going to lose this battle.
“The market is anticipating that the Kroger-Albertsons deal will not be approved,” Eric Pettway, chief investment officer at Journey Advisory Group, told the Cincinnati Business Courier.
Kelly Bania, an analyst with BMO Capital Markets, told the Business Courier she sees a 70% chance that the FTC will win its case against the grocers, while Arun Sundaram, an analyst with CFRA Research, gave similar odds to Grocery Dive, saying Kroger has just a 20% chance of pushing its deal through at this point.
Albertsons’ stock price reflects a similar pessimism from investors. The grocer, which could see store closures, a pullback from markets and other measures implemented if a deal doesn’t go through, according to its legal team, has seen its stock drop around 10% since the federal trial kicked off in late August.
What’s behind this negative outlook? The divestiture plan has always been a tough sell, given the scattered array of assets C&S Wholesale Grocers would inherit and the company’s lack of retailing experience. And analysts say the FTC has made a strong case against eliminating competition in the supermarket industry. While Kroger’s defense has largely rested on expanding competition from Walmart, Amazon and Costco, the agency’s lawyers noted during closing arguments on Tuesday that many local markets in the U.S. don’t have convenient access to all these choices — but they do rely on Kroger and Albertsons stores.
Even Kroger seems to be laying the groundwork for a loss. During its quarterly earnings call last week, Chairman and CEO Rodney McMullen tried to reassure investors that the company would be fine no matter what happens.
“Regardless of the outcome of the trial, Kroger is operating from a position of strength, and we are optimistic about our future,” he said. “Our business is more diverse than ever, and our value creation model provides us with multiple ways to drive sustainable growth.
In case you missed it
Pennsylvania grocers toast to new canned cocktail law
Pennsylvania supermarkets can now welcome ready-to-drink cocktails to their store shelves, thanks to a new state law that took effect on Monday. At least two grocers in Pennsylvania announced plans this week to take advantage of the new law.
Weis Markets said Tuesday that 92 of its stores in the state would start selling ready-to-drink cocktails on Wednesday. The Giant Company, meanwhile, said it received permits from the Pennsylvania Liquor Control Board to sell ready-to-drink cocktails at 138 of its stores in the state. Both grocery chains said they plan to sell local and national brands.
Albertsons adds new way for customers to buy health and wellness items
Albertsons now accepts the CareCredit health and wellness credit card at nearly 2,200 stores under banners including Albertsons, Safeway, Vons, Acme, Shaw’s and Jewel-Osco, according to a Wednesday announcement.
CareCredit cardholders can use their card to buy health and wellness products including pharmacy items like prescriptions; qualified over-the-counter health products like vitamins and cold medications; personal care items; beauty and hair care; pet supplies; and qualified baby essentials.
It builds on the grocer’s efforts to accept different payment methods for items in its stores. In April, Albertsons started allowing NationsBenefits members to use their benefits card to buy groceries across all the supermarket operator’s banners.
Lunds & Byerlys goes digital for refrigeration compliance
The upscale Twin Cities grocery retailer picked Facilio, a facility management solutions provider, to digitize its refrigeration compliance management and store facilities operations, according to a Tuesday announcement. Facilio said the partnership will help the grocer stay ahead of the Environmental Protection Agency’s proposed AIM Act.
The company’s refrigeration management platform automates leak detection and compliance management. “By performing leak inspections every 45 days, Lunds & Byerlys can now automatically create inspection entries for all appliances. If a leak is found, Facilio's platform generates a leak event, enabling swift corrective action,” the announcement said.
Impulse find
Drop everything! Trader Joe’s brings back viral mini tote bags
After causing a stir this spring, the mini canvas tote bags at Trader Joe’s are finally back.
The grocery chain restocked the $2.99 limited-time bags on Sept. 18, The Today Show reported. The bags are available in navy, green, red and yellow and measure about 13 inches long by 11 inches tall by 6 inches wide, according to Trader Joe’s website.
The grocer says the bags are “made of the same heavy duty, 65% cotton/35% polyester blend as our larger, classic Canvas Bags.”
Better snag one while supplies last — earlier this year people listed the tote bags for resale on third-party sites like eBay and Facebook Marketplace for nearly 200 times their retail value, CNN reported.
