What’s Working: What some Coloradans think about the proposed supermarket megamerger

Try as they might to assure customers that grocery stores won’t close and prices won’t rise after a proposed supermarket megamerger, Kroger and Albertsons executives might as well be on trial to testify under oath.

Of course, that’s exactly what’s been happening in room 414 of Denver District Court for the past four weeks. The Colorado attorney general’s case attempting to block the union of the parents of Safeway and King Soopers ended Thursday. The future of the proposed $24.6 billion merger is now up to Judge Andrew Luxen, at least here in Colorado. The Federal Trade Commission’s antitrust case is separate.

In Colorado, the merger would result in 91 Safeway and Albertsons stores sold to retail newcomer C&S Wholesale Grocer, while millions of dollars would be invested to lower prices at the 91 stores plus another 14 Safeways that Kroger plans to keep. No stores would close, company executives testified.

But details the AG’s team of lawyers dug into during the trial have readers incredulous, especially grocery store executives’ acknowledgement that eight City Markets, mostly on the Western Slope, were deemed “mountain no comp” zones and prices were raised.

“Proof is in the pudding,” said Greg Ching from Lafayette in response to last week’s What’s Working poll asking readers to share thoughts and concerns about the proposed merger.

So far, 29 people have responded. Most said something along the lines that despite corporate promises, they feel a grocery store will close in their town, even if other competition remains.

“Huge concerns,” said Marcella Schieffelin, who moved in April to Grand Junction where a Safeway closed in 2015 after a different supermarket merger. “There is potential for price gouging and stores without union representation, higher unemployment, and stores closing creating food deserts and increased barriers due to the need for people to travel greater distances to get food and supplies like medicine.”

It’s already rough in Gunnison, said resident Mandi Leigh, where there’s a Safeway, City Market, Natural Grocers and a locally owned grocery store (looks like there’s also a Walmart offering some groceries).

“That may sound like a lot of options, but in the summer months food sells out and parking lots are insane,” as tourists and second-home owners flock to town, Leigh said in an email.

Many local residents organize their shopping based around the arrival of food delivery trucks, she added. “There is always something to eat, like vegan cheese and meat substitutes and myriad processed foods. But, finding an onion in the summer is a celebration. Sometimes they label produce ‘limit two’ at City Market and Natural Grocers.”

Kroger plans to keep the Gunnison City Market while C&S is slated to buy the Safeway. Here’s a map of what would happen to Colorado’s Albertsons and Safeways if the merger goes through as planned.

Jack Buffington, an associate professor at University of Denver Daniels College of Business who specializes in supply chain management and marketing, said even if judges in the Colorado and FTC cases rule in favor of the people, the grocery stores can always appeal. His sense is they’re waiting for the outcome of the presidential election. A Republican win would likely undo or be less supportive of FTC Chair Lina Khan’s pursuit of antitrust cases.

In his view, Kroger and Albertsons can’t catch up with a competitor like Walmart, which has figured out how to sell food to customers cheaper and more efficiently — online, in-store or via curbside pickup. Mergers typically do provide cost-cutting benefits, which in the case of supermarkets could be by consolidating the number of suppliers and local stores, especially those next to one another.

Traditional supermarkets continue to have a large footprint and Kroger will gain a couple thousand stores if the planned merger is successful.

“I say shoppers should do their homework and do their research,” Buffington said. “But I’m just as guilty as anyone else, I just go to the store that’s closest to me. And they’ve got a big footprint. … I don’t think they’re going to go away anytime soon.”

Earlier coverage:

➔ Future of Colorado Safeway stores now up to Denver judge. Colorado AG’s case points to Kroger and Albertsons’ anti-competitive past, but Kroger says plans to lower prices and compete with divestiture partner C&S makes business sense in $24.6 billion merger. >> Read story

➔ By the numbers: Colorado’s antitrust trial to block the Kroger-Albertsons merger. Here are some numbers we’ve learned that could impact Colorado. >> Read story

How big is Big Tech in Colorado?

Policy experts from Microsoft, IBM, Amazon showed up in Denver at a task force meeting Monday to help revise the state’s new artificial intelligence law. Google and Salesforce had representation as well, though those two attended virtually.

The new AI law is controversial because it is the first of its kind to pass in the nation that regulates AI’s potential harm to consumers. Other states have considered similar laws, but they didn’t pass. At least not yet. More laws are expected. Here’s my story from earlier this week: “Google, Microsoft seem OK with Colorado’s controversial AI law. Local tech not so much.”

But for those who are counting, some of the big technology companies shared updates on how big they are in Colorado:

Colorado’s September unemployment rate: Unchanged at 4%

Last month, two job numbers rose in Colorado: The number of unemployed Coloradans, at roughly 130,800, and people in the labor force, at 3,249,200. That put the state’s September unemployment rate at 4%, the same as August, due to rounding.

That’s lower than the nation’s 4.1%, which has fallen in the past three months. But Colorado’s unemployment rate has also been rising since December.

The state continues to add jobs — and more in September than in August. It was one of five states with the top job gains last month, adding 12,700 jobs in a number of industries, said Gary Horvath, an economist at Cber.co in Broomfield. Job growth had been slowing so September’s uptick shows “Colorado employment is returning to a more sustainable rate of growth,” he said in his latest economic analysis.

But as all labor economists warn, data gets revised. August’s job gains were revised downward to 7,000, instead of the previously announced 7,400, according to the state Department of Labor and Employment.

We’re also still trying to set aside time to look into what changed with the state’s job data that may lead to more drastic job growth revisions in past years. Stay tuned.

More local job stats:

• The average workweek for Colorado workers employed at private companies grew to 33.8 hours from 33.4 hours a year ago. 
• Average pay for the same Colorado worker increased 7.3% in the past year to $38.64 an hour. The U.S. rate was at $35.36.

• Adjusted for inflation, the average Colorado worker’s paycheck has increased 3.5% in the past year (the green bar on the far right in the chart above).
• In the past year, the Colorado Springs metro area has seen the largest job-growth rate, at 2.1%, while Denver and Grand Junction saw declines of 0.1%. Statewide, the job growth rate in the past year was 1.6%, a slowdown since the pandemic recovery.
• September unemployment rates (not seasonally adjusted) by metro region:
  • Boulder: 3.8%, 
  • Colorado Springs: 4.2%
  • Denver: 4.1%
  • Fort Collins: 3.7%
  • Grand Junction: 4.2%
  • Greeley: 4.2%
  • Pueblo: 5.5%

➔ See the state’s data

Sun economy stories you may have missed

➔ Coloradans can now compare hospital prices for specific procedures, insurance plans. ColoradoHospitalPrices.com allows users to compare prices across multiple hospitals. >> Read story

➔ It’s the people vs. their counties on two major infrastructure ballot measures in Colorado. Who makes infrastructure decisions: citizens or the government? >> Read story

➔ Health insurance prices for some in Colorado will go up next year. Here’s how much. >> Read story

Other working bits

➔ Colorado’s retirement program still growing. The state’s SecureSavings program now has 62,000 accounts with an average balance of $1,300. That’s approximately 62,000 more people who are saving for retirement before January 2023, when the program launched. Total saved so far? About $81 million, according to the Colorado State Treasurer’s office, which oversees the program. In May, the office said roughly 55,000 accounts had been created. >> More, earlier Sun story

➔ Colorado Springs Airport gets $8 million grant. They’ll use it to modernize the airport as part of a $36 million interior upgrade already underway. Called Elevate COS, the effort is updating the lighting, terrazzo flooring, bathrooms, charging stations, gate counters and adding new food and retail options.

According to the project’s site, no taxpayer money is being used though most of the funding comes from the Federal Aviation Administration, which itself is primarily funded by aviation excise taxes on airline tickets, cargo and general aviation fuel. The new $8 million grant announced Thursday comes from President Biden’s Bipartisan Infrastructure Law. Project Elevate COS estimates a completion date of fall 2026. >> Project details

➔ Colorado ramps up new Disability Opportunity Office. The state’s labor department hired Danny Combs to head up the newly established Colorado Disability Opportunity Office, created last legislative session with House Bill 1360. The goal of the new department is to create a statewide strategy to help Coloradans with disabilities find better economic opportunities. As part of the new law, the state appropriated $5.5 million to support the new director and department. Combs, who starts Nov. 12, founded Teaching Autism Community Trades and cofounded the Colorado Neurodiversity Chamber of Commerce. >> News release

➔ The Colorado Sun is hiring! We were just awarded a $1.4 million grant to help us figure out how to keep our local news operation sustainable. Thanks to all the What’s Working readers who support The Sun through an ongoing membership. But membership hasn’t been growing as fast as it needs to so we’re hoping this grant will help us figure that out by providing funding for us to hire a development director and general manager. Know someone who appreciates local journalism and would be a good fit? Please share! >> Apply

Got some economic news or business bits Coloradans should know? Tell us: cosun.co/heyww

I wasn’t sure I’d get a newsletter out this week because I’d been preoccupied with the Kroger-Albertsons merger trial. But somebody’s gotta cover it! Thanks for tuning in and FYI: I’ve got reporting threads in the works for future stories on what’s happening with Colorado insurance, minimum-wage increases, job data, unaffordable housing and more.

As always, share your 2 cents on how the economy is keeping you down or helping you up at cosun.co/heyww. ~ tamara

Miss a column? Catch up:

• Ballot measures in three locations could help rural women bring home the bacon
• Denver-area inflation slows again to 1.4% in past 12 months 
• Colorado’s misery index shows we are less miserable, though it may not feel like it
• Cooling Colorado Springs’ job economy’s top concern? Housing affordability
• Cities like Denver want AI to handle boring, tedious tasks
• Techstars Denver spotlights tech startups tackling workforce issues
• Colorado homeowners insurance increased nearly 60% in five years
• How a Colorado program is linking quantum, space and tech companies to a future workforce
• Colorado incentives are helping rural firms transition to employee ownership

What’s Working is a Colorado Sun column about surviving in today’s economy. Email tamara@coloradosun.com with stories, tips or questions. Read the archive, ask a question at cosun.co/heyww and don’t miss the next one by signing up at coloradosun.com/getww.

Support this free newsletter and become a Colorado Sun member: coloradosun.com/join

Corrections & Clarifications

Notice something wrong? The Colorado Sun has an ethical responsibility to fix all factual errors. Request a correction by emailing corrections@coloradosun.com.

Link to original article