LIZ: WELCOME TO M & A GROCERY
GAMES THE SECOND-LARGEST
SUPERMARKET CHAIN IN AMERICA,
KROGER, OFFICIALLY OFFERED TO
BUY ALBERTSONS IN A DEAL WORTH
$24.6 BILLION.
KROGER IS GOING TO ACQUIRE ITS
SMALLER RIVAL FOR $34.10 A SHARE
RIGHT NOW YOU DO HAVE ALBERTSONS
AT $26.38 AND INVESTORS DON’T
LIKE THIS DEAL.
ALBERTSONS IS DOWN ABOUT 8.8%,
ABOUT 4.7 BILLION OF ALBERTSONS
DEBT THAT’S A 33% PREMIUM TO
ALBERTSONS CLOSING PRICE
WEDNESDAY.
TOGETHER, THE TWO WILL EMPLOY
MORE THAN 700,000 PEOPLE ACROSS
5,000 STORES.
JOINING ME NOW WITH WHAT THIS
MEANS FOR THE GROCERY
INDUSTRY, WHICH HAS BECOME SO
WILDLY COMPETITIVE, IS STRATEGIC
RESEARCH GROUP MANAGING DIRECTOR
, BERT FLIKCINGER, WHO
OWNS BOTH SHARES OF ALBERTSONS
AND KROGERS CORRECT?
>> YES.
LIZ: WHAT DO YOU MAKE OF THIS
DEAL?
DO YOU LIKE IT BECAUSE THE
MARKET DOESN’T.
>> LIZ THE MARKET DOESN’T LIKE
IT BECAUSE THE FEDERAL TRADE
COMMISSION HAS BEEN OVERLY TOUGH
ON THE STOP AND SHOP ACQUISITION
AND IT WASN’T THE ACQUISITION.
IT WAS JUST THEY CHOSE THE WRONG
EXPERTS THAT MADE THE ERRONEOUS
ASSUMPTIONS AND CONCLUSIONS, AND
PRIOR TO THAT, THE STAPLES
OFFICE MAX MERGER AND THE
FEDERAL TRADE COMMISSION,
LIZ, REALLY NEEDS TO LOOK AT
THIS LIKE COSTCO’S ACQUISITION
OF PRICE CLUB, DECADES AGO AND
THEY NEED TO LOOK AT IT AS THE
COMBINATION OF MARSHALL’S
AND TJ MAXX, AND WE’VE WORKED
WITH ALL THESE COMPANIES AND
IT’S CRITICAL FOR MIDDLE CLASS
LIVING BECAUSE NOBODY DOES MORE
AT A LOWER PRICES FOR CONSUMERS
AND RAISES THE STANDARD OF
LIVING FOR BOTH SHOPPERS AND
WORKERS THAN THE KROGER COMPANY
AND ALBERTSONS RESPECTIVELY, AND
TO COMPETE AGAINST WALMART,
COSTCO, AMAZON, ET CETERA IT’S
ESSENTIAL THIS DEAL GOES THROUGH
AND IT’S ESSENTIAL THEY HIRE THE
RIGHT EXPERTS WITH THE RIGHT
SKILLS.
LIZ: THAT’S WHAT I WANTED TO
KNOW.
WHO SHOULD BE MOST NERVOUS ABOUT
THIS?
I MEAN, I THINK ABOUT WALMART,
FOR EXAMPLE, BECAUSE IF YOU PUT
KROGER AND ALBERTSONS TOGETHER,
AND THE BRANDS BEHIND BOTH OF
THESE NAMES, THEY COULD REALLY
DO SOME PRICE CUTTING COULD THEY
NOT?
>> THEY COULD DO TREMENDOUS
PRICE CUTTING TO YOUR IMPORTANT
POINT, LIZ, AND AT THE SAME TIME
, THEY HAVE MORE NEGOTIATING
LEVERAGE WORKING ON THE SECOND
COPY OF OUR BOOK, THE EXPLOSIVE
GROWTH OF PRIVATE LABEL BRANDS
IN NORTH AMERICA, WITH KROGER,
ALBERTSONS AND ALL OF THE
LEADING RETAILER IN THE U.S.
AND CANADA, SO TO GET
THE PRIVATE LABEL SHARE TO
WHERE IT IS, IRELAND, ENGLAND,
SCOTLAND, CANADA, NEW ZEALAND,
AND AUSTRALIA, WHICH IS 50 TO 60
% IN THE U.S. IT’S 25%, AND
WHAT’S DOUBLE IMPORTANT ABOUT
THAT LIZ IS THAT THE NATIONAL
BRAND SUPPLIERS LIKE MY ALMA
MATER, PROCTOR AND GAMBLE AND
OTHERS HAVE BEEN IN MY
PROFESSIONAL VIEW DISCRIMINATING
AGAINST SUPERMARKET SHOPPERS AND
SUPERMARKET RETAILERS BY NOT
PASSING ALONG THE PRICE AND
PROMOTIONAL ALLOWANCES DURING
AND AFTER COVID THE WAY THEY DO
THE WHOLESALE CLUBS AND THE
SUPER CENTER OPERATORS, SO
IT’S IMPORTANT TO GIVE KROGER
AND ALBERTSONS THE LEVERAGE AND
SMALL RETAILERS THROUGH NATIONAL
GROCERS ASSOCIATION NEED SIMILAR
LEVERAGE AND THAT’S WHAT THE FT
C SHOULD BE LOOKING AT
RATHER THAN BLOCKING THIS MERGE
CHER IS WHAT THE STOCK MARKET IS
ANTICIPATING WITH BOTH COMPANIES
AND IT’S DOWN OVER 70% TODAY AS
YOU SAID.
LIZ: WE GOT RETAIL SALES TODAY.
WE’RE GOING INTO THE HOLIDAY
SEASON.
IS THERE ANY NAME OUT THERE THAT
YOU THINK IS BEST POSITIONED TO
ENDURE WHAT APPEARS TO BE AN
UNDERSTANDABLE SLOWDOWN, I
GET IT, BUT YOU KNOW, I
UNDERSTAND THAT AND THAT’S WHAT
THE FED WOULD LIKE TO SEE ,
PEOPLE STOPPING THE SPENDING, SO
THAT WE COULD SEE SOME PRICES
COME DOWN, BUT ANY NAMES OUT
THERE THAT YOU THINK CAN REALLY
ENDURE THIS?
>> LIZ, THE BEST IS BJ’S
WHOLESALE AND SINCE YOU AND I
RECOMMENDED IT TWO AND A HALF
YEARS AGO THE STOCKS DOUBLED BUT
THEY JUST GOT APPROVAL TO USE EB
T, ELECTRONIC BENEFIT
TRANSFER OF FOOD STAMPS FOR
ONLINE SALES.
THEIR GAS PRICES TEND TO BE THE
LOWEST SO THEY SAVE PEOPLE
MONEY ON GAS AND GROCERIES, THE
MEMBERSHIP FEE PAYS FOR
ITSELF IN LESS THAN A MONTH
AND YOU’VE GOT GREAT SPIRITUAL
AND SOCIETAL AND ENVIRONMENTAL
LEADERSHIP AT BJ’S WITH CHRIS
BALDWIN, BOB EDDIE, DAVID PICOT
AND TEAM AND ALSO,
THE ECONOMY PICKS UP NEXT YEAR,
AND THE GREAT TEAM AT TRACTOR
SUPPLY IS A WINNER TOO.
LIZ: BJ’S UP 24% OVER THE PAST
52 WEEKS.
BERT IT’S SO LOVELY TO SEE YOU
AND I WANT TO TAKE THIS MOMENT
TO THANK YOU, BURT, BECAUSE FROM
DAY ONE OF FOX BUSINESS, 15
YEARS AGO, YOU HAVE BEEN THERE.
YOU HAVE COME ON OUR AIR.
YOU HAVE EDUCATED OUR VIEWERS
ABOUT ALL THINGS RETAIL AND WE
DON’T FORGET OUR FRIENDS.
THANK YOU.
>> WELL, LIZ, GREAT TO BE PART
OF YOUR FANTASTIC TEAM HERE.