Rising costs on everything from the price of fuel to credit card swipe fees have driven the skyrocketing cost of food in grocery stores, Kroger CEO Rodney McMullen (pictured) said in court on Wednesday in the Kroger, Albertsons antitrust merger trial in Portland, Oregon. According to a Supermarket News report, McMullen took the stand in the case brought by the Federal Trade Commission and nine attorneys general that aims to block Kroger’s $24.6 billion acquisition of Albertsons. The trial began on Aug. 26 and is expected to end on Sept. 13.
Reuters reported that McMullen said Kroger would “absolutely not” raise prices if the merger is approved. “We believe over time, value will be increasingly important and you can’t price your items above the market,” McMullen said in court. Rising costs have been the counterargument to the FTC’s accusations that Kroger, the country’s largest pure-play grocer, gouged consumers on items like eggs and milk. “Egg prices in July 2024 were 19.1% higher than those in July 2023 but still well below peak prices in January 2023. Egg prices are predicted to increase by 2.4% in 2024, with a prediction interval of -2.8 to 8.5%. This wide prediction interval reflects the volatility in retail egg prices,” according to the USDA report. Kroger’s attorney, Matthew Wolf, argued, “If you sell more stuff, your hourly wages go up, your costs go up, your costs of your employees go up. All of those are real costs that really decrease your profits.”
FTC Deputy Chief Trial Counsel Susan Musser argued in opening statements that head-to-head competition between Kroger and Albertsons will keep prices low, calling Kroger’s guarantees to lower prices “unenforceable promises. These promises need to be weighed against the competition that is already happening between these two companies,” she said.