Kroger to Lower Prices Following Merger with Albertsons Cos

Building on Its 20-Year Track Record of Enhancing Value Kroger will Lower Prices for More Customers, Consistent with Its Approach to Previous Mergers

CINCINNATI, Feb. 13, 2024 /PRNewswire/ -- The Kroger Co. (NYSE: KR) today shared additional insights about how the company lowered prices in previous mergers, bolstering its commitment to bring more consumers across America lower prices and more choices following its proposed merger with Albertsons Cos.

"We believe the way to be America's best grocer is to provide great value by consistently lowering prices and offering more choices. When we do this, more customers shop with us and buy more groceries, which allows us to reinvest in even lower prices, a better shopping experience, and higher wages," said Rodney McMullen, chairman and CEO of Kroger. "We know this model works because we've been doing it successfully for many years, and this is exactly what this merger will bring customers ? lower prices and more fresh, affordable choices."

This strategy is not new to Kroger. The retailer has invested to lower prices consistently since 2003, resulting in $5 billion in customer savings and providing more affordable products to families across America. Kroger offered an analysis that puts this significant investment into clearer context and includes additional details. Specifically, it demonstrates Kroger:

• Consistently lowered prices and improved the customer experience during previous mergers: Kroger invested more than $125 million to lower prices at Harris Teeter after its merger in 2014 and more than $100 million to lower prices at Roundy's after its merger in 2016. Additionally, Kroger invested $2.5 million and $2.4 million in capital per Harris Teeter and Roundy's store, respectively, to enhance the customer experience in the three years following each merger.
• Reduced profits to ensure groceries remained affordable for families across America: Kroger's ongoing work to lower prices in the last 20 years reduced its gross margin by 5%. Meanwhile, Amazon, Ahold Delhaize, Walmart and Dollar General have increased gross margins by 22%, 4%, 1% and 2%, respectively, during the same time period.
• Made clear, consistent commitments to lower prices and improve the customer experience post-merger: Kroger will invest $500 million to lower prices following the merger with Albertsons starting day one following the transaction close. Kroger will also invest $1.3 billion to improve Albertsons' stores following the merger, all to better serve customers.
• Will become more competitive and able to invest even more to support customers and over 700,000 associates by combining with Albertsons. Kroger's merger with Albertsons will allow it to attract and retain more customers by lowering prices, creating a more seamless and personalized experience and expanding its selection of fresh, affordable food. By doing so, Kroger expects to grow revenues and drive additional investments in pricing and store improvements as well as wages and benefits.

To learn more about the proposed merger between Kroger and Albertsons Cos visit here.

About Kroger
At The Kroger Co. (NYSE: KR), we are dedicated to our Purpose: to Feed the Human Spirittm. We are, across our family of companies nearly half a million associates who serve over eleven million customers daily through a seamless digital shopping experience and retail food stores under a variety of banner names, serving America through food inspiration and uplift, and creating #ZeroHungerZeroWaste communities by 2025. To learn more about us, visit our newsroom and investor relations site.

Forward-Looking Statements 
This press release contains certain statements that constitute "forward-looking statements" within the meaning of federal securities laws, including statements regarding the effects of the proposed merger with Albertsons Companies. These statements are based on the assumptions and beliefs of Kroger management in light of the information currently available to them. Such statements are indicated by words or phrases such as "believe," "expects," "strategy," and "will." Various uncertainties and other factors could cause actual results to differ materially from those contained in the forward-looking statements. These include the specific risk factors identified in "Risk Factors" in Kroger's annual report on Form 10-K for the last fiscal year and any subsequent filings, as well as the following: the expected timing and likelihood of completion of the proposed transaction and divestiture plan, including the timing, receipt and terms and conditions of any required governmental and regulatory clearance of the proposed transaction and divestiture plan; the impact of the proposed divestiture plan; the occurrence of any event, change or other circumstances that could give rise to the termination of the merger agreement or divestiture agreement; the outcome of any legal proceedings that have been instituted and may in the future be instituted against the parties and others following announcement of the merger agreement and proposed transaction or divestiture plan; the inability to consummate the proposed transaction or divestiture plan due to the failure to satisfy other conditions to complete the proposed transaction or divestiture plan; risks that the proposed transaction or divestiture plan disrupts our current plans and operations; the ability to identify and recognize, including on the expected timeline, the anticipated total shareholder return ("TSR"), revenue and EBITDA expectations; the amount of the costs, fees, expenses and charges related to the proposed transaction and divestiture plan; the risk that transaction and/or integration costs are greater than expected, including as a result of conditions regulators put on any approvals of the transaction; the potential effect of the announcement and/or consummation of the proposed transaction or divestiture plan on relationships, including with associates, suppliers and competitors; our ability to maintain an investment grade credit rating; the risk that management's attention is diverted from other matters; risks related to the potential effect of general economic, political and market factors, including changes in the financial markets as a result of inflation or measures implemented to address inflation, and any epidemic, pandemic or disease outbreaks, on Kroger, Albertsons or the proposed transaction or divestiture plan; the risk of adverse effects on the market price of our or Albertsons's securities or on Albertsons's or the Company's operating results for any reason; the occurrence of any event, change or other circumstances that could give rise to the termination of the merger agreement or divestiture agreement; and other risks described in our filings with the SEC.  The ability of Kroger to achieve the goals for the proposed transaction may also be affected by our ability to manage the factors identified above. The forward-looking statements by Kroger included in this press release speak only as of the date the statements were made. Kroger assumes no obligation to update the information contained herein unless required by applicable law. Please refer to Kroger's reports and filings with the Securities and Exchange Commission for a further discussion of these risks and uncertainties.

SOURCE The Kroger Co.