Mountain towns hope Albertsons merger brings stable prices
Amanda Pampuro
CARBONDALE, Colo. (CN) — At $3.69 a gallon, milk is 30 cents cheaper at Kroger’s Denver stores than in mountainous Vail, or down valley in Carbondale. But deli meat and cheese costs $2 more per pound in Vail, which only stocks premium Boar’s Head and doesn’t have the store brand on hand. At $1.99 a head, however, iceberg lettuce costs the same at grocery stores up and down Colorado's I-70 corridor.
Grocery prices have been a major hinge in the state's case against the proposed $24.6 billion merger between supermarket giants Kroger and Albertsons. The supermarkets argued in the trial that began Monday that the merger will benefit both shoppers and employees, and that it won't create an anticompetitive market or raise prices, particularly in isolated mountain towns.
Comparing the cost of milk and eggs in early fall, as well as typical sandwich ingredients — bread, ham, cheese, lettuce and tomatoes — Courthouse News found more commonalities than differences between three different Krogers, with the grocery bill adding up to about $39.
In one of Kroger’s “no comp stores” in Carbondale, home to 21,000 people living in the Roaring Fork Valley, 170 miles west of Denver, some shoppers are skeptical of the merger.
“I don't really feel comfortable about any mergers like that,” said a man who goes by Mack, and had just purchased a bag of shredded cheese from Carbondale’s City Market. “It just seems like consolidation, instead of a competitive market. If they're the only ones in town who can give you groceries, who are you else you're gonna go to?”
Other Kroger customers hope the business deal might generate more supply chain stability.
“It drives me crazy with City Market, because sometimes they won't have anything here, but they'll have it in El Jebel or in Glenwood Springs, but that's even further away,” said Terry Langley, who drove into Carbondale for candy corn that had been advertised on sale, only to find the store had run out. Driving to the next City Market in El Jebel would add another 20 minutes each way.
Kroger, which owns 2,719 grocery stores nationwide, announced their plan in October 2022 to purchase 2,271 Albertsons stores. In Colorado, Kroger’s King Soopers and City Market stores dominate the landscape alongside Albertsons’ Safeway and Walmart.
Colorado Attorney General Phil Weiser sued Kroger and Albertsons on Feb. 14 arguing a proposed merger would stifle competition and raise prices. In July, Second Judicial District Judge Andrew Luxen granted a temporary injunction halting the deal pending the outcome of this month’s bench trial.
Ninety miles west of Denver, Vail is home to about 4,000 year-round residents and attracts an average 2.8 million visitors every year, more than half of whom come to ski.
There, 8,000 feet above sea level, Kroger’s City Market fiercely competes with an Albertson’s Safeway located just across the parking lot. Some customers prefer Kroger’s customer service, while others say Safeway has better payment options.
“If this store is any indication, then I think Kroger does a much better job with workforce management,” reflected John, who asked that his last name not be used. John said he prefers the friendly staff at City Market, and ventures to Safeway only to purchase a specific brand of baking sugar.
Chris Paradise, on the other hand, chooses Safeway where he can use Apple Pay.
“Walmart won't accept Apple Pay because they do their own little application, and City Market wants you to use their app. For the consumer, it's not convenient,” Paradise said. On average, he estimated he spends $1 more for Yerba Mate tea in Vail than when he’s in Denver. In all however, he feels resigned to the fact that prices just go up.
“You gotta eat, so it is what it is, you're gonna pay what you're gonna pay,” he said.
A lone strip mall separates Vail’s feuding foodies with a hardware store, a real estate broker and a laundromat. Inside the laundromat, Eric Solis lifted great white baskets piled two feet high with clothes.
“Everything's expensive,” said Solis, who patrons the Walmart 10 minutes away in Avon, which is cheaper and closer to his home.
In opening statements of trial on Monday, Assistant Attorney General Arthur Biller, used eight isolated City Market stores as a case study to show that mountain town residents pay about 10% more for groceries compared to Coloradans in urban areas where Kroger faces more competition.
“This is real, not hypothetical evidence that shows supermarket monopolists can raise prices,” Biller argued. “It offers us a window into what the market would look like post-merger.”
Kroger’s attorney, Matt Wolf, pushed back on the narrative of price gouging, arguing some location’s higher prices account for higher business costs.
“For each of these stores in the mountains, the costs to get goods there is higher, and it’s not just higher for Kroger stores, the costs are higher for all the stores there,” Wolf argued.
Still, many accept the higher cost of living as the tradeoff of living closer to the things they love to do. Standing in sunny Carbondale, a seasoned ski bum named Richard pointed south to Capitol Peak rising off the Elk Mountains.
“I got four huge mountains within a 40-minute commute. That’s hard to beat,” Richard said. “You pick: mountain biking, rock climbing, water rafting, skiing.”