Kroger’s CEO blames price hikes on rising process costs

By Deborah Bloom and Jody Godoy

PORTLAND, Ore. (Reuters) – Kroger CEO Rodney McMullen blamed rising grocery prices on rising costs for retailers as he defended the grocery chain’s proposed $25 billion merger with rival Albertsons in a lawsuit Wednesday.

In a lawsuit in Portland, Ore., McMullen cited rising supplier costs, fuel prices and credit card transfer fees when the company’s attorney asked why the prices had gone up.

The US Federal Trade Commission and several states have sued in federal court to block the merger and are trying to show that the deal will lead to higher prices and reduce the bargaining power of union shop workers, ending the bitter rivalry between Kroger and Albertsons.

Rising food prices, which have become a hot political issue in the US presidential race, rose 25% between 2019 and 2023, faster than other consumer goods and services, US Department of Agriculture statistics showed.

“Absolutely not,” McMullen said when asked if Kroger would raise its prices after the merger. “We believe that over time, value will become more and more important, and you can’t price your items above the market.”

Kroger has argued it needs the increased size from the merger to compete with Walmart, the largest U.S. retailer, while Albertsons said if the deal falls through it may have to consider layoffs and store closings .

(Reporting by Deborah Bloom in Portland; Writing by Jody Godoy in New York; Editing by Richard Chang)