On the second day of the trial over Colorado’s attempts to block the Kroger-Albertsons merger, the state’s legal team questioned Kroger’s executives on a pricing strategy implemented in several mountain
The zone was established to pass on rising costs by raising prices in select stores with less risk of losing sales volume from competition, Groff confirmed.
“And yes, we look for areas that had less competition, and we selected those stores for that reason,” he said, adding it didn’t mean those stores had no competition at all.
Biller pointed out the “no-comp stores” have no Safeway stores nearby, which Groff confirmed, and there are City Market stores in Vail and Gunnison with Safeway that also have high costs to operate but were not included in the zone.
The “no-comp” stores on the Western Slope saw revenues grow faster and yielded gross margins more than double of more competitive Kroger stores, Groff confirmed.
It was considered a successful program, Groff testified, because it raised prices without losing customers and covering Kroger’s rising costs.
“And yes, we look for areas that had less competition, and we selected those stores for that reason,” he said, adding it didn’t mean those stores had no competition at all.
So, very literally monopolistic practices. Nice.