Grocery Flash Call Legal Analysis (KR, ACI)
We are hosting a flash call tomorrow at 12:30 PM ET to review the FTC’s suit to block the proposed merger between Kroger and Albertsons.
The Federal Trade Commission has filed a lawsuit to prevent the proposed merger between Kroger and Albertsons. The FTC claims the largest supermarket merger in history is anti-competitive, leading to higher prices for millions of consumers. The lawsuit also claims that grocery store workers would suffer under the deal. The attorney generals from nine states are also joining the federal lawsuit.
Our call will review:
- The following steps and what to expect for timing.
- What are the critical factors in the case?
- What is the case the FTC is making?
- The stakes involved for the companies as well as the FTC.
- Will the divestments factor into the case?
- We will also take live questions.
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To view the webcast CLICK HERE. To add to your calendar CLICK HERE. |
Substituting chicken (PPC)
Pilgrim’s Pride reported Q4 EPS of $.59, above consensus expectations of $.43. Better margins drove the upside. The food service channel continued its trend of higher volumes and lower prices. Global demand for chicken was strong during the quarter, given the higher cost of other proteins. Lower corn prices were a tailwind and are expected to significantly reduce costs ($188M) in 2024.
Management said that beginning in the New Year, demand for white meat increased significantly and is well-positioned to other proteins. “The spread between chicken, beef, and pork are close to record levels, and we’re seeing a strong increase in the promotional activity by the retailers.” As for away from home, management said, “On the food service, we’re seeing some lower traffic and the consumer spending a little bit more at home.” Food substitution is very wide, which poses a risk for numerous companies as promotional intensity increases at retail.
