Arizona Attorney General, Cochise County residents raise concerns about Kroger and Albertsons merger

This article has been updated as of 9 a.m. July 28 to include a statement from a Kroger spokesperson.

Food is at the center of life, and often, where we get our food becomes not just a part of daily routine, but a central part of the community that provides employment, access to healthy food and medications via their in-house pharmacies. But as the Kroger-Albertsons merger agreement approaches completion in early 2024, residents in Cochise County raise concern about potential store closures, higher food costs and staff cuts. The merger will impact major chain grocery stores Safeway and Fry's.

Arizona Attorney General Kris Mayes visited Sierra Vista Wednesday to hear residents’ concerns while she deliberates the possibility of filing a lawsuit against the merger through a potential violation of the state’s antitrust laws.

Sierra Vista resident Rebecca Smith said her main concern surrounds lack of accountability when competition goes away.

“When you remove options, you remove competition, you remove accountability," said Smith Wednesday. "There’s no reason why prices couldn’t keep going up if you’re the only grocery store in the area.”

Safeway — which merged with Albertsons in 2014 according to the U.S. Securities and Exchange Commission — has four stores in Cochise County: Bisbee, Sierra Vista, Benson and Willcox. Kroger, which owns Fry’s, only has one store in Cochise County — which is in Sierra Vista.

Sierra Vista Mayor Clea McCaa said he’s against the merger agreement, warning if the Sierra Vista Safeway were to close as a result of the merge, it would disproportionately affect access to food for the city’s residents, including the majority of the city’s low income residents on the West End.

“And speaking for our outline — like Elfrida, Sunsites, Pearce, Sun City, Hereford — they will have no option for a grocery store,” said McCaa.

Carolyn Umphrey, Sierra Vista's Mayor Pro Tem, said that while there is a local food co-op on the West End, it doesn't provide the necessary goods at the same scale of a chain grocer.

When asked by Sierra Vista resident Dan Luebcke if any stores will close as a result of the merger, Mayes said that Kroger and Albertsons have not confirmed that with her office.

"They have not been open with us, or anyone else, about stores they intend to close," answered Mayes. The Kroger company has said on their website that they will not close any stores or lay off any front line associates as a result of the merger.

"Our proposed merger with Albertsons will bring meaningful, measurable benefits to our customers, our associates and the communities we serve," A spokesperson for Kroger wrote in an email to AZPM Friday morning. "As we have in past mergers, we will hold ourselves accountable to our customer commitments, including investing $500 million to lower prices and offering a broader selection of fresh, affordable products through an expanded Our Brands portfolio. Kroger has a long-standing commitment to supporting our associates and we will invest an additional $1 billion to raise wages and our comprehensive, industry-leading benefits starting on day one following close. Kroger will not lay off any frontline associates or close any stores, distribution centers or manufacturing facilities as a result of this merger."

Cesar Escobedo, who’s an employee from the Bisbee Safeway, raised concerns about fighting for his contract amid the merger deal. He said before Safeway merged with Albertsons, the Safeway in Douglas closed. The Safeway in Bisbee has around 120 employees and the Fry’s store in Sierra Vista has close to 200 employees.

Another concern raised was about having pharmacies who accept TRICARE insurance, which covers active-duty military members and their families. Jocelyn Cruces, who works in the pharmacy in the Bisbee Safeway, said that they get a lot of Douglas residents who come to the that pharmacy because they take TRICARE insurance. The only other pharmacy in Douglas that takes TRICARE is Walmart.

“But they have to wait for their prescriptions for two days," Cruces said. “80% of our co-workers at Safeway live in Douglas. We have to drive everyday, 30 miles. So, what would happen if they closed the Safeway?”

While Mayes has yet to make a decision whether or not to sue, she says that the window of opportunity is closing, as the consummation of the merger cannot be undone. She closed by saying that she will make a decision on how to proceed before the end of the year. Mayes said that she's not the only state Attorney General who's investigating the merge deal, as she said the Attorneys General of Colorado, Washington State and California are also investigating the matter.

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