Grocery store merger process begins as Fred Meyer workers prepare for strike

A federal trial began this week to decide the fate of dozens of Portland grocery stores, including all Fred Meyer and Safeway stores.

Kroger Co., owner of the Fred Meyer chain, wants to buy Albertsons Companies Inc., owner of Safeway, for $25 billion. It would be the largest grocery merger ever. The Federal Trade Commission sued the grocery chains in a U.S. district court in February, arguing that the deal would reduce competition and drive up prices. A dozen states, including Oregon, joined the lawsuit or filed their own.

Albertsons and Kroger say they need to merge to compete with Costco, Walmart and Amazon's Whole Foods chain.

On Wednesday, August 28, the court will hear from Dan Clay, president of United Food & Commercial Workers Local 555, which represents 4,500 workers at Fred Meyer stores in the Portland area. The union supported the merger until earlier this month, when it changed its mind, claiming that Fred Meyer had failed to address “large wage disparities” at the Oregon and Washington stores in ongoing collective bargaining.

“This is a clear breach of contract,” said Sandy Humphrey, treasurer and secretary of UFCW Local 555, “and we are determined to hold them accountable and ensure they fulfill their obligations to our members.”

UFCW workers also voted to strike against unfair labor practices and are expected to walk out at 6 a.m. on Wednesday, August 28.

“Fred Meyer remains committed to investing in our employees and paying them competitive wages while ensuring our doors remain open and food remains affordable,” Fred Meyer President Todd Kammeyer said in a statement.

Cincinnati-based Kroger and Boise-based Albertsons together operate 5,000 stores in the U.S. and 176 in Oregon. To address antitrust concerns, Kroger and Albertsons have announced plans to sell 579 stores nationwide, including 62 grocery stores in Oregon, to New Hampshire-based C&S Wholesale Grocers.

Kroger has also pledged to cut grocery prices by $1 billion if the merger goes through.