Jim Cramer on Tesla and Other Stocks

7. The Kroger Co. (NYSE:KR)

Number of Hedge Fund Holders: 46

When a caller mentioned The Kroger Co.’s (NYSE:KR) merger, Cramer said:

“With Albertsons, I think it’s better because they gotta go up against Costco and Walmart and Amazon. Without it, they still do well but frankly… Look, this administration, I think they’ll hold this deal up from now until, I don’t know, this thing’s tapped out.”

Kroger (NYSE:KR) is a prominent food and drug retailer in the United States, operating a diverse range of store formats, including combination food and drug stores, multi-department stores, marketplace locations, and price impact warehouses. In October 2022, the company announced plans to merge with Albertsons, another leading grocery chain in the U.S. Valued at $24.6 billion, this merger seeks to improve pricing power by increasing leverage with suppliers and allowing the two companies to consolidate their store brands.

The merger is likely to strengthen their ability to compete against larger rivals in the grocery market. However, the proposal has faced scrutiny from antitrust regulators, who express concerns that the merger could reduce competition, potentially leading to higher prices and diminished quality of service, as well as lower wages and benefits for workers.

To address these regulatory concerns, Kroger (NYSE:KR) and Albertsons have agreed to divest 579 overlapping stores if the merger is approved. C&S Wholesale Grocers, a supplier to independent supermarkets based in New Hampshire, would acquire these stores. However, the legal proceedings are still ongoing.