Kroger has promised to invest $500 million to lower prices as soon as the deal closes.
Kroger made 1.8 billion last year after expenses, so investing 500 million is a good gesture of faith but, I think that it should be required to be repeated yearly if they wish to make it as a condition of the merger, 500 million while likely wouldn’t do much prices wise, wouldn’t even be helpful if they aren’t doing it past the first year anyway
It’s such a backwards way of doing it though. If they’re going to invest that much, that means they need to make a lot of money to cover for it, so they’ll have to keep prices where they are until they get the money, then they’ll make a show of spending it to lower prices, which really means they’re paying the salaries of business analysts who will come up with ideas. Once they’ve spent $500m coming up with ideas, their obligation will be fulfilled, and they won’t have to actually act on any of those price-lowering ideas.
Instead they could just make $500m less in revenue by directly lowering prices immediately.
But then they can’t brag about all the good money they spent and will instead whine about how hard up they are, so we’ll be stuck with high prices and no relief.
Kroger made 1.8 billion last year after expenses, so investing 500 million is a good gesture of faith but, I think that it should be required to be repeated yearly if they wish to make it as a condition of the merger, 500 million while likely wouldn’t do much prices wise, wouldn’t even be helpful if they aren’t doing it past the first year anyway
It’s such a backwards way of doing it though. If they’re going to invest that much, that means they need to make a lot of money to cover for it, so they’ll have to keep prices where they are until they get the money, then they’ll make a show of spending it to lower prices, which really means they’re paying the salaries of business analysts who will come up with ideas. Once they’ve spent $500m coming up with ideas, their obligation will be fulfilled, and they won’t have to actually act on any of those price-lowering ideas.
Instead they could just make $500m less in revenue by directly lowering prices immediately.
But then they can’t brag about all the good money they spent and will instead whine about how hard up they are, so we’ll be stuck with high prices and no relief.