The highly anticipated Kroger/Albertsons merger decision has finally been announced. In most circles, the feeling was the merger would happen. Most were surprised when word came out last week that the deal had been killed. Many CP companies had been planning how they would restructure their organizations and respond to the new behemoth organization across their sales, category management and supply chain organizations.

So now, what should CP organizations do following this decision?  Do you merely go back to business as usual or is this still an opportunity to rethink how you are serving these two massive grocery establishments now and into the future? For many, they had been playing out different scenarios for how they would staff, support, and manage everything from trade spend to retail media and category management. There is an opportunity to realign your objectives, resourcing and prioritization of your customers both in the short and long term.  Here are a few considerations for each as you think about the next moves for your organization.

Kroger-Albertsons Merger Failure Short-Term Considerations

Many organizations had A and B scenarios ready to go based on whether the merger was approved.  Most of these options centered around sales staffing needs, consolidated planning for trade, shopper and retail media and how those retailers would be served by category management and other critical teams. Now that we know the merger will not happen, we encourage manufacturers to use this as an opportunity to consider how you will continue to optimize your business with these 2 mega companies as well as other key customers.

Over time, have you become over or under invested with these customers?  Now is a great time to right size investments such as trade, shopper and retail media while also evaluating pricing tiers and promotional guardrails.  Understanding the efficacy of this work and optimizing spend is critical.  It is also an opportunity to give a second look at other areas like category leadership, supply chain management and innovation pathways.

Long Term Considerations

Now that we know Kroger and Albertsons will remain separate organizations with different strategies, results and expectations, it is a good time to start thinking more broadly about how you focus limited resources against the customers and categories you play in.  How do Kroger and Albertsons fit into your long-term strategies to drive value and what investments do you make in terms of human resources, trade spend, and other levers of influence.

Many organizations have a segmentation in place for customers and categories but often it can become outdated and is not renewed on a regular basis. Using this as an inspiration, start off the new year with a new look at which customers are critical strategic partners, which might be more tactical or transactional and right size your structure and resources to be aligned to that segmentation.

Reviewing and renewing your customer and category segmentation with your eyes on the future will allow you to remain nimble as we know other mergers will likely be coming. If you are interested in thinking about the best steps for you and your organization to take following this announcement, reach out, we’d love to chat with you.  

Contributions by Kathy Petruzzelli