Throw it in the bag
Grocery gamesmanship
Good morning, my fellow avocado-squeezers. This is your Stock Market Rundown for August 21st, 2023. Thanks for joining me. Let’s dig in:
TODAY’S TOP STORY: FILLING UP THE CART 🛒
How do you compete against a behemoth? Get as big as you can. Grocery store chain Kroger is trying to beef up to beat Walmart.
Founded in 1883 when Barney Kroger invested his life savings to open a grocery store in downtown Cincinnati, The Kroger Company now has more than 2,700 locations. It employs more than four hundred thousand people, all of whom would appreciate it if you would return your shopping cart.
(Side note: Barney Kroger was the original grocery G. Way before Uber Eats, he ran a fleet of 75 Ford Model Ts doing grocery delivery. And he was a philanthropist: he donated five tigers to the Cincinnati Zoo. Obviously, Barney was the Mike Tyson of the 19th century.)
Last October, Kroger announced a deal to acquire Albertsons. Analysts say the tie-up is Kroger’s “last, best, and final chance” to compete against big daddy Walmart, which controls a quarter of the overall US grocery market.
But the FTC still has to approve the deal. Officials from seven states wrote a letter to regulators urging them to block the merger on antitrust grounds. A Kroger spokesman shot back: “The only parties who would benefit if this merger is not completed are large, non-unionized competitors such as Walmart and Amazon."
Yes, Kroger and Albertsons have the bragging rights of being union shops, but maybe not for long if they eliminate human workers. Kroger uses robots in their fulfillment centers, and just launched a pilot store that is “all self checkout”, with no cashiers.
Personally, I expect a discount if I have to do the extra work of scanning my own box of Wheaties. Hey, maybe next they’ll figure out how to get customers to restock cans of tuna, and mop up smashed jars of tomato sauce. Cleanup on aisle five.
SO WHAT ELSE IS GOING ON?
Momentum, mo’ problems: trend-following hedge funds are rushing to put risk on thanks to low vol and strong markets, flipping from short equities to long.
Make her engagement dreams come true at a third of the price. Lab-grown diamond sales were up 38% last year, as more shoppers opted for synthetic rocks over those ripped from the belly of Mother Earth.
Efficient market, my ass: a Vietnamese electric vehicle manufacturer went public at a valuation higher than Ford and GM combined. Please tell me their cars can fly, because that’s the only way this valuation makes sense.
Speaking of Big Auto, the United Auto Workers union will vote next week on authorizing strikes at Ford and GM, which could weigh on the stocks. The union president just streamed himself live on Facebook throwing a management proposal in a garbage can, so negotiations may drag on a while.
Robotaxis are roving the streets of San Francisco, despite residents’ skepticism of the “driverless death machines”. Imagine: a baby born today will never have to learn to parallel park.
That’s all for today—see you first thing tomorrow. Yours in capitalism, The Axe