If protecting workers were a concern, it’s fair to say few if any big mergers would ever pass regulatory muster. That’s what makes the Federal Trade Commission’s latest case one to watch.

On Monday, the FTC sued to block supermarket giant Kroger’s proposed $25 billion acquisition of rival Albertsons, relying on a novel legal argument. The FTC as well as eight states plus Washington D.C. essentially argued that the increased leverage created by a combined Kroger-Albertsons could lead to reduced worker wages, diminished benefits, and deteriorating working conditions. 

Rewriting the Rules

“This marks a novel approach by the FTC, as it is the first instance in merger enforcement where the potential harm to workers has been cited as a reason to prevent a merger,” Daniel Hanley, senior legal analyst at the Open Markets Institute, wrote in an email to The Daily Upside. That harkens back to the agency’s recently updated merger guidelines, which now urge judges to consider impacts on markets upstream and downstream from a deal — such as harm to workers, suppliers, or contractors — as a valid reason to block a merger. And if that’s not sufficient, the FTC hopes good old-fashioned “harm to consumers” is reason enough:

• “Kroger’s acquisition of Albertsons would lead to additional grocery price hikes for everyday goods, further exacerbating the financial strain consumers across the country face today,” Henry Liu, director of the FTC’s Bureau of Competition, wrote in a statement. Food costs are eating up a higher portion of Americans’ income than they have in the past 30 years, according to a recent Wall Street Journal analysis.
• According to internal company documents seen by the FTC, one executive at Albertsons even candidly acknowledged the end result of an acquisition, writing “You are basically creating a monopoly in grocery with the merger.”

Concession Stand: In anticipation of regulatory action, Kroger and Albertsons had already proposed selling off some 400 store locations to Piggly Wiggly parent C&S Wholesale Grocers — a bid that the FTC in its statement chided as falling far short of mitigating the lost competition resulting from a merged company operating over 5,000 stores. “[Consolidation in the supermarket industry] has been going on for a long time,” Spencer Waller, Director of the Institute for Consumer Antitrust Studies and Professor at Loyola University Chicago School of Law, told The Daily Upside. “Particularly, Albertsons has bought other stores and the divestitures in the past have never been really sufficient to restore competition. I think the agencies are basically saying ‘No, enough’.”

It’s like Nina Simone says, Boeing: Nobody knows you when you’re down and out. 

Ryanair, previously one of the few airlines to strike an optimistic note about its relationship with Boeing, has suddenly turned hostile. Ryanair CEO Michael O’Leary said at a Friday press conference that the European budget airline is pursuing compensation from Boeing because it’s not delivering as many planes as promised, and Ryanair said Monday that the lack of Boeing aircraft would mean a 10% spike in summer airfare. 

No Longer BFFs

Boeing attracted the ire of multiple airlines after a tiny, barely-noticed snafu last month when a door blew off one of its 737 Max 9 aircraft. The subsequent regulatory headache, with the FAA temporarily grounding all 737 Max 9 planes, called the company’s overall quality control into question. Ryanair was an outlier, however, making it clear that it considered the plane door gaffe a one-off, and even going so far as to say that if other airlines canceled Boeing orders, it would be happy to snap them up.

Of course, buying up planes no one else wants can be a bargain opportunity — and now Ryanair may sense the chance to get more money out of the ongoing drama:

• O’Leary said Ryanair is pursuing compensation from Boeing because manufacturing problems have resulted in Boeing not delivering as many 737 Max 9 planes as promised ahead of the busy summer season. O’Leary attributed the manufacturing slowdown to Boeing having the FAA “crawling all over them,” per the BBC.
•  “Our growth has been constrained because at this point in time we don’t really know how many aircraft we are going to get,” O’Leary said, according to the Financial Times. “I think we will get some modest compensation out of Boeing. But our focus is not getting compensation out of Boeing, our focus is getting the bloody aeroplanes out of them,” he added.

O’Leary had other choice words for the situation at Boeing — we won’t repeat his exact words here, but they rhyme with “hit show.”

Executive Turbulence: Boeing is clearly starting to feel the heat from airline execs like O’Leary, as last week it ousted VP Ed Clark, the executive responsible for its manufacturing operation in Seattle. Clark is being replaced by another Boeing executive, Katie Ringgold, who was previously in charge of deliveries. At least she won’t have to deal with a bunch of angry airlines asking where their planes are anymore. Well, not immediately.

For Domino’s, a higher stock price is no longer a pie in the sky. 

The Michigan-based chain, known for its bargain pies, saw its stock jump nearly 6% on Monday after reporting rejuvenated quarterly domestic same-store sales, which is somewhat of a rarity among fast food businesses these days. 

I’m Not Loving It

Many companies in the sector have blamed inflated food prices, rising energy costs, and minimum wage bumps for driving recent menu price hikes. In the past two years, McDonald’s raised prices by roughly 20%, and in some parts of the country, a Big Mac combo — which includes the signature double burger, fries, and a drink — is setting customers back nearly $18. While the brand was able to coast on people willing to spend more for a while, those customers are beginning to cut back on their Mickey D’s visits and orders. 

Meanwhile, the ongoing conflicts in the Middle East, which have sparked boycotts and acts of vandalism, are denting international sales growth for McDonald’s, as well as for Starbucks and Yum Brands.

But Domino’s is faring better than its fellow greasy spoons:  

• While its international business is taking a hit like everyone else — international sales growth of just 0.1% was far below Bloomberg’s estimate of 3.2% — the home of the stuffed cheesy bread said domestic comparable sales grew 2.8% in Q4, beating analysts estimates of 2.2%.
• Domino’s said the growth resulted from its promotional deals, more people signing up for its loyalty program, expanded advertising, and finally partnering with third-party delivery services like Uber and Postmates.

Prices Go Up and Down: Wendy’s, which is already the most expensive fast food chain according to PriceListo, said Monday that it would introduce “Uber-style” surge pricing in 2025. Similar to how rides cost different amounts at different times of the day because of demand, so too will a Wendy’s Baconator or Frosty. Looks like congestion pricing doesn’t stop at 60th Street, as New Yorkers could expect to pay roughly $10 for just a cheeseburger at lunchtime.