American Stores Laments Delay in Lucky Merger

American Stores officials maintained Monday that grocery shoppers are suffering because of the protracted legal action that is barring the merger of Alpha Beta and Lucky Stores, the company’s two California grocery chains.

“I think the worst case is what we’ve got right now,” said Jonathan L. Scott, vice chairman and chief executive of the Salt Lake City-based company, the nation’s largest operator of food chains and drugstores.

By operating the chains separately, he said, the company is unable to take advantage of cost savings in advertising, distribution, warehousing and manufacturing that American Stores has said would be passed on to customers in the form of lower prices.

If allowed by the courts, the company intends to merge the two operations under the Lucky banner and adopt that company’s low-price policy.

“We’re prepared to lower shelf costs by approximately $50 million,” he told shareholders at the company’s annual meeting at Le Meridien Hotel in Newport Beach.

The statements reiterated a stance the company has held during its long battle with California Atty. Gen. John Van de Kamp, who last Sept. 1 sued to challenge the company’s purchase of Lucky on antitrust grounds.

Van de Kamp has contended that a merger of the two big chains would reduce competition and force prices up.

On March 31, a three-judge panel for the U.S. 9th Circuit Court of Appeals in San Francisco reversed a lower court’s preliminary injunction that prohibited the integration of the two chains. The Attorney General’s office immediately requested that the case be heard by an 11-judge panel of the court.

The case is still under consideration by the U.S. 9th Circuit Court.