Two main U.S. supermarkets, Kroger and Albertsons, have been in search of to mix forces after their boards reached a unanimous all-cash merger settlement, first introduced in October 2022.

However, the potential $24.6 billion deal has encountered one other roadblock, because the U.S. authorities requested a preliminary injunction to dam the merger. In response, Kroger CEO Rodney McMullen pledged to chop costs by $1 billion if the merger goes by way of.

“The day that we merge is the day that we will begin lowering prices,” McMullen stated on Wednesday whereas testifying throughout a federal court docket listening to in Portland, Oregon.

McMullen additionally famous that the merger would permit the corporate to decrease costs and higher compete with bigger retailers like Walmart, Amazon, and Costco. If mixed, Albertsons and Kroger would management round 13% of U.S. grocery gross sales, nonetheless lower than Walmart’s practically 22% market share.

When requested if Kroger would elevate costs after the merger, he replied, “Absolutely not. We believe over time, value will be increasingly important, and you can’t price your items above the market.”

Kroger and Albertsons first proposed the merger in October 2022, after Kroger agreed to buy Albertsons. The Federal Trade Commission sued earlier this yr to dam the deal, alleging that the merger would remove competitors and lift grocery costs amid already excessive meals value inflation.

In his latest testimony, McMullen cited rising provider prices, gasoline costs, and bank card swipe charges when requested by the corporate’s lawyer why costs have elevated.

In an announcement on the time of the preliminary proposal, McMullen stated, “Albertsons Cos. brings a complementary footprint and operates in several parts of the country with very few or no Kroger stores. This merger advances our commitment to building a more equitable and sustainable food system by expanding our footprint into new geographies to serve more of America with fresh and affordable food and accelerates our position as a more compelling alternative to larger and non-union competitors.”

Kroger additionally said in its information launch, “At a time when people are increasingly shopping for groceries and eating at home, Kroger and Albertsons Cos. will be better positioned to relieve the inflationary pressures facing shoppers with a combined portfolio of approximately 34,000 total private label products across premium, natural and organic, and opening price point brands.”