U.S. News
Major Grocery Stores Propose Merger, Sparks Industry Reshaping
Clear Facts
- The proposed merger of Kroger and Albertsons, first announced in October 2022, is a $24.6 billion deal that will affect nearly a million store associates, thousands of storefronts, distribution centers, plants, pharmacies, and gas stations.
- The Kroger-Albertsons amalgamation has increased the total number of stores to be sold to 579, to alleviate antitrust worries, following negotiations with the Federal Trade Commission (FTC). This includes a range of Albertsons, Carrs, Safeways, and Vons stores, with no individual Kroger locations part of the sell-off.
- The FTC has voiced its opposition to the merger, even filing a lawsuit to halt the deal over concerns about its legality and skepticism about its potential to lower prices for consumers.
The long-anticipated merger between Kroger and Albertsons appears to be edging closer to becoming a reality. This $24.6 billion deal, first announced in October 2022, is set to significantly reshape the supermarket industry.
The merger is estimated to affect over 710,000 store associates and nearly 5,000 storefronts, along with 66 distribution centers, 52 manufacturing plants, 3,972 pharmacies, and 2,015 gas stations.
To address antitrust concerns, the two supermarket giants originally planned to divest around 375 stores. However, this number has since been increased to 579, following discussions with the Federal Trade Commission (FTC). The divestment includes many Albertsons, Carrs, Safeways, and Vons stores, while no individual Kroger locations are part of the sale.
The FTC has been outspoken about its opposition to the deal since its announcement. In February 2024, the consumer protection agency even filed a lawsuit to stop the merger from proceeding.
This lawsuit indicated that officials “doubted the legality of the deal and were skeptical of promises that it would lower prices for consumers.”
Despite the FTC’s resistance, Kroger and Albertsons have remained steadfast in their stance, arguing that the agency’s case has no merit in the current economic climate. They contend that the grocery industry today faces stiff competition from non-supermarket entities like Walmart, Costco, and Amazon.
“On Aug. 26, Kroger and Albertsons will appear before a U.S. district judge for a preliminary injunction determining whether the grocers can move forward with their merger.”
Regardless of the ongoing review by the FTC, Kroger and Albertsons are sticking to their timeline. They are in discussions to sell 579 stores to C&S Wholesale Grocers, which runs the Piggly Wiggly supermarket chain in the Midwest. The deal also includes six distribution centers and one dairy plant.
This significant deal will affect supermarket locations in 19 states. As consumers wait to see the outcome, it remains to be seen which local grocery store will be re-franchised under the C&S Wholesale Grocers banner.
Let us know what you think, please share your thoughts in the comments below.
Sher
July 12, 2024 at 6:38 pm
This merger will remove competition between grocery chains which will undoubtedly result in higher prices. Please prohibit this clear mistake.
Olde Lady
July 16, 2024 at 6:58 pm
All the stores I shop at are scheduled to be closed. Do not support this, won’t create lower prices for consumers. Why is this being allowed to continue?
AZMOM
July 16, 2024 at 9:01 pm
Ditto – they are scheduled to close four major grocery stores around my residence, which pretty much means I’ll have to do grocery shopping at Walmart (which is NOT a positive!). As far as I can tell, there are no guarantees that the closed stores will “re-open” under another name. This merger is NOT a good deal for consumers!
FRANK ALEXANDER
July 24, 2024 at 5:42 pm
Offered by someone who’s been in food retail for almost 50 years…if you have “four major grocery stores” (your words) near your residence, your marketing area is seriously over-saturated. Unless you live in a metro area of 600,000 people or more, three of those four stores are either marginal or operating in red ink. Businesses have no obligation to stay in business, operating in the red, just to cater to you. They’re obligated to their stockholders (the owners of the company) to operate at the best interest of the owners and that’s been protected by the Federal Trade Commission for well over 80 years now. It’s just plain common sense. If you don’t like the marketing demographics where you live – MOVE.
Sheryl
July 16, 2024 at 11:11 pm
This merger should never happen. Kroger has become a
monstrosity. The bigger they get the less they care about their decades long customers. Poor service, carry more and
more of their Kroger brands which
basically aren’t quality. Our choice of name brands keeps shrinking. Disgusting. Enough is enough. So not let this merger go through. It will only hurt the people
No competition anymore in Colorado. A disgustingly high place to live & this will only contribute to that.
Tom
July 16, 2024 at 11:43 pm
Anytime there’s a merger, it’s NOT for the customers=period!
FRANK ALEXANDER
July 24, 2024 at 5:54 pm
Blah, blah, blah. I heard this nonsense all the years I worked for A&P. Then Safeway took over being the king of the hill when their marketing model proved superior to that of A&P (based around the turn of the twentieth century, and barely updated by the 1980s). Now, Kroger’s marketing model has knocked Safeway off the top of the hill. If y’all don’t like Kroger, shop somewhere else. If y’all choose to live in an obscenely-expensive state such as Colorado, suck it up…or move to Wyoming or Nebraska. YOU determine the market. Maybe, even vote some conservatives into office to help return some sanity to that state.