Introduction
The proposed merger between Kroger and Albertsons could have a significant impact on customers. The two companies are two of the largest grocery store chains in the United States, and the merger would create a massive grocery store conglomerate. While the merger could bring some benefits to customers, such as lower prices and more convenience, it could also lead to higher prices, fewer choices, and reduced competition. This article will explore the potential impacts of the merger on customers and discuss how it could hurt them.
Kroger-Albertsons Merger Could Hurt Customers
Kroger and Albertsons, two of the largest grocery store chains in the United States, are in talks to merge. The potential merger could have a major impact on customers, as it would create a grocery giant with more than 4,000 stores across the country.
The merger would combine Kroger’s 2,800 stores with Albertsons’ 1,800 stores, creating a grocery chain with more than $100 billion in annual sales. The combined company would be the second-largest grocery chain in the U.S., behind Walmart.
The merger could have a negative impact on customers, as it would reduce competition in the grocery market. With fewer competitors, prices could rise and customers could have fewer choices when it comes to where they shop.
The merger could also lead to job losses, as the combined company would likely look to reduce costs by cutting staff. This could have a negative impact on local economies, as the grocery industry is a major employer in many communities.
The potential merger is still in the early stages, and it is unclear if it will be approved by regulators. If it is approved, it could have a major impact on the grocery industry and customers.
As customers struggle to grapple with soaring food costs, and as inflation continues to rise, one massive supermarket merger threatens to do even more damage to our wallets.
Kroger announced earlier this month plans to purchase Albertsons in a $24.6 billion deal that would combine various chains throughout the United States, including Ralphs, Mariano’s, Fred Meyer, Safeway, and Vons. The mega-merger would give the company a total of about 5,000 stores throughout 48 states, accounting for about one-fifth of the grocery market in the United States, according to The Guardian.
RELATED: America’s Two Largest Grocery Chains Just Announced a Merger
But the big issue with a merger of this size is the concept of a monopoly. With fewer players in the grocery industry, prices could potentially grow unchecked, with customers having little choice but to pay them. A study by the Federal Trade Commission (FTC) confirms this, finding that mergers in highly concentrated markets frequently lead to price increases.
“I’m deeply concerned about the consumer choice aspects of this,” Christine Bartholomew, a law professor at the University of Buffalo who practiced antitrust and consumer protection law, told The Guardian.
Store closures are also another likely result of the merger, especially in neighborhoods that have both Albertsons and Krogers locations, as the companies are likely to consolidate their assets. This could lead to food desserts in areas where grocery options are scarce.
“Anticompetitive mergers have real impacts on everyday people,” said D.C. Attorney General Karl Racine, who is leading a group of state attorneys general calling for an investigation into the merger. “We’re deeply concerned about the level of concentration in essential industries, such as grocery stores. And we’re asking Albertsons to not proceed with the payout while we thoroughly assess whether this merger is anti-competitive, anti-consumer or anti-worker.”
Although Kroger’s and Albertsons’ boards approved the merger, states must also review and approve the deal—so it is still a long way from closing as expected in early 2024.