Market consolidation is, and always has been, a pillar of each company’s business strategy. The deal should be blocked by antitrust regulators.Ī History of Acquisitions and ConsolidationĪlbertsons and Kroger became national supermarket chains through a series of acquisitions across the country. Given the implications of the Kroger-Albertsons merger on food prices, consumer choice, supply chain fragility, and the competitive landscape, the clear harms outweigh any potential benefits touted by the companies. With these concerns in mind, the merger is facing opposition from the country’s largest private-sector union, United Food and Commercial Workers International (UFCW) a number of public interest groups and state and federal regulators. However, the companies continue to argue to lawmakers that the merger is not going to harm consumers or workers, but this position clashes with past trends that indicate that grocery mergers lead to price increases for shoppers, a ripple effect of consolidation in the food supply chain, and store closures that can ultimately mean more food deserts. Despite attempts by the Washington state attorney general to legally block the dividend, this payout was made using $2.5 billion in cash and $1.5 billion in debt, which ultimately worsened the financial standing of Albertsons. Upon announcing the deal, Albertsons, which had 78% ownership by private equity firms, paid out a hefty $4 billion dividend, with $1 billion going directly to Cerberus Capital Management. The merger, however, already faces significant opposition. Both Kroger and Albertsons, along with others, have been using that rationale to defend every supermarket deal for the past 20-plus years. Still, Kroger and Albertsons claim their deal is the only way to compete with the likes of Walmart. And when seemingly significant divestments were required, those remedies were later proven insufficient or ineffective. Store closures mean layoffs, food deserts, and more negotiating power in the hands of the few national chains, harming consumers, food suppliers, farmers and ranchers, independent grocery stores, and the grocery workers that remain.ĭespite clear and consistent evidence of these broader repercussions, regulators over the past decade have waved through grocery mergers with few enforcement limitations. The Kroger-Albertsons deal is the latest dangerous culmination of this trend.īut the decreasing number of grocery stores is not just about fewer places to shop. has one-third fewer stores than it did 25 years ago, so every major grocery merger leads to an even more concentrated market. As grocery brands consolidate and no longer face competitive pressures to provide better services at convenient locations, they often close stores. Over the past three decades, there has been a substantial rise in consolidation within the food retail sector at every level: national, state, metro area, and county. This deal is far from the first major grocery store merger. Albertsons has an equally extensive network of around 2,200 stores nationwide, with a number of subsidiaries including Safeway, Vons, Jewel-Osco, Shaw’s, and Star Market. The company also owns several subsidiaries, including Harris Teeter, King Soopers, and Smith’s. Kroger, one of the largest supermarket chains in the United States, operates approximately 2,750 grocery stores in 35 states across the country, under various brand names such as Kroger, Ralphs, and Fred Meyer. The proposed deal is a turning point in the grocery retail industry, as it would combine the second- and fourth-largest grocers in the country, each of which has an extensive geographical footprint and dozens of regional subsidiaries. In October 2022, Kroger announced a $24.6 billion deal to acquire Albertsons.
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