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Kroger and Albertsons have decided to merge. The deal would be almost $25 billion and one of the biggest in US retail history. Kroger is the 5^th largest retailer and Albertsons is the 10^th largest retailer. Both companies have countless chains and impact a total of 85 million households. Some examples of the chains are: Safeway, Vons, Harris Teeth and Fred Meyer. The reason for the merger is because both Kroger and Albertsons employ mostly union workforces and they want to become competitive against non-union companies (Walmart, Amazon, Costco). An added pressure is from Aldi, a fast-growing German discount supermarket chain. However, this deal is not set in stone, because is faced with criticism from regulators.

The merge means lower grocery prices, more store brands and more small stores closing. To lower prices, Kroger and Albertsons will use the $500 million in cost savings from the deal and invest $1.3 billion into Albertsons. Albertsons typically have higher prices in relation to Kroger and other grocers. Antitrust advocates say that the merger will increase prices, because there is less competition. Kroger and Albertsons both have their own food brands, because it is more profitable. Kroger and Albertsons will close stores in areas where they are overlapping. Analysts say that small grocers and mom-and-pop stores are likely to close. Stacy Mitchell, the co-director at the Institute for Local Self-Reliance, a research and advocacy organization said, “This deal would almost certainly put more rural towns and Black and Latino neighborhoods in cities at risk of becoming ‘food deserts’ as more local grocers are driven out of business.” The five biggest grocers (Walmart, Kroger, Costco, Ahold Delhaize and Amazon) control about fifty percent of the market. The merger “accelerates the ongoing consolidation of the sector,” said UBS retail analyst Michael Lasser.

Source: https://www.cnn.com/2022/10/17/business/kroger-albertsons-merger-groceries/index.html