The Briefing Room
General Category => National/Breaking News => Topic started by: libertybele on December 01, 2022, 10:14:43 pm
-
The Two Largest US Grocery Stores Are Set to Merge. Will Grocery Prices Creep Up?
Higher prices along grocery store aisles have become impossible to ignore. Whether it’s dairy (15.5% more expensive than last year) or cereal and bakery products (up nearly 16%), food prices across the board have skyrocketed, according to the US Bureau of Labor Statistics’ October consumer price index. Now government officials are worried that groceries will get even more expensive, as the two largest supermarket chains in the US plan a historic merger.
Kroger announced in October that it would merge with Albertsons Companies, Inc., in a nearly $25 billion deal that is aimed at making the company more competitive with other giants like Walmart and Costco. The proposed merger would combine the first and second largest supermarket chains in the US, and would allow the new company to operate nearly 5,000 stores across 48 states and the District of Columbia. This combined presence, experts say, would serve 85 million households, accounting for approximately 13% of the market. The merger comes just years after Albertsons bought out Safeway for $9 billion in 2014—a deal which, despite FTC intervention, ended up driving down competition for the chain.
It was a win for Albertsons. But it may have been a loss for consumers. Studies from both 2008 and 2012 note that grocery mergers have historically resulted in increased prices for shoppers. As such, in a November 21 letter, members of Congress wrote to the chairwoman of the Federal Trade Commission, expressing concerns that the merger would harm consumers, workers, and other small businesses by stifling competition. The letter urged the Federal Trade Commission to “closely evaluate” the acquisition to determine whether it violates established antitrust laws.
The number of grocery stores has declined by roughly 30% between 1994 and 2019, according to a report from consumer advocacy group Food & Water Watch. The same report notes that among grocery retailers, Walmart claims a nearly 35% market share, while Kroger takes 13.9%, Costco 12.2%, and Albertsons 8.1%. According to these numbers, the proposed Kroger and Albertsons merger would dominate approximately 22% of the grocery market.
So what’s at stake if the two supermarket giants merge? In past mergers, prices for consumers have gone up as much as 7%. The letter to the FTC also argues that the buying power of the grocery giant could drive small- and medium-sized grocers out of business, and wages for staff could suffer in the merger’s restructuring. Kroger has a less than stellar track record when it comes to the fair payment of its employees; Kroger CEO Rodney McMullen took some heat in 2021 after it was revealed that he earned 909 times that of the median worker.
“We are concerned that Kroger’s proposed acquisition of Albertsons could result in undue market concentration,” the letter from government officials reads. “As a result, the combined company would be free to raise prices for consumers.” ...............
https://www.yahoo.com/lifestyle/two-largest-us-grocery-stores-163000093.html
-
When used to have an Albertson's in the area years and years ago and they went out of business. :shrug:
-
When used to have an Albertson's in the area years and years ago and they went out of business. :shrug:
Albertson's bought United Supermarket a few years back now a merger with Kroger....they'll be HUGE. Thank heavens for HEB.
-
I've got a Ralphs/kroger and an Albertsons within a mile of each other, since the Albertsons is smaller I would be happy if it got closed and Walmart put a neighborhood grocery store in it's place.
-
I've got a Ralphs/kroger and an Albertsons within a mile of each other, since the Albertsons is smaller I would be happy if it got closed and Walmart put a neighborhood grocery store in it's place.
Our neighborhood Walmart has gone downhill. Few cashiers, mostly serve yourself and it could use some cleaning. Prices are ok, some grocery items are cheaper at Target.
-
Our neighborhood Walmart has gone downhill. Few cashiers, mostly serve yourself and it could use some cleaning. Prices are ok, some grocery items are cheaper at Target.
Stocking has been an issue at the Walmart but biggest issue is that the grocery one is in a less than nice neighborhood and everything like razors, deodorants, baby formula and other smalls are locked up. I would like to shop in my neighborhood which is much better and not be made to feel like a freakin thief. I like the Ralphs but it's nice to get some things at better prices, I want that option near by and Albertsons/Vons can be more expensive than Ralphs.
-
The acquisition should be blocked.
-
Kamaji:
"The acquisition should be blocked."
I agree.
We need to preserve a level of competition in the grocery business.
-
Kamaji:
"The acquisition should be blocked."
I agree.
We need to preserve a level of competition in the grocery business.
The acquisition should be blocked by whom??
-
The acquisition should be blocked by whom??
The FTC, under Hart-Scott-Rodino merger review. https://www.ftc.gov/enforcement/merger-review
-
Kamaji:
"The acquisition should be blocked."
I agree.
We need to preserve a level of competition in the grocery business.
There is only about a ten percent overlap
in the territories currently covered by Kroger Corp. and Albertson's.
Duplicate stores in the overlapping territory
will be spun off into a new chain of about 400 stores.
The merger will not eliminate ANY competition.
The combined Kroger/Albertson's chain
will still be smaller than Walmart's grocery business.