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In the new shopping world, Albertsons-Kroger merger could provide the competition we need


Before you head over to the produce department and grab a few tomatoes to hurl in my direction, hear me out: the Albertsons-Kroger merger could be a very good thing for consumers.


Why? Because, like it or not, the way we shop has dramatically changed. More Americans are doing their shopping online or at a discount warehouse. Fewer go inside the grocery store. For many, that weekly trip to the market is becoming a thing of the past. Online and warehouse competition has changed everything – and it has helped lower the cost of many goods.


Walmart, Amazon and Costco are now the major players in the grocery marketplace. Chances are, you’ve purchased an item at one of the three over the past 30 days.


In fact, Walmart/Sam’s Club make up nearly a third – 30 percent – of the U.S. grocery market share. Costco tallies another 7 percent. Amazon is moving quickly and accounts for more than 5 percent. And consider this: Amazon Prime, Walmart+ and Costco have more than 250 million subscriptions.


Even if the Albertsons-Kroger merger proceeds, it would account for just 9 percent of nationwide sales, according to the International Center for Law and Economics. But what it would do is get the attention of the big three – increasing competition with their 42% of the current market share.


Kroger and Albertsons are cognizant of criticisms of the deal. The chains say they will sell 413 stores and eight distribution centers to address any questions about a monopoly in certain communities.


In fact, a review of all of the Albertsons and Kroger locations throughout the country shows very few places where the two stores both have locations.



The Federal Trade Commission is now reviewing the proposal and could rule sometime next year. Kroger-Albertsons says its prepared to fight in court to ensure the merger goes through. No supermarket mergers have been litigated since 1988.


It is likely the largest dispute will be over what defines the term “supermarket.” Does it have to be a traditional brick and mortar location? Will online supermarkets be counted? If not, why? It is clear that Amazon, Walmart and Costco directly compete with Kroger and Albertsons, so why wouldn’t they be included in any merger analysis?


Nearly 30 years ago, supermarkets accounted for 81% of retail sales. That dropped to 61% a decade later, and today, it’s near 50%. Where have all of the customers gone? Online and warehouse stores.


An economist with the Strategic Resource Group recently told Yahoo Finance "Kroger’s acquisition of Albertsons is the last, best, and final chance to level the playing field."


As with any proposal, there is fear of the unknown. But we shouldn't let fear destroy an opportunity to increase competition and improve the outlook for the consumer.

6 Comments


Guest
Dec 07, 2023

The premise of this article is blatantly false. How can a merger between competitors increase competition?? The only logical outcome is to reduce consumer choices and drive up cost. How many people reading this know anyone who has actually stopped going to the grocery store?

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Guest
Nov 21, 2023

If the government enforced antitrust laws this would not be happening. There is a reason for not letting anyone industry get to big so that it dominates the field and sets the price out of anyone’s range.

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Guest
Nov 21, 2023

When albertsons bought safeway we all heard prices will go down. Just The opposite happened. They got so expensive i quit shopping there. I saw prices go up one dollar on almost everything. And that was in just one week!!!

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Guest
Nov 18, 2023

The merger will NOT help the consumer. It will just raise prices as the Safeway-Albertson's merger did. It will also hurt the local grocery store chain. What needs to change is that the same pricing needs to be given to small grocers and the big giants. It's not fair that the big giants keep trying to squeeze everything dry to lift their profits. One more giant will just make it worse. Pricing programs need to be legislated!!!

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Guest
Nov 17, 2023

I think the merge will make food more expensive in the long run, Kroger already has a bad reputation for bulling farmers into lower prices. Farms are failing all across the US and combining the buying power of grocery stores over packing sheds is only going to hurt the American farmer in the long run.

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