The lawsuit filed by the Federal Trade Commission (FTC) and eight states, to block the merger between Kroger and Albertson’s, is now being heard in federal court in Portland, Ore. The outcome is likely to have a big impact on consumers in several different ways.
The two supermarket companies say the merger will streamline operations and lower prices. In fact, Kroger has promised the merger would allow the combined companies to cut grocery prices by $1 billion.
Consumer advocates are highly skeptical. And while arguments are being made in the courtroom, plenty of arguments are being voiced outside the chamber. And not all concerns are about prices.
“This merger will leave Californians with fewer choices over where to shop – and for workers in this industry, where to work,” said California Attorney General Rob Bonta. “We are in court today to prevent this unlawful attempt by Kroger and Albertsons to merge their operations and reduce competition in the marketplace.”
In fact, the proposed merger is fairly complex, because it’s not just a merger of Kroger and Albertsons stores. Each brand owns several other supermarket chains. Many of those stores would have to be sold to satisfy antitrust concerns. And that’s where things get sticky.
Lots of stores would become something else
In July, ConsumerAffairs reported that 579 stores across 18 states and Washington, D.C., would be spun off. The stores include Safeway, Albertsons, QFC, Vons, Harris Teeter and 10 other grocers, and would be sold to C&S Wholesale Grocers, which could rebrand them as Piggly Wiggly.
The states hardest hit would be Washington with 124 stores, Arizona with 101, Colorado with 91, California with 63, Oregon with 62, Illinois with 35, Texas with 28, Nevada with 16 and Alaska with 18. Many proposed sales are concentrated in the Seattle area, Denver area and Southern California.
Aside from causing some confusion among consumers accustomed to shopping at a particular supermarket, the American Economic Liberties Project (AELP) said the merger would have negative impact on store employees.
“With a merger this blatantly harmful to consumers, workers, and countless local communities, Wall Street cheerleaders can't help but rely on misleading arguments,” the group said in a post on X.
Kroger inked the deal to purchase rival Albertsons for $25 billion in October 2022. If approved, the merger would join the country's second and fourth-largest grocery retailers. The FTC filed its lawsuit to derail the deal in February.