If you ask a shopper who owns the supermarket they shop at, most will reply with an uncertain, “I don’t know” or perhaps “a conglomerate?”
Indeed, many of our grocery stores aren’t owned locally, but can be traced to one of the four largest supermarket brands that, combined, control almost two-thirds of the entire industry. As Senior Researcher and Writer Ron Knox warned on Vox’s Today Explained podcast, it could get much worse.
In early October, Kroger announced its proposed merger with Albertsons for a deal valued at $24.6 billion. This would combine the nation’s first and second largest grocery retailers, operating nearly 5,000 stores. If this deal is approved, Kroger-Albertsons would be the second largest grocery conglomerate, behind Walmart.
Retail mergers have been studied for a long time, Ron explained, and the outcomes are almost always damaging. After Albertsons acquired Safeway, the company closed 170 stores — leaving people bereft of jobs and communities with no option for fresh food. The Kroger-Albertsons deal would likely produce the same effect.
“The real danger is that you end up with this extremely consolidated grocery sector where you have one or two stores in a lot of places around the country and […] inflationary pressures increase because those companies end up with even more power to charge whatever they want for the things that sit on their shelves. That’s the real danger.”
With new leadership at the Federal Trade Commission, Ron expects that the merger will face extensive scrutiny. The Federal Trade Commission, which will review the deal, has been deeply skeptical of mergers that increase corporate concentration — and FTC Chair Lina Khan has expressed her doubts about whether corporate spin-offs can cure the extensive harm such mergers can cause. If the FTC believes that the harm the Kroger-Albertsons merger will cause can’t be cured by divesting stores, it will likely step in to block the deal.
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