The proposed $24.6bn merger of Kroger and Albertsons could have dramatic consequences for customers, including higher prices for groceries and more food deserts, experts say.
The agreement between two of the largest supermarket chains in the US – which own brands such as Ralphs, Mariano’s, Fred Meyer, Safeway and Vons – would give the combined company control of nearly one-fifth of the US grocery market, with about 5,000 stores across 48 states. If the deal is approved by regulators, it is expected to close in 2024.
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Store closures are one likely outcome since some neighborhoods have shops from both chains, said Stacy Mitchell, a co-executive director of the Institute for Local Self-Reliance, a non-profit that helps communities attract grocery stores and other services. “This merger is incredibly dangerous,” she said. “It’s highly likely if it goes through it will result in more communities not having a grocery store.”
Higher prices are another. Christine Bartholomew, a law professor at the University of Buffalo who previously practiced antitrust and consumer-protection law, said that price hikes have followed grocery store mergers before, and that the same pattern is likely after any big grocery merger. One reason is the loss of private labels, or store brands that are generally cheaper than name brands, she said. Consolidation would mean fewer options.
“I’m deeply concerned about the consumer choice aspects of this,” Bartholomew said. “It may not sound like a big deal, but private labels are among the most affordable brands.”