Kroger and Albertsons Plan $25 Billion Supermarket Merger That May Face Hurdles (Published 2022) (2024)

Two of the country’s largest supermarket chains announced plans on Friday to merge in a deal that could alter the food retail landscape but will also face intense scrutiny by regulators.

Kroger said it would acquire Albertsons for $24.6 billion. The chains currently have total revenue of more than $209 billion and about 5,000 stores across the country under well-known chains like Ralphs, Safeway and Vons.

Executives at the two companies said the combination was needed to better fend off big-box retailers like Walmart, Amazon and Costco, which can use their size to sell yogurt, cereals and pastas at lower prices, and have increasingly taken a bigger share of consumers’ wallets. Moreover, they said, the companies would pass along to customers as much as $500 million in savings resulting from the merger.

But the deal quickly drew criticism from consumer advocates, independent grocery chains and politicians who said it would limit shoppers’ choices of where to buy groceries, especially in lower-income and rural areas, and could lead to higher prices for consumers and independent grocers.

“We don’t need another mega grocery store chain,” said Stacy Mitchell, co-executive director of the Institute for Local Self-Reliance, an advocacy group that challenges areas of concentrated corporate power, such as the grocery industry.

If the merger went through, she said, the combined Albertsons-Kroger and Walmart would control 70 percent or more of the market in 167 cities in the United States. In some, like Salina, Kan., or Durango, Colo., the share would exceed 90 percent.