US Regulatory Agency Moves to Block $25 Billion Kroger-Albertsons Supermarket Merger

By Trisha Andrada

Feb 28, 2024 08:05 AM EST

The Federal Trade Commission (FTC) of the United States has filed a lawsuit against Kroger and Albertsons, seeking to halt their $25 billion merger.

The lawsuit claims that the agreement would cause price increases, store closures, and job losses, making it the biggest supermarket merger in US history, as reported by CNN.

(Photo : ELIJAH NOUVELAGE / AFP via Getty Images)
Shoppers are seen in a Kroger supermarket on October 14, 2022, in Atlanta, Georgia.

Doubts Over the Deal

Announced in 2022, the merger aimed to integrate the country's fifth and tenth biggest shops. Among these corporations' many grocery store chains are Fred Meyer, Safeway, Harris Teeter, and Vons.

The planned merger, however, occurred at a time when food costs had surged. The Bureau of Labor Statistics reports that since 2020, Americans have spent 26% more on groceries, and they are spending the largest percentage of their income on food compared to any time in the last 30 years.

In a statement, the FTC expressed concern that the deal would lead to increased prices by removing competition from the supermarket business.

Henry Liu, director of the FTC's Bureau of Competition, stated: "This supermarket mega merger comes as American consumers have seen the cost of groceries rise steadily over the past few years. Kroger's acquisition of Albertsons would lead to additional grocery price hikes for everyday goods."

Also Read: Shein Is Eyeing London IPO Due to Challenges of Listing in the US

Biggest Grocery Merger Ever?

Reportedly, merging would help unionized Kroger and Albertsons compete with non-union behemoths like Walmart, Amazon, and Costco. The rapidly expanding German cheap grocery company Aldi is also putting pressure on these companies.

Together, the two businesses employ over 710,000 people, have around 5,000 retail locations, and generate over $200 billion in annual revenue.

The businesses said they could cut customer costs and personalize discounts and promotions with the $500 million in savings they would get from the merger.

Also Read: Amazon Pays $1.9 Million to Over 700 Migrant Workers to Settle Human Rights Abuse Claims

© 2024 VCPOST, All rights reserved. Do not reproduce without permission.

Join the Conversation

Real Time Analytics