This doesn’t bode well for consumers.
I hope this merger is rejected.
And all to complete with Wal*Mart!
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I worked in purchasing for Whole Foods for 5 years. This is bad for suppliers and, especially farmers. Conditions in food processing plants will worsen and more workers will die or suffer life altering injuries. Farms will sell out to large agribusiness.
You know, capitalism ar its finest.
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It should be, but it won’t.
Antitrust action in the US over the last 50 years amounts to a polite throat clearing amidst a full scale riot.
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Where I live there are 3 supermarkets within a mile of my house. After such a merger they would all be owned by Kroger. That is a monopoly. To be honest they are all crappy supermarkets. Two are Kroger owned and one is Albertsons owned at the moment. There is a Whole Fools 2 miles away but I wouldn’t shop there. Without a doubt we are well on the way to becoming a shithole country and corporations and hedge funds are trying to make it worse. Ditto: Capitalism at its finest.
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I am weirdly lucky. I am within a mile of two grocery stores, three if you count Target. One of the stores is one of the oldest ‘gourmet’ grocery stores (Corti Bros.) and the other is a Sav Mart, which is, shockingly, NOT owned by either Albertsons or Kroger. Just a little further afield, we have a huge employee-owned Hispanic-centric warehouse-style grocery, and past that, a selection of Asian grocery stores, including 99 Ranch. And, of course, Trader Joe’s. There’s also WinCo (also not part of either Albertson’s or Kroger) and Costco.
There’s a Safeway and Bell and Raley’s in town. Occasionally there’s an item I want that only they seem to carry. (Gino’s East Frozen Pizzas, for ex.) Otherwise, it’s pretty rare that I go to any of 'em.
But my particular location is a RARE exception. I suspect a lot more people live in a situation like yours.
I am not sure it is all doom and gloom with this contemplated merger.
The largest grocery store (by market share) is Walmart, which accounts for about 25% of the total share of grocery retailers (see chart below). A combined Albertsons/Kroger wouldn’t even account for 1/2 of what Walmart currently has in total market share (12.9% combined versus 25% Walmart).
If instead of market share, one were to focus on revenue, the picture is even less stark than it actually appears on the face of it, with Kroger and Albertsons falling to 4 and 5, respectively.
While not traditional, Walmart dominates the retail grocery space (just like it does alot of other areas). This contemplated merger would not change that.
I think what most people tend to overlook is that grocery shopping has changed in our current climate. Many people will take a divide-and-conquer approach to their food purchases. Big box retailers (like Walmart, Costco) for staples like rice, eggs, dairy, meats, etc. and specialty stores (like Whole Foods, Trader Joes’, Gelsons, Sprouts) and/or online delivery (like Amazon) for unique, name-brand items or particular ethnic and one-off purchases.
For example, a typical person might shop at Safeway for staples like bread, eggs, milk and some bananas, and go to Sprouts for bulk nuts and some dried fruits, as well as particular cuts of pork, sockeye salmon, and fresh head-on shrimp, and then perhaps Amazon Prime to source some hard to find Cassia bark, and maybe even Trader Joe’s to ransack their variety of ever rotating chips and snacks.
TL:DR The one-size-fits-all model that Kroger and Albertsons (and their brands like Safeway, Vons, etc.) have increasingly lost relevance in today’s marketplace. A merger wouldn’t necessarily change that.
My own buying habits tell me you’re correct. There’s no longer ‘the shopping trip’. There are “oh, you’ll be there? Stop at X and pick up y and z on the way back.”
Yes, I agree with you.
But I hesitate to have even written this because it can come off as tone-deaf and the ramblings of comfortable middle and upper middle class bourgeoisie.
There are many many (too many, really) who do not have such luxuries that we do (i.e. making shopping stops versus shopping trips) because they essentially live in food desserts and the thought of buying one-off brand name items or ordering something from Amazon Prime would be as palatable and acceptable as eating canned oysters with peanut butter.
I do not want to speak for those people.
My point only was that for some of us, our shopping habits have changed. Not all. Just some.
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I think we’re just aggressively agreeing with each other. And with @curmudgeon who clearly DOESN’T live where either you or I do. Both of us live in cities of particular diversity, and we’re both able-bodied and well off enough to be able to travel non-trivial distances for any given item, should we want it badly enough.
That’s not the case for many (or even most?) Americans. I mean, sure, I have a couple of nice stores within walking distance, but if I didn’t have a car? Pfff. I’d be screwed. I could never do anything like buy ice cream or perishable meat in the summer, when walking home would mean 30+ minutes in 95F weather.
It’s not the really the size of resulting merged business that affects shoppers; it’s whether the merged business eliminates meaningful shopper choice within a reasonably traveled radius. From the suppliers’ perspective, does the combined company reduce competition among stores so that manufacturers and farmers would predictably lose revenue.
It’s sort of a chicken and egg, but the lack of competition in the manufacturing sector is already extant, and is really not driven by the end-market retailer consolidation.
Then we’d expect Kroger/Albertson to argue that getting together helps get better deals from suppliers, thus [possibly] keeping prices down for retail shoppers.
When I lived in So. CA it seemed there was a market every few blocks. Some of those family/small business owned markets/delis were fabulous.
But now that I live in a small mountain town of about 5000, my respect for the local Safeway has increased by an order of magnitude. When I moved up here in '98 they were ok, but since then they have remodeled, adding Deli, Bakery, and Meat counters. Small entities can simply not compete here given the size of the town.
That is their argument (among others).
But as I said up above, I am not so sure that traditional grocery stores (like Kroger, Albertsons, Safeway, Vons, etc.) are all that relevant anymore.
Big box retailers like Walmart and Costco not only have a larger market share, but ostensibly larger purchasing power as it is.
