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Earlier this week, the Federal Trade Commission sued to block the largest supermarket merger in US history, a $25 billion deal between Kroger and Albertsons. The merger, the FTC claims, would result in limited competition and even higher prices for consumers as well as job losses, store closures (especially in areas where grocery options are already few and far between) and other issues.
Kroger and Albertsons, however, contend that the merger is necessary for regular supermarket chains to be able to compete with big box retailers like Target and Walmart, though they failed to explain exactly how or why this would be.
The retail giants also argue that because many of their stores are unionized and Target and Walmart stores are not, this merger would be a win for workers as well. Again, it remains unclear what impact these companies becoming one giant grocery monopoly would actually have on that.
“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, further exacerbating the financial strain consumers across the country face today,” Henry Liu, Director of the FTC’s Bureau of Competition said in a press release. “Essential grocery store workers would also suffer under this deal, facing the threat of their wages dwindling, benefits diminishing, and their working conditions deteriorating.”
The press release also noted that even the executives are aware that the merger would create a grocery monopoly.
Executives for both Kroger and Albertsons have acknowledged that the two supermarkets are direct competitors, forcing each other to aggressively compete for customers by lowering prices and for employees by providing better pay and benefits across the country. Similarly, executives for both supermarket chains have conceded that Kroger’s acquisition of Albertsons is anticompetitive, with one executive reacting candidly to the proposed deal: “you are basically creating a monopoly in grocery with the merger.”
Grocery prices have skyrocketed since COVID. Retailers took advantage of people’s fears and willingness to pay high prices during a time of scarcity in order to ensure their own survival/continued ability to wipe their own butts. However, instead of bringing prices down afterwards, they decided “Hey! If this is how much people are willing to pay for things, let’s keep this going!” and continued the price gouging — telling consumers not to blame them, but instead to blame “shoplifters.”
It is not surprising that the FTC saw this and thought “Gee, not sure we really want to make it easier for these companies to drive up prices even further.”
There are a lot of different grocery stores where I live in Chicago but the two largest chains are owned by Kroger (Mariano’s) and Albertsons (the Jewel). I don’t go to the Jewel very often so I couldn’t tell you about that, but the Mariano’s a block from my apartment is pretty pricey compared to some other stores further away. Without any competition between the two, I’d have to imagine it would get worse.
As an aside, Chicago Mayor Brandon Johnson has been pushing for a municipally-owned grocery store, which I fully support and think will be awesome.
While this merger would obviously have a negative impact on regular grocery store workers, it’s worth noting that it would actually also impact those in the middle who may also lose their jobs due to “redundancy” after the merger. A big part of the problem with these mergers is the loss of middle class jobs that do actually pay people enough to live.
Now, look — I’m a damn socialist. But if you’re gonna do capitalism … do capitalism! Capitalists always claim that it results in the most fair prices because of competition, but how is that supposed to work if there’s no competition? There’s already barely any incentive for these companies to keep their prices low to begin with and there won’t be any at all if they’re the only game in town/country.
The Kroger-Albertsons people want to do what’s best for those at the top and for their shareholders. It’s understandable that they would be out for themselves. But we have to be out for ourselves as well, as workers and consumers — so thank goodness the FTC is looking out, because we don’t have a whole lot of other options.
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