Art by Sofie Koski

The largest retail grocery chain merger in U.S. history — between Kroger Co. and Albertsons Cos. — is estimated to be a $24.6 billion acquisition. Last October, Kroger announced the complex deal to acquire Albertsons that would pay all shareholders $34.10 a share. The proposed merger, if approved by federal regulators, would take place at the beginning of 2024.

In Colorado, Kroger operates 148 stores under the City Market and King Soopers banners, while Albertsons operates 105 stores under the Safeway and Albertsons banners.

According to Progressive Grocers’ annual list of North America’s top food and consumables retailers, published in May, Cincinnati-based Kroger Co. ranks fourth with $148.258 billion in fiscal year-end sales, up 7.52% from the previous year, with 2,719 stores. Albertsons Cos., headquartered in Boise, Idaho, ranks ninth with $77.6 billion in sales, up 7.95% from the previous year, with 2,271 stores.

Grocery prices have spiked
In June, the Center for Economic and Policy Research, a Washington, D.C.-based think tank, reported: “According to the Bureau of Labor Statistics, the cost of store-bought food increased by 23.5% from February 2020 to May 2023. For those interested in making a comparison, the average hourly wage for all workers in the private sector has risen 17.1%.”

Supply chain disruptions caused by the COVID pandemic, higher fuel prices and transportation costs have increased the expense of goods arriving in stores. Extreme weather events, like floods and droughts, have harmed crops, leading to reduced supplies and price spikes. Price fluctuations in agricultural commodity markets impact the cost of food production.

While the U.S. Department of Agriculture expects grocery prices to rise less than 1% in 2024, there is no denying that consumers have less purchasing power than they did pre-pandemic. And, as the inflation rate continues to tick upward, the price of goods and services, including groceries, continues to make a larger dent in consumers’ wallets.

Consumers have changed
In 2017, Amazon’s acquisition of Whole Foods propelled the e-commerce company into the retail grocery industry. Online services, like Amazon Pantry, offer delivery of non-perishable grocery and household items and, depending on where you live, also provide same or next-day delivery or pickup for fresh produce, dairy products and meats.

Meal preparation services, like Hello Fresh and Blue Apron, have increased competition in the food industry. While the pre-packaged meal kits are more expensive than buying separate ingredients at a grocery store, they offer the convenience of home delivery and time savings on meal preparation.

It should be noted that all major retail grocery chains provide some form of online grocery-buying service, with a store pick-up option or a delivery option available for an additional charge.

While the COVID pandemic furthered the appeal of contactless shopping options, it has arguably permanently changed some consumers’ grocery-buying habits.

Why mergers matter
The most significant hurdle the merger faces is Federal Trade Commission (FTC) approval. This independent U.S. government agency oversees and regulates mergers to ensure fair competition and protect consumers.

Many state attorneys general, including Colorado Attorney General Philip Weiser, have pursued consumer feedback. Consumer input can provide the legal basis for the state attorney general to challenge a merger in court if it is considered detrimental to consumer interests.

The pros of a merger
But what could the practical day-to-day application of a merger mean to the average consumer? Here are a few of the possible benefits:

• Increased bargaining power with suppliers: with a larger corporate entity having the ability to buy a larger market share of products, better deals could result in lower prices for consumers.

• Operational streamlining: reducing duplicate operations and optimizing supply chain deliveries could result in profitability.

• Increased store-brand product offerings: both Kroger and Albertsons own product lines that, when combined, could offer the consumer more product choices.

• Enhanced innovation: taking the best resources and technology from both companies to provide consumers with improved shopping experiences.

The cons of a merger
As is the case in most mergers and acquisitions, where there are benefits, there are also potential drawbacks. Here are a few to consider:

• Reduced competition: fewer players in any industry can lead to more expensive and less competitive pricing and choice for the consumer.

• Antitrust concerns: as mentioned earlier, the job of the FTC is to protect consumers. Concerns about a merger’s potential impact on competition might lead the FTC to require the divestiture (selling) of some stores and other measures to address antitrust concerns.

• Job losses: in efforts to streamline operational efficiency and eliminate job duplicity, mergers often result in job layoffs.

• Corporate culture challenges: the philosophy of how two different companies conduct their daily business can create conflicts for employees and consumers when adapting to organizational changes.

How can a consumer provide input?
According to the Colorado Attorney General’s website: “As authorized by state law, C.R.S. §§ 6-4-107, 6-4-111, the Colorado Department of Law is reviewing this proposed merger to ensure it is lawful, does not undermine competition, and is fair to consumers, workers, farmers, and suppliers.”

As part of the Department’s review, they are seeking public comment and consumer opinion on the merger, including information about consumer needs to help evaluate the potential impact of the merger on Coloradans.

The online survey is available at