Merger of Two Supermarket Giants Struck Down
What was about to become the largest merger in U.S. supermarket history was just halted by a federal judge in Oregon.
The ruling on the $25 billion merger between Kroger, the fifth largest retailer in the U.S., and Albertsons, the tenth largest, “would limit competition and harm consumers,” according to CNN. The outlet also reported that this “is a major setback for the chains and puts the merger’s likelihood in jeopardy. The judge issued a preliminary injunction halting the deal, which the companies can appeal.”
Kroger and Albertsons announced the merger in 2022 because of increased competition and loss of market share in the supermarket space. “Supermarkets have been losing ground in recent decades to competition, and Kroger and Albertsons wanted to merge to better fight off Walmart and Amazon.”
“The merger would accelerate ‘our position as a more compelling alternative to larger and non-union competitors,’ Kroger CEO Rodney McMullen said when the deal was announced in 2022. Kroger committed to lowering grocery prices by $1 billion following the merger.”
In her ruling, Judge Adrienne Nelson notes that “supermarkets are ‘distinct from other grocery retailers’ and are not direct competitors to Walmart, Amazon and other companies that sell a wider range of goods. The merger would eliminate head-to-head competition between Albertsons and Kroger, potentially raising prices for consumers, she said in the ruling.”