How would a Kroger/Albertsons merger affect your local grocery store?

By Oregon Small Business Association,

With recent store closures in Oregon, consumers might be wondering how a Kroger/Albertson’s merger could affect their local grocery store.  Kroger, the parent company of Fred Meyer, and Albertsons who owns Safeway, have struck a merger deal that is being reviewed by the Federal Trade Commission.

Scott Moses, a grocery industry expert with Solomon Partners and an advisor to Albertsons in the deal, makes the case that the merger is needed for these supermarket grocers to stay competitiveKroger’s and Albertsons’ success allows consumers to have more choices and more access to local neighborhood stores.   The connection that locally grown stores like Kroger-owned Fred Meyers have with their community is at risk if they do not adapt to major market changes.

Moses explained in a recent talk how the grocery industry has significantly changed over the last 20 years.

The pandemic accelerated consumer’s move to online shopping and is one of the major factors that has fueled the growth of Amazon (who owns Whole Foods), Costco, and Walmart securing their current strongholds as national discount grocers.  Supermarket grocers like Kroger and Albertsons are working hard to adjust to remain competitive with them.

Past company earnings filings reveal what supermarket grocers are up against competing with national discount grocers who have more capital to invest in expansion, renovations, and technology.   From 2020-2023 Amazon/Whole Foods grew in value by $590 billion, Costco by $112 billion, and Walmart by $98 billion compared to Kroger’s growth of $6 billion and Albertsons’ $5 billion.

Kroger’s deal to acquire Albertsons comes with assurances by Kroger that they will not close any stores or cut any front-line workers.  They have also pledged to invest $1 billion in better wages and benefits for their employees. This includes up to $21,000 in education tuition reimbursement for full and part time employees furthering their education.  In addition, they have pledged to combat food insecurity by donating 10 billion meals over the next six years to those in need.

These are all important pieces to maintaining a strong workforce in our communities.  If the merger is approved, a larger, stronger combined Kroger/Albertson’s just might help ensure that your local Fred Meyer, Albertsons, and Safeway supermarkets are able to adapt and compete with their larger competitors so they can stay in your neighborhood.

Disclaimer: Articles featured on Oregon Report are the creation, responsibility and opinion of the authoring individual or organization which is featured at the top of every article.