Kroger and Albertson’s Planned Merger, A Threat to Consumers Ruling States

A merger that’s been in planning since 2022 between Kroger and Albertson’s was officially struck down earlier this week by a U.S. District Court in Oregon ruled that the merger, which would have been the largest between two supermarkets, would diminish competition in the free market and fail to protect consumers. At the announcement of the failed merger, Kroger ultimately decided to pull out of the deal entirely, stating that “it is no longer in its best interests to pursue the merger.”

For consumers, this means that the next food giant to truly rival Walmart will have to wait. Walmart controls roughly 22% of the consumer market, while the merger between Albertson’s and Kroger would have pushed their market to approximately 13%. Additionally, with the rise of Aldi nationwide and Walmart and Costco’s continued growth, Kroger and Albertson’s merger seemed to make sense for both parties.

According to the National Retail Federation, Kroger and Albertson’s failed to open any new stores in 2022 and 2023, while Publix and Costco opened 2.3% more stores in that same period. This suggests that this merger was perhaps more motivated by fear than strategic interest. Upon learning of the court’s decision to block the merger, Albertson’s suggested that it may have to lay off associates and employ other cost-cutting measures in the near future.

Wall Street responded accordingly after the news of the breakup, with Kroger’s shares rising 1% and Albertson’s declining 1.5%.

If you are a landlord looking to fill vacancies in your centers in the Tampa Bay Area and want to know how I can help with your real estate needs or hear more about how Kroger and Albertson’s fallout may affect you, feel free to contact Zachary Ellis at 813-493-3437 or zellis@lqcre.com.

Sources: Wall Street Journal , Business Insider, Market Watch