![]() ![]() Last summer, Kroger CEO Rodney McMullen said that “a little bit of inflation is always good in our business,” because “customers don’t overly react” to increases in prices. But outsized profit margins from retailers haven’t helped, and Kroger and Albertsons have been part of the group of companies practically boasting about them. produce-growing areas, and an avian flu outbreak. There are a lot of factors in rising food costs, including impacts on grain sales from the war in Ukraine, drought conditions in U.S. Over 60 percent of all American grocery sales are concentrated in just five companies: Amazon, Walmart, Kroger, Albertsons, and Ahold Delhaize. Staples like eggs (30.5 percent), chicken (17.2 percent), and coffee (15.7 percent) are rising even faster than that overall average. Just last week, the September statistics on inflation showed significant increases in food costs, particularly for food consumed at home, which has risen 13 percent year over year. It would give Walmart, the biggest grocery outlet in America, and the merged company something close to half the market. This merger would put two of those five together. The illusion of choice in supermarkets masks the dominance.Ĭongressional testimony this January from the National Grocers Association indicates that over 60 percent of all American grocery sales are concentrated in just five companies: Amazon, Walmart, Kroger, Albertsons, and Ahold Delhaize (a Dutch grocer that owns several brands like Giant, Food Lion, and Stop & Shop). ![]() Albertsons, boosted by a 2015 merger with Safeway (more on that later), has that chain in its stable, along with Acme, Haggen, Jewel-Osco, Shaw’s, Pavilions, Vons, and many more. Kroger brands include Ralphs, Dillons, Food 4 Less, Fred Meyer, Harris Teeter, King Soopers, Mariano’s, and several more. You might think that there isn’t a Kroger or an Albertsons in your neighborhood, so this merger won’t affect you. It takes a supreme amount of faith in the laissez-faire attitude of the courts to believe that they would accept this deal. The $24.6 billion deal would put together the country’s two largest supermarket chains at a time when prices for groceries are already skyrocketing. That’s what could be behind the preposterous merger announced Friday between Kroger and Albertsons. In the short term, however, this means that companies are more emboldened to take on more and more mergers, thumbing their nose at the DOJ and FTC, and believing that the judiciary is on their side. Matt Stoller of the American Economic Liberties Project calls this the “ antitrust shooting war,” and the agencies are showing themselves willing to take some casualties. (The judge in the UnitedHealth case literally allowed the merger through because the company seemed trustworthy.) But that’s only going to change if the agencies are persistent at moving the legal philosophy around corporate power away from surrender. The federal judiciary, despite President Biden’s installation of a near-record number of judges, remains hostile to many of these cases, in thrall to a long-standing, corporate-friendly way of looking at antitrust. It means that the agencies aren’t afraid to try to block the kinds of cases that haven’t been bothered with for decades. To be clear, the losses are a good thing. Sugar-Imperial Sugar deal was waved through. Just last month, UnitedHealth was allowed to combine with Change Healthcare, medical testing companies Illumina and Grail were approved to merge, and the U.S. On several occasions in the past few months, courts have rejected attempts by the Justice Department’s Antitrust Division and the Federal Trade Commission to block mergers. But they are running into the buzz saw that is the federal judiciary. economy, more than willing to challenge the mergers-are-good orthodoxy of the past 40 years. ![]() They have been newly aggressive in scrutinizing concentration across the U.S. Today, anti-monopoly fighters control the major agencies that police mergers. The more pricing power that Kroger and Albertsons have, the fewer choices consumers have other than to accept higher prices. ![]()
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