Kroger Merger with Albertsons Would Allow More Competitive Pressure on Other Market Leaders

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Kroger announced a deal today to merge with Albertsons, which would combine the nations’ two largest chains of grocery stores into one company. The deal is expected to draw scrutiny from antitrust regulators.

Director of CEI’s Center for Technology and Innovation Jessica Melugin said:

“With Walmart and Amazon as competitors, it’s understandable that traditional grocery stores need to scale up to stay competitive. Critics see this as one less competitor in the market, but if Kroger and Albertsons are prevented from merging and go out of business because they can’t combine their resources to compete on price, it will be government meddling that stifled competition. If allowed to merge, they’ll be better able to put competitive pressure on the other market leaders and that’s a win for consumers.”

CEI President and CEO Kent Lassman said:

“The market for groceries is the latest to grab headlines for what is both normal and heathy: dynamic responses to an evolving economic landscape. Recession, inflation, and new consumer patterns with online ordering and home delivery means suppliers must adapt or stagnate. How companies configure themselves is just one form of adaptation and we should cheer the experimentation and ward off political opportunism that would control or direct how private capital reacts to a changing world.”

CEI Vice President for Policy Wayne Crews said:

“Once again, critics of this merger are mistaking a dynamic market for a static one. Much like allowing Sprint and TMobile to merge didn’t mean one less 4G competitor, it meant one more 5G competitor, allowing Kroger and Albertsons to merge will likely mean a more, not less, competitive market in the long run. It’s the same confusion that surrounded proposed mergers of XM radio and Sirius and Office Depot and Staples: regulators can’t freeze things in time, but they can stop firms from adapting and innovating. Consumers deserve better when it’s a matter of putting food on the table.”

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