Position on the Merger of Kroger and Albertsons
In October 2022, Kroger announced a landmark $24.6 billion deal to acquire Albertsons. This proposed merger between the second- and fourth-largest grocers in the nation would consolidate their extensive geographical footprints and dozens of regional subsidiaries. The move represents the continuation of a troubling trend within the food retail sector toward consolidation, which has resulted in a nearly 30 percent decline in the total number of U.S. grocery stores since 1994.
We share the Federal Trade Commission’s concerns that this merger would stifle essential competition, drive up prices for millions of American consumers, diminish product quality and nutrition, and eliminate consumer choice. Historical studies confirm that grocery store mergers increase prices for consumers. In the post-pandemic food industry landscape, American shoppers are already facing elevated grocery prices –– up 25 percent in the last four years, compared with 19 percent for overall inflation — as well as “shrinkflation,” the reduction in package sizes while prices remain stable or increase. Moreover, over 50 million Americans live in low-income census tracts with reduced food access, a problem the Kroger-Albertsons merger could exacerbate.
Kroger and Albertsons are the two largest employers of union grocery labor in the United States. Experts agree a merger would depress worker wages and result in unsafe working conditions and the loss of critical worker benefits. According to a report by the Economic Policy Institute, the proposed merger would lower 746,000 workers’ wages by a total of $334 million. This would be a significant hit for a labor force that, like many consumers, remains in economic crisis following the pandemic.
A 2022 study found that supermarket workers’ wages have shrunk by 22 percent since 1990 and that over 75 percent of workers cannot afford healthy food, frequently go hungry, and are unable to provide food for their children. Food insecurity for Kroger workers specifically is seven times greater than the national average. “Kroger management’s cost-cutting practices have compromised personal, health and food safety in stores,” the study’s researchers note; “not surprisingly, workers report high rates of depression and anxiety resulting from their unsafe and insecure working conditions.”
In addition to the dangers it poses to American consumers and workers, a Kroger-Albertsons merger would harm local economies. Local retailers, small businesses, farmers, and suppliers may face increased pressure or even closure due to decreased competition and bargaining power. The merger could also amplify social and environmental harms such as pollution, deforestation, and poor animal welfare — issues that are already present in both companies’ supply chains.
Finally, anti-competitive practices, including this potential merger, afford major food corporations outsized political power. Food industry consolidation has already resulted in the corporate capture of state and federal legislative and regulatory bodies, which threatens consumer freedoms, renders the food supply chain more vulnerable to shocks, and severely hinders efforts to protect workers and the environment.