CSPI Asks FTC to Block Kroger-Albertsons Merger

Watchdog group says merger would reduce food access by raising prices and shuttering stores

5/15/2023

Unionized grocery store workers rally to oppose the proposed merger between Kroger and Albertsons outside a Ralph's supermarket in Los Angeles in April.

The Center for Science in the Public Interest (CSPI) is calling on the Federal Trade Commission (FTC) to block the proposed merger of The Kroger Co. and Albertsons Cos. The nonprofit nutrition and food safety watchdog group has outlined its concerns in a letter to members of the FTC, saying the proposed merger would result in fewer grocery stores and higher food prices — negatively affecting food and nutrition security for consumers around the country.

According to CSPI, the Kroger-Albertsons merger would combine the two largest U.S. supermarket chains, resulting in an entity that would control 22% of the food retail market and make it the nation’s second-largest food retailer. Post-merger, the combined companies plus the largest food retailer, Walmart, would control 55% of the food retail market. CSPI cited a 2017 study that showed grocery mergers in highly concentrated markets are associated with higher food prices. Consolidation in the grocery industry is also associated with fewer grocery stores.

In addition to outlining its concerns in a letter to members of the FTC, CSPI revealed that it’s formally joining the Stop the Merger coalition, led by local chapters of the United Food and Commercial Workers (UFCW) and other labor and economic justice organizations. In April, grocery store workers from several UFCW unions protested the proposed Kroger-Albertsons merger with a rally at Ralphs in Los Angeles.

“Food prices are higher than ever before, and 40 million Americans live in areas with low incomes and limited access to healthy, affordable food,” said Dr. Peter G. Lurie, president of Washington D.C.-based CSPI. “The proposed merger of Kroger and Albertsons will likely mean higher prices, fewer stores and less competition. It might be a good move for executives and shareholders, but the merger would be an economic blow to Americans, especially those whose jobs would be lost post-merger.”

In a jointly penned opinion letter to the editors of the Cincinnati Enquirer and Cincinnati.com in late April, Albertsons CEO Vivek Sankaran and Kroger CEO Rodney McMullen sought to dispel misconceptions regarding the proposed merger, among them rumors about job losses. The leaders reiterated the point that “no front-line workers will be laid off as a result of the merger.” The CEOs also sought to allay concerns about store closings, noting that Kroger has committed to “zero store closures” as a result of the business move. "As a part of the regulatory process, we anticipate divesting − or selling − some stores. These stores will remain open. We are working closely with the regulators and are committed to finding reliable operators for the divested stores,” Sankaran and McMullen wrote.

Both companies hope the merger process will be completed by 2024.

Serving 11 million customers daily through a digital shopping experience and retail food stores under a variety of banner names, Cincinnati-based Kroger is No. 4 on The PG 100, Progressive Grocer’s 2022 list of the top food and consumables retailers in North America. Boise, Idaho-based Albertsons operates more than 2,200 retail stores in 34 states. The company is No. 9 on The PG 100. PG also named both companies to its Retailers of the Century list.