Proposed Kroger-Albertsons Merger Would Create a Grocery Giant | Hacker News Reader

Proposed Kroger-Albertsons Merger Would Create a Grocery Giant

prospect.org

10 pointsAmorymeltzer11 comments

The article mentions Walmart but glosses over the fact that it will continue to have the largest share of grocery spend even after this merger. The FTC will attempt to block this merger, but it's ultimately going to fail because of that fact. At least the lawyers will make money.

I don't think so, this merger is being done to decrease competition of the most basic staple: food. Other than shelter it's most basic need we have and think in particular this one will hit home.

Everything you wrote plays into why Khan's FTC will attempt to block this merger, but none of it plays into a legal basis to actually do so. Like I said, the net result will be that the lawyers get to bill lots of hours.

It likely will go through but the new company will be forced to sell hundreds of stores in areas where the combined chain dominates. This is pretty common when grocery chains merge and it's likely they've already planned out various maps to suggest to the FTC. The company of course will like to minimize store sales (though they might take the opportunity to get rid of some low performing, expensive to operate stores) and the FTC will try to maximize competition in the overlapping markets.

Yes, the list of stores to sell/close due to overlap is part of the deal terms.

Walmart is irrelevant if there aren't any near you.

The same goes for Kroger/Albertons, and Walmart's footprint is broader than Kroger and Albertsons combined.

FWIW, I live in Seattle, one of the few areas of the US where your comment applies (Kroger and Albertsons nearby, but not Walmart). I could probably get to 20 of these companies' stores (QFC, Fred Meyer, Safeway, Albertsons) faster than the nearest Walmart. The merger doesn't faze me because we also have Costco, Amazon Fresh, Trader Joe's, PCC, Met Market, and a smattering of independent grocers and co-ops.

It's a bit ironic that city councils that kept Walmart out, are powerless to stop something like this. I mostly can't look at this from a less-competition-good POV, but hey, not just the lawyers, but the monopolists will do just fine too.

I realized that I missed Whole Foods, which reinforces the point.

As the article points out, divesting some stores in some locations isn't a long term solution that has worked in the past. I don't think it's in anyone's interests to have oligopolistic supply chains and grocery stores. If you look at the other related story on HN today, you'll see the top 4 grocers have jumped from 10-15% of the market share to ~35% and plenty of suburban and rural havoc caused by mergers.

If the status quo is sustainable, which it seems like it is, then there is little reason to not consider these mergers monopolistic and stop them.

I hope Albertson's has a "we get $10 billion if the merger gets nixed" clause, because this will get nixed as it will only contribute to inflation and that's not too popular with federal regulators currently.

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