Analysis: What the Kroger-Albertsons merger could mean for our area

NEW YORK (WDEF) – Friday saw a blockbuster announcement in the grocery wars, but one that shouldn’t have an immediate effect on the Chattanooga market.

However, experts say there are implications.

Kroger announced plans to merge with the Albertsons grocery chain in 2024.

It may never happen if the government challenges the move, but the deal would combine the 5th and 10th largest RETAILERS (not just grocery stores) in the country.

Between them, they also own dozens of other chains, including Safeway, Vons, Harris Teeter and Fred Meyer.

But neither has much of an imprint in our area.

Kroger has two stores in Dalton and is dominant in the midwest. Our local stores shouldn’t see much impact.

Albertson’s is strong on the west coast.

But grocery watchers say the deal reveals much about where the industry is going, which could trickle down to us.

  1. Prices: CNN reports that grocery prices jumped 13% in September (over last year), the fastest pace in a long time.  Albertson’s is particularly high priced and feeling the heat from discounter Aldi.  Kroger is promising to bring down food prices at Albertson’s.
  2. Merger Fever- The Big Boys: Analysts say the merger is a challenge to their biggest competitors in the U.S…  Amazon, Walmart and Costco.  Amazon, particularly, is primed to expand their national imprint, but the other two may also feel pressure to gobble up smaller grocery companies.
  3. Merger Fever- Regional Players: Our market also has strong regional players in Food City and Publix. As the grocery chains move to consolidate, our local chains will feel pressure to also expand or be eaten up themselves (larger deals than the Food City buyout of Cooke’s in Cleveland in August).
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