FTC Sues to Block Kroger/Albertsons Merger

The U.S. Federal Trade Commission (FTC) said Monday it would try to block the merger of two large grocery chains, Kroger and Albertsons, saying it would result in higher prices and lower wages for workers. If successful, the merger would be the largest for supermarkets in history, according to a press release from the FTC. Ohio-based Kroger is working to acquire Idaho-based Albertsons for $24.6 billion.

The FTC said the proposed deal will eliminate fierce competition between Kroger and Albertsons, leading to higher prices for groceries and other essential household items for millions of Americans. It said the loss of competition will also lead to lower quality products and services, while also narrowing consumers’ choices for where to shop for groceries. Furthermore, the FTC said Kroger’s proposed acquisition of Albertsons would immediately erase aggressive competition for workers, threatening the ability of employees to secure higher wages, better benefits, and improved working conditions.

Kroger said in a statement that the opposite is true, and consumers would likely see rising prices if the FTC is successful with its lawsuit.

In April the CEOs of both companies penned an op-ed in the Cincinnati Inquirer dispelling some of the "misconceptions" they said they had heard since they announced the merger, including that stores would close, workers would lose their jobs at the grocery stores, and that groceries there would become more expensive. Reuters reported in September that Kroger and Albertsons planned to sell more than 400 stores to C&S Grocers.

Total Retail's Take: Kroger operates 2,750 stores in 35 states and the District of Columbia, including banners such as Ralphs, Smith’s, and Harris Teeter. Albertsons operates 2,273 stores in 34 states, including banners such as Safeway, Jewel-Osco, and Shaw’s. Together the companies employ around 700,000 people, according to the Associated Press.

The merger has been met with scrutiny since its announcement in October 2022, with progressive lawmakers calling for an antitrust panel to hear the case. In January, the two companies said they expected the merger to be completed in the first half of the fiscal year. They said after the FTC's announcement Monday that they planned to challenge the FTC in court, according to the AP. One would expect an extended legal case before a final decision is made.