FTC Warns Kroger and Albertsons Merger Could Lead to Price Hikes in Over 1,400 Communities

The Federal Trade Commission (FTC) has raised concerns that Kroger’s proposed $24.6 billion acquisition of Albertsons could lead to anti-competitive market concentration in over 1,400 communities, potentially driving up prices. This warning came in the FTC’s post-hearing brief to the District Court of Oregon, where antitrust cases related to the merger are ongoing.

According to the FTC, the merger could result in significant market dominance for Kroger in many areas, reducing competition and creating conditions for price hikes. The assertion is based on an analysis by Dr. Nicholas Hill, an antitrust expert, who found that the merger would result in anti-competitive conditions in 1,922 supermarket markets. Despite Kroger’s promises to lower prices and improve salaries, the FTC argued that these pledges are unenforceable and could easily be broken to maximize profits.

The FTC’s analysis further emphasized that traditional supermarkets like Kroger and Albertsons offer a unique one-stop shopping experience with services such as pharmacies and deli counters, which competitors like Walmart or dollar stores cannot fully replicate. Even with alternative stores available, the FTC contended that customers’ specific shopping needs, such as buying a particular mix of groceries, make supermarkets indispensable for many.

The FTC also expressed doubts about Kroger’s plan to divest nearly 600 stores to C&S Wholesale Grocers to maintain competition, calling it insufficient to offset the loss of competitive pressure. They highlighted that C&S has limited experience as a retailer and struggled with previous divestitures, including a significant decline in sales after purchasing Price Chopper/Tops stores in 2023.

As the decision from the federal case looms, the FTC continues to argue that the merger would likely harm consumers by increasing prices, limiting competition, and undermining the grocery market’s balance.