In 2024, Kroger and Albertsons Are Far from Being a ‘Grocery Monopoly’

According to Scott Moses, a partner and head of grocery, pharmacy, and restaurants investment banking at Solomon Partners, the grocery market today is vastly different from decades ago. He notes that the landscape has evolved with increased competition, convenience, and price transparency, particularly with the rise of online grocery shopping, which allows consumers to price-check without visiting multiple stores.

In discussing the slight increase in grocery food prices observed in July, Moses points out that in 2024, the grocery market is highly competitive, with consumers regularly shopping at five different grocery retailers. Despite the ongoing Federal Trade Commission (FTC) case against the Kroger and Albertsons merger, the claim that these two chains are the dominant players in many markets is misleading. The FTC’s market definition excludes significant players like Walmart, Costco, Lidl, Aldi/Trader Joe’s, and Amazon/Whole Foods, who dominate the sector globally and in the U.S.

While the slight increase in grocery food prices observed in July indicates a steady, minimal rise, Moses argues that the intense competition in the grocery sector from discount giants like Walmart and Costco, which collectively hold a 66% U.S. grocery market share, challenges the FTC’s notion of a monopoly. He emphasizes that these discount retailers, with their global reach and diversified product offerings, have transformed the U.S. grocery landscape, with supermarket grocers like Kroger and Albertsons losing significant market share over the last 20 years.

Moses also points out the need for grocery price stability and strategic mergers to help traditional grocers compete against the rising power of these global chains. The merger between Kroger and Albertsons, he suggests, could help lower prices and improve union jobs, thereby providing a competitive edge in the ever-evolving grocery market.