The deal is likely to draw intense scrutiny from federal regulators and critics as it would form a new supermarket colossus at a time of soaring food costs.Kroger is the largest supermarket operator in the U.S., with 420,000 employees and more than 2,700 stores, including Ralphs, Harris Teeter, Fred Meyer, and King Soopers. Albertsons is the country's second-largest supermarket company, with 290,000 employees and almost 2,300 stores, including Safeway and Vons.
The two overlap in several markets, largely in the western part of the country. Their tie-up would involve spinning off up to 375 stores into a separate company, the companies said., Kroger said it would"reinvest approximately half a billion dollars of cost savings from synergies to reduce prices for customers" and invest $1 billion to raise wages and benefits for workers.
For both companies, Walmart is a key competitor, as a nationwide big-box giant that sells more groceries than Kroger and Albertsons combined. The two also face competitions from Costco as well as Amazon, with its online delivery reach, and lately, dollar stores, the fastest-growing segment of U.S. retail.
"So there's likely to be a difficult passage through the review by the FTC," he said." It does not mean that the FTC is absolutely destined to prevail if it decides to go to court and challenge the deal." For many years, Kroger, Albertsons and Safeway were the leading standalone grocery chains, prominent in different parts of the country.
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