A bipartisan Senate panel on Tuesday expressed skepticism toward the planned merger of grocery-store chains Kroger Co. and Albertsons Cos., with lawmakers raising questions about the prospect of higher food prices, stifled competition and an expansion of so-called “food deserts” where supermarket access is scarce.
The merger agreement between Kroger KR, +1.06% and Albertsons ACI, +0.96% — a $24.6 billion deal struck in October that would create a company with nearly 5,000 stores — has landed after a year in which food prices have surged and inflation is coming off four-decade highs. The price increases, which also follow years of consolidation in the grocery industry, have padded grocery stores’ bottom lines and led to big investor payouts.
“Today the industry is larger, more complex and more competitive, with near endless opportunities and options of where and how to shop,” he said. “Customers purchase food everywhere from Walmart and Trader Joe’s to Costco and Aldi, to Dollar General, 7-Eleven, Walgreens and restaurants, for example.”
Sumit Sharma, a senior researcher at Consumer Reports, told lawmakers that the companies’ plans to lower prices weren’t a given. And he said store divestments don’t always work.
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