As grocery giants Kroger and Albertsons push to carry out the largest proposed supermarket merger in U.S. history, the companies' executives have made a contentious claim. Joining forces, they say, will push food prices down, not drive them up as U.S. regulators argue will happen if the deal is allowed to go through. 'The day that we merge is the day that we will begin lowering prices,' Kroger Chief Executive Rodney McMullen said in a federal court hearing this week.
While 'competition can be quite important in driving food prices at grocery stores,' he said, measuring exactly how big of a role it plays in a particular area is 'sort of tricky.' In its lawsuit challenging the merger, the FTC said people prefer to shop near where they live or work and so supermarket competition dynamics play out locally. Grocery store mergers in major cities with a lot of competitors such as San Francisco, New York and Philidelphia have led to reduced prices.