Kroger, based in Cincinnati, Ohio, operates 2,800 stores in 35 states, including brands like Ralphs, Smith’s and Harris Teeter.The deal, likely to get heavy scrutiny from U.S. antitrust regulators -- especially at a time of high food price inflation -- is already causing a stir among Chicago area grocery shoppers, many of whom still feel the sting from when Chicago-area chain Dominick's stores closed.
The massive merger means the stores together would control a 13% slice of the country's grocery market. According to J.P. Morgan analyst Ken Goldman, a stronger combined company could possibly help tame food price inflation, since it would have more power to reject food producers’ price increases. The two chains combined have 34,000 private label products at various price points that compete directly with food manufacturers.
Kroger also said the combined stores would provide greater and faster access to fresh food, with a combined 66 distribution centers and 52 manufacturing plants. Together, the stores operate in 48 states and the District of Columbia. in September compared with last year, according to U.S. data released Thursday.
Albertsons was bought by a consortium of investors including Cerberus Capital Management, a private equity firm, in 2006. Cerberus helped finance Albertsons’ 2015 purchase of the Safeway grocery chain and attempted a failed merger with Rite Aid in 2018. Albertsons became a publicly traded company in 2020.
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