Despite companies' claim that a Kroger-Albertsons merger would lower costs and increase competitiveness, Federal Trade Commission (FTC) judges blocked the deal. The FTC stated that the proposed merger's reduction to competition could lead to higher prices and lower wages for consumers and workers.
The FTC called the decision a "major victory for the American people" and furthermore claimed that having Kroger and Albertsons continue to compete against each other will greatly benefit consumers and employees.
Unfortunately, market analysts suggest that the cancelled merger means other supermarket chains are less likely to achieve the enormous scale of competitive retailers like Walmart, Costco, or Amazon through mergers and acquisitions.
There is speculation that grocery prices were still set to rise regardless of the merger's outcome. A 2023 GAO report highlighted annual average grocery price increases of 2% from 2013 to 2022. Among the multitude of price-influencing factors the report identified were global conflict, animal and plant diseases, and labor shortages.
Interestingly, a 2012 FTC study found that grocery mergers had varied impacts on local price levels, with some communities experiencing price increases, and others seeing declines post-merger.
Following the failed deal, Kroger and Albertsons are individually focusing on the future. Albertsons has sued Kroger, alleging it did not do enough to satisfy regulators and secure merger approval. Conversely, Kroger dismissed the allegations as meritless.
Despite the back and forth, Kroger revealed a plan to continue its stock buybacks and invest in lower prices and higher wages for its employees. The company remains optimistic about its future despite the aborted merger attempt. Belgian retailer Delhaize late last month announced it had acquired a significant stake in Albertsons, suggesting the grocery industry's consolidation trend may continue, albeit after due antitrust regulatory scrutiny.