Supply “Chain” Issue
Would a grocery chain merger mean less selection, fewer stores and longer drives?
Last fall, Kroger announced it agreed to purchase Albertsons in a $ 24.6 billion supermarket merger — a move that would have nationwide impacts on consumers. In Colorado, Kroger operates 148 King Soopers and City Market stores. Albertsons operates 105 Safeway and Albertsons stores. The vast majority of Coloradans shop at these stores for their weekly groceries, and so this proposed merger could have significant consequences for consumers in our state.
This proposed merger is now under review by state attorneys general and the Federal Trade Commission to ensure that it does not violate the antitrust laws, which protect competition in the marketplace, and the affordability and quality of products and services. At the Colorado Attorney General’s Office, we must determine if this grocery merger would unlawfully harm our state’s consumers, workers, farmers or suppliers.
That’s why we’re asking the public for input on what this merger would mean for them. My office is already hearing from shoppers, retail workers, farmers, food manufacturers, and others from around our state who are directly affected by the proposed merger. They are worried about whether their local grocery store will stay open, whether their jobs are at risk, whether food prices will rise, and more.
In communities throughout Colorado, these grocery stores compete headtohead for the same customers. And, in some rural communities, customers must drive an hour or more to buy their groceries. In Gunnison, for example, where consumers travel from as far as Lake City to buy groceries, there are only two options for fresh milk, fruits and vegetables, or meat — the local City Market or Safeway.
At a town hall recently, Gunnison residents told me that the presence of the two stores provides not only competition on prices and additional choices, but also a level of resilience. Stated simply, if the supply chain for one store’s access to eggs is interrupted, they have another option.
There are also working- class and lowincome neighborhoods in suburban and urban parts of the state that have few or no options to shop for food — often called “food deserts.” Independent and smaller grocers can provide some basic food needs, but families often spend a lot of time and money traveling long distances for better selection and prices.
This creates stresses and strains for families, and they have good reasons to be concerned about store closures due to the merger.
For workers, if this proposed merger results in stores closing, that means job losses and lower wages. For those already struggling to make ends meet, the prospects of unemployment or facing cuts to their pension is alarming. We are committed to hearing out and carefully evaluating the questions raised by grocery workers.
At a time of increasing consolidation in our economy, we should all be worried whether redundant supply chains are eliminated and whether suppliers have adequate options for selling their
goods. For farmers selling produce or entrepreneurs looking for shelf space, for example, consolidation in the grocery store industry may make it harder for them to compete. As we analyze this merger, the impact on farmers and small businesses will be top of mind.
As we conduct this review, the core question is whether this merger violates antitrust laws. If the Attorney General’s Office concludes that the proposed merger is illegal, Colorado would have the opportunity— and the obligation to Coloradans— to go to court to stop it.
It’s hard to imagine a corporate merger that will impact Coloradans on a daily basis more than this one. And with inflation driving up the cost of many household staples, consumers voices deserve to be heard. My office is committed to hearing out their concerns— and holding public forums across our state. Coloradans can provide feedback by attending one of the community forums or filling out our survey.
This input will enable our review to be thorough, rigorous, and fair, ensuring that Coloradans are not harmed by this proposed merger.