US Government Sues to Block Largest Supermarket Merger in History

The Federal Trade Commission on Monday sued to block the $25 billion deal between Kroger and Albertsons, alleging the largest supermarket merger in US history would lead to higher prices, store closures and job losses.

The merger, announced in 2022, sought to combine the fifth and tenth largest retailers in the country. The companies own dozens of chains, including Safeway, Vons, Harris Teeter and Fred Meyer.

But the proposed merger came as food prices have skyrocketed. Americans are spending 26% more on groceries since 2020, according to the Bureau of Labor Statistics, and the highest portion of their income on food than any point over the past 30 years.

The FTC, in a statement, said the merger would eliminate competition in the grocery industry, which could drive costs even higher.

Kroger (KR) and Albertsons, which both employ mostly unionized workforces, said they wanted to merge to be more competitive against non-union giants such as Walmart, Amazon and Costco. The grocers are also facing increased pressure from Aldi, the fast-growing German discount supermarket chain.

The merger would accelerate “our position as a more compelling alternative to larger and non-union competitors,” Kroger CEO Rodney McMullen said when the deal was announced.

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