Supermarket Giants Kroger and Albertsons Announce $25 Billion Merger

Kroger (Cincinnati) announced Friday it reached an agreement to purchase rival grocery giant Albertsons (Boise, Idaho) for $24.6 billion.

If the consolidation is approved by regulators, the deal would merge the nation’s two-largest supermarket chains, resulting in a combined operation of 4950 stores and 710,000 workers. Kroger would become the third-largest retail chain in the U.S. by sales.

Kroger says it will invest $1.3 billion to enhance the customer experience in Albertsons stores. Additionally, it says the combined company expects to invest $1 billion to continue raising associate wages and comprehensive benefits.

Kroger operates 2750 grocery stores under roughly two dozen banners including Harris Teeter, Fred Meyer and King Soopers. Albertsons operates 2200 supermarkets under 20-plus banners including Safeway, Vons and Acme.

The purchase could give Kroger the needed scale to fend off competition from Amazon and Walmart.

Walmart, which has seen an increase in middle-class shoppers hit by inflation, earned $218 billion in grocery sales last year. Kroger and Albertsons totaled combined revenue of $209 billion.

The nonprofit American Economic Liberties Project criticized the merger as a “bad deal for consumers, workers and communities,” according to The New York Times.

“There is no reason to allow two of the biggest supermarket chains in the country to merge – especially with food prices already soaring,” Sarah Miller, the group’s Executive Director, said in a statement on Thursday.