Two Large U.S. Supermarket Chains Are Merging

Kroger announced Friday that it plans to buy Albertsons in a nearly $25 billion deal that could change the US retail industry and impact how millions of customers buy their groceries, Nathaniel Meyersohn and Jordan Valinsky reported for CNN Business.

Photo Insert: The deal, which is expected to close in 2024, would combine two of the largest supermarket chains in the country and create one of its largest private employers.

The deal, which is expected to close in 2024, would combine two of the largest supermarket chains in the country and create one of its largest private employers. The two companies have a combined 710,000 workers – most of them unionized in an industry with low union rates – nearly 5,000 stores and more than $200 billion in sales.

The retail industry has consolidated in recent years, and merging would give the companies greater scale to fend off competition from Amazon, Walmart and other retail giants.

Traditional supermarkets have been pressured by these companies and others – discount chains such as Dollar General and Aldi, warehouse clubs like Costco, and online grocers.

The merger “accelerates our position as a more compelling alternative to larger and non-union competitors,” Kroger CEO Rodney McMullen said in a statement Friday.

If the deal is completed, it would be one of the largest mergers in US retail history – dwarfing Amazon’s acquisition of Whole Foods in 2017 for $13.7 billion. The company would become the third-largest retail chain in America by sales.

Its combined market share in the $1.4 trillion grocery industry would be 13.5%, according to Morgan Stanley, making it the second largest grocer behind Walmart’s 15.5% share.

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