From the grocery world.....

[gimmethesimplelife]

I'm hearing Kroger wants to buy out Albertson's/Safeway. I am against this because such would make one corporation have too much pricing power over a basic human need - food. What's your take? Rob

[bae]

How much of the market would the combined entity control?

[iris lilies]

Why would I care about this Rob?

[gimmethesimplelife]

Why would I care about this Rob?You don't find one corporation having that much pricing power over the cost of food a cause for concern? I sure do. Rob

[gimmethesimplelife]

How much of the market would the combined entity control?Bae, I'm not sure. Let me ask/poke around. It's a good/fair question. Rob

[bae]

You don't find one corporation having that much pricing power over the cost of food a cause for concern? I sure do. Rob

How much pricing power do they have?

What portion of the market would the combined entity control?

https://substackcdn.com/image/fetch/w_1456,c_limit,f_webp,q_auto:good,fl_progressive:s teep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F 305170a0-b9f4-4378-91c6-2b12be363f87_2472x3568.jpeg

[bae]

So, looks like they'd have 13.5% of the market. Hardly seems like monopoly pricing power to me.

If Subaru and Hyundai merged, they'd have about the same portion of the US auto market....

[iris lilies]

You don't find one corporation having that much pricing power over the cost of food a cause for concern? I sure do. Rob
I don’t think it’s as simple as you’re making it but the devils in the details and I don’t have interest in sussing them out. I think bae is asking you the questions that need to be answered before entirely accepting your conclusion.

[littlebittybobby]

Those chains, as large as they are, are still regional. Meaning, they have a lot of stores in particular areas. But, the grocery business is still very competitive. Yup. Thing is, our area has heavy Walmart presence, but there are several other smaller outfits that do a lot of business. Guess what? Those small outfits are serviced by one main regional wholesaler, and yet the prices vary greatly from one store to another companies' stores! Then, we have Aldis, which mostly handles house brands. Thing is, I go to various stores for various staples. See? So, I'm not an alarmist about this merger. We've had a Kroger subsidiary come and go, here, and also a string of Albertsons. We've even got Hy-Vee from I-wah, too. Yup. Wayyyy up in Alaska, Safeway had several stores where I lived. The Butcher Baker from Poky worked at one, for awhile. They had a locally-based competitor, Carrs' Markets, too. The Carr boy went to my school. He was voted "best dressed" and pictured in the 1969 yearbook wearing a 3-piece suit to high school. He later bought the old KENI radio studios, to make into a private residence. Anyway---at one point, after many years, Safeway left the Anchorage market. But then---years later, they acquired their former local competitor, Carrs. Change is constant in the retail grocery business. The nearby supermarket where I now live was built in 1988. Since then, the 3rd grocery retailer is occupying it at this time. So, no--I wouldn't holler fire and head for the exits on that merger. Big companies also divest, too. Only people who play in the stock markets and Food workers' unions should be paying close attention. Hope that helps you some. Thankk Mee.

[JaneV2.0]

Wait--so that includes Safeway stores? I maintain Kroger's trying to corner the neighborhood market sector, which doesn't bode well for local pricing. For some lucky consumers, there are alternatives like Aldi, Grocery Outlet, WinCo, and others.

[jp1]

I’m not an expert in this area but I tend to agree with Jane. Groceries are local. Walmart may have an outsize impact overall nationwide but there aren’t any Walmart grocery stores in my county at all so their impact on the cost of groceries in any store in my city is minimal. If the merger rob is mentioning will result in an entire metro area (or multiple metro areas) no longer having major competition then, yeah, prices will rise in those areas.

And since availability of grocery stores tends to decrease in lower income areas (the famed ‘food deserts’) it seems like reduced competition is more likely to negatively impact areas that already have less access to decent food stores furthering an existing problem.

[Rogar]

By my small regional sample size there was a day when Safeway and King Soopers were the primary grocery markets in medium and larger cities. I'd think they have lost a significant market share to the discount stores and smaller niche stores like Trader Joes. It seems like the discount stores have something for the bargain shoppers and the smaller niche stores are a better shopping experience with a little higher food quality, so it seems a wonder the big supermarkets have done as well as they have.

I think the large super market chains still have a dedicated customer base and the merger could take away some of their competitive nature, or it could give them some leverage to have better pricing and services.

[pinkytoe]

DH was in the grocery and food business for most of his career before retiring. He is of the opinion that it might be a good thing overall. As per usual with mergers, underperforming stores will be weeded out so low income areas may feel it the most. I miss HEB as they are very innovative compared to the Kroger/Albertson stores here in CO. I think groceries across the nation look to them for new ideas.

[gimmethesimplelife]

https://share.newsbreak.com/20yjn8gp

Here is an Arizona take on the merger. Rob

[sweetana3]

The article shows how each state is unique in the mix of stores. Indiana has a huge blend of Kroger, Walmart, Meijer as the big stores and all kinds of smaller ones like Safeway, Whole Foods, Trader Jo, Market District, etc. We even have super stores across the street from each other and the occasional set of three. Neighborhood stores in the inner city suffer but this is a sales, crime and employment issue. (Note: we even have new operators moving into the high income demographic areas this year.)

Saddest day was when Marsh Supermarkets finally closed all their stores. They were a staple all around Indy but could not compete with the big chains. They had a strong presence in many neighborhoods since the 1930s. The news later reported that Kroger manipulated the leases and ownerships of the buildings to keep other grocery stores from moving into the former Marsh locations with many still being shuttered even today. https://www.chicagotribune.com/business/ct-marsh-supermarkets-closing-bankruptcy-20181229-story.html

[Tradd]

In the Chicago area, Jewel is owned by Albertsons and Mariano’s, by Kroger. There are Kroger stores in IL, but they seem to be away from the Chicago area. Jewel seems to have the most stores in the Chicago area. They also have stores in IA and IN.

We also have Walmart, Meijer, Aldi, and some smaller chains like Fresh Market and the like. Plus we have TJ and WF.