During 2023, our Co-op signed up to join a coalition of over 100 labor groups, community groups, and grocery stores nationwide who were organizing against a gigantic merger between the two largest supermarket chains in North America; Kroger and Albertsons. The summer of 2024 witnessed a huge wave of commitment on the part of local activists and organizers, as marches and sit-ins happened in front of multiple state courthouses. The organizing committee, run by Tom Geiger, the Special Programs Director of UFCW (United Food & Commercial Workers International Union) 3000, kept us updated as to the merger’s progression in court, on a monthly basis. I was not optimistic. Since the pandemic, the American food industry has seen dangerously high rates of consolidation. Big, private companies’ wins have been endless. Surprisingly, on December 10th, 2024, two different judges blocked the $24.6 billion dollar merger from occurring. Albertsons followed-up the ruling by filing against Kroger, blaming Kroger for not winning in court. The prevention of the merger was made possible not only by the support of hundreds of unions and community-owned / independent grocery stores, but by the FTC (Federal Trade Commission), who called upon the Clayton Antitrust Act of 1914 which prohibits any merger or acquisition which will drastically lessen industry competition. The prevention of the Kroger-Albertsons merger is a boon for the future of independent grocery. But as individual shoppers, why should you all care about these grocery-industry specific court cases? If you’re a Marylander or a DC resident, you’re probably thinking, “I don’t even shop at Kroger or Albertsons. How does this affect me?” The American government’s refusal to move forward with this merger illustrates how important healthy competition is to our economy, our work force, the diversity of food we eat, and the amount of money we spend on food. To learn about the failure of this merger is to become educated on why local and independent food production is freedom, and is an inherent threat to American corporatocracy.
Kroger and Albertsons both spent over $1 billion on lawyers and consultants to pursue the merger, according to securities filings. This is because this merger, if it had been successful, would’ve been the largest grocery merger in U.S. history. Kroger employs more than 430,000 workers in 35 states (65% of them union), with over 2,700 stores divided among more than 20 ‘banners’, including the supermarket Kroger, Fred Meyer, QFC, Harris Teeter, Vitacost, Food 4 Less, Ralph’s, Home Chef, and Dillons’. Kroger has also recently begun operating standalone fuel centers under the name ‘Supermarket Petroleum Group’. Albertsons employs 285,000 workers in 34 states (70% of them union), with 2,269 stores among another 20 ‘banners’, including the supermarket Albertsons, Safeway, Haggen, Acme Markets, Balduccis’, Kings Food Markets, Shaw’s, United Supermarkets, and Von’s. The diverse umbrella of supermarkets owned and controlled by both grocery corporations were acquired through decades of consolidation; Safeway was locally owned and operated for years until it was purchased by Albertsons in 2014. Large consolidations create monopolistic markets and lead to lessened competition, and Walmart has set the standard for this kind of cutthroat business in the American grocery marketplace. The expanding influence of supercenters and warehouse clubs like Walmart and Costco have influenced the rest of the grocery industry, leading other corporations to try and emulate Walmart’s ‘business success’ in gaining control over the American marketplace. As Food and Water watch writes, “Walmart grew from opening its first supercenter selling groceries in 1988 to capturing $1 out of every $3 spent at grocery retailers today. Walmart’s strategy of race-to-bottom prices squeezed out many smaller grocers and other local retailers. Larger supermarket chains responded to Walmart’s threat by expanding their own market presence, primarily through purchasing regional chains while retaining the original store brand.” The acquisition business model has resulted in a steep decline in the number of grocery stores, a roughly 30 percent loss from 1994 to 2019. The trend is toward fewer stores, and much larger stores. 4 corporations control 69% of the total American grocery market; Walmart (34.8%), Kroger (13.9%), Costco (12.2%) and Albertsons Companies (8.1%). All other grocery only represents 31% of the market.
Caring about market concentration is caring about the local economy – it’s caring about the cost of living in the area in which you live, the quality of life, the kind of jobs that are available, and the diversity of products of which you can purchase. New, big box retailers drive smaller grocers out of business by squeezing costs from their private supply chains and price-gouging. Often, after all of the other small retailers that surround a big box grocer go out of business, the big box grocery will re-inflate its prices even higher than the original grocery prices were in the area. Small, independent retailers have a net positive impact on local economies. The loss of independent businesses in local economies can lower local wages, and has historically led to lower wages in the retail industry overall. The FTC analyzed grocery mergers and discovered that after a large acquisition, the overall price of food will rise. As Food and Water watch writes, “Concentration in the broader agribusiness sector can also reduce efficiency and growth while increasing economic inequality. Simply put, market power enables intermediaries like retailers and processors to capture an ever-growing share of food dollars, at the expense of farmers, food chain workers and eaters.” Higher levels of consolidation also give big corporations more power to set prices and increase the likelihood of price fixing and market manipulation – large food corporations are reporting their largest profit margins in over 60 years. This comes from privatized supply chains, oligarchic control of the grocery shelves (Kraft/Heinz, Conagra, General Mills, and the Campbell Soup Company account for more than 40 percent of American grocery sales), underpaying workers, and overpaying executives.
Where is the hope for change? You guessed it – grocery cooperatives, food hubs, and local food processors. Co-operatives enable employees and communities to share profits and shape decisions, while placing emphasis on buying from local farms and local food producers. Food hubs connect regional farmers through focusing on Community Supported Agriculture (CSA) programs, selling to schools as vendors, and selling to independent and locally-owned grocery stores (like co-ops) as primary vendors. Local food processors, like the Common Grain Alliance, are working to bring together millers, bakers, brewers and local grain farmers to simplify production. In the ‘trust-busting’ era of the early 20th century, the U.S. government took action against anticompetitive practices. The new era of the FTC might not be as vigilant. Responsibility is falling to grocery buyers, and knowledge will be helpful in the purchasing process. As consumers and shoppers, I advise you to pay attention to where your grocery dollars go. Is your favorite product a product you can buy from every grocery store? Is it cheaper at other grocery stores? How is it so widely prevalent? Why is the price different at different retailers? How far did a product travel to make it to your grocery shelves? These are all questions that require shoppers to care about food past the simplicity of purchasing – if you’re down to become this invested in learning about the economics of your grocery shopping, I have a business agreement that would probably make a lot of sense to you…becoming an owner of a co-operatively owned community healthy foods store.
Thanks for reading. Shop co-op! There are definitely more reasons to shop here other than the fact that we carry your fave local kombucha. Us carrying that kombucha, though, is indicative of our larger commitment to supporting local economy and supporting healthy, local competition. Thank you to Tom Geiger for so successfully organizing hundreds of co-ops and independent grocers across the nation, and thanks to our grocery co-op comrades everywhere. Onward and upward.
-Chloe Thompson, Community Engagement Manager @ TPSS Co-op
Sources
- McIntosh, Don, and Don McIntosh. “Kroger-Albertsons Merger Collapses – NW Labor Press.” NW Labor Press, 19 Dec. 2024, nwlaborpress.org/2024/12/kroger-albertsons-merger-collapses/. Accessed 11 Jan. 2025.
- Kelloway, Claire. “U.S. Food Prices Are Up. How Monopoly Power Makes This Worse.” Time, 14 Jan. 2022, time.com/6139127/u-s-food-prices-monopoly/.
- The Economic Cost of Food Monopolies: The Grocery Cartels. Food & Water Watch.
- Wikipedia Contributors. “Albertsons.” Wikipedia, Wikimedia Foundation, 9 Nov. 2019, en.wikipedia.org/wiki/Albertsons.
- Wikipedia Contributors. “Kroger.” Wikipedia, Wikimedia Foundation, 3 Sept. 2019, en.wikipedia.org/wiki/Kroger.
- UFCW 3000. “UFCW 3000.” UFCW 3000, 4 Mar. 2024, ufcw3000.org/news/2024/3/4/update-on-efforts-to-oppose-the-proposed-kroger-albertsons-mega-merger. Accessed 11 – 13 Jan. 2025.