With every merger and acquisition in the food industry, people’s choices when shopping are restricted even further. The competition from supercenters like Walmart and Target in the food industry have forced grocery chains to try to beef up their portfolios, leading to a massive merger mania in the past several years. There have been several high-profile mergers in 2015 alone, including the acquisition of Family Dollar by Dollar Tree and the merger of Ahold and Delhaize.
Kroger is the largest grocery store chain the United States (and second only to Walmart in retail grocery sales), with 2,625 supermarkets in 34 states nationwide. With the addition of Roundy’s four branded supermarkets, that total increases to 2,774 stores in 35 states. This is only the latest piece of Kroger’s aggressive takeover of many local supermarket chains – in May of this year, it acquired the Hiller’s chain in Detroit. Kroger’s stores operate under a multitude of names, meaning shoppers may not even know that different stores are operated under the same parent company.
With this merger, Kroger’s increased market share and fewer competitors means they have more power to increase prices. As reported in Food & Water Watch’s Grocery Goliaths report, many studies have shown that food prices rise as consolidation increases – and even the USDA recognizes that fact. Locally, consolidation is even more damaging as supposed competitors can coordinate pricing strategies. This means that local supermarkets mimic each other’s prices, making it nearly impossible for people to comparison shop.
Wisconsin shoppers are likely to see higher prices and fewer options from their grocers after the implementation of this merger. Local employees can also expect to see streamlining and possible job losses, as Kroger is known to eliminate excess during its mergers.
We need to put the brakes on these grocery store mergers. Take action and ask the Department of Justice to put a moratorium on all food industry mergers.