Posted by Emma Kelly.
As a sophomore Finance major, how businesses interact has always interested me, especially mergers and why they occur. This article, in essence, is all about the merger that is supposed to happen between Kroger and Albertsons, two grocery stores. Many people, including the U.S. Federal Trade Commission, oppose this merger because it would cause prices to increase, but wages to decrease. However, Kroger disagrees, “Kroger said in a statement that blocking the deal ‘will actually harm the very people the FTC purports to serve: America’s consumers and workers’.” Based on Kroger’s and Albertsons’ decision to try and continue the merger, the FTC is suing to block the merger. Behind this lawsuit are attorneys from Arizona, California, Washington D.C., Illinois, Maryland, Nevada, New Mexico, Oregon, and Wyoming. If the merger were to happen, it would create one of the largest grocers in the country.
The reasoning behind the FTC’s lawsuit to block the merger is that “Kroger’s acquisition of Albertsons would lead to additional grocery price hikes for everyday goods, further exacerbating the financial strain consumers across the country face today.” As American citizens, we know that monopolies and oligopolies are not always the way to run things. If this merger occurred, there would be fewer grocery stores, allowing stores like Walmart, Amazon, and Costco to grow even more. If they grow and continue an oligopoly, there will be continued price rises and less worker satisfaction because the companies have so much pricing power. Now, more than ever, the ability to buy groceries has become increasingly difficult for Americans with rising prices and inflation, but steady wages. I believe that the FTC’s decision to block this merger is the right thing to do.
Overall, this article is about why the FTC is suing to block the merger between Kroger and Albertsons and why Kroger and Albertsons believe this merger should happen. If the FTC cannot block this merger, Kroger and Albertsons must be cautious not to cause prices to increase and wages to decrease. If this occurs, it may benefit the company more, but not the people. The people who shop in Kroger and Albertsons keep it up and running, but increasing prices too much would deter customers from going there. In order for this merger to be successful, they must keep an ample number of stores open and maintain steady wages and prices.
Emma is a finance major at the Stillman School of Business, Seton Hall University.
https://www.cnbc.com/2024/02/26/ftc-sues-to-block-kroger-albertsons-grocery-store-merger