Prices, jobs, access to groceries: What’s at stake as the FTC tries to kill the Kroger-Albertsons merger

The Biden administration’s move Monday to try to block the $24.6 billion deal to combine Kroger and Albertsons supermarket chains came as no surprise. This White House has launched some of the most aggressive antitrust policies in living memory.

The Federal Trade Commission’s lawsuit holds big stakes for the grocery industry, millions of shoppers and hundreds of thousands of store workers. Yet there’s plenty of debate over who has the stronger case — the companies or the regulators — and how the battle will shake out.

“The FTC’s position that Kroger and Albertsons currently compete with each other, and that keeps prices lower — this is the first time that we’re really hearing that,” said Phil Lempert, a food industry analyst and founder of SupermarketGuru.com.

These are a few of the factors hanging in the balance.

Grocery prices

The two companies and the FTC have opposite predictions for what would happen to grocery prices if Kroger is allowed to buy Albertsons.

Federal regulators say the merger would “eliminate fierce competition” between the two chains, reducing the need to keep prices low to lure in shoppers. The FTC alleged one executive involved in the proposed deal described it as “basically creating a monopoly” in the market.

Kroger and Albertsons insist a combined company could better vie with big rivals in pressing suppliers for the best deals, then pass the value on to customers. Kroger said in a statement Monday that it’s committed to investing $500 million on cost reductions as soon as the merger closes, and cited its “long track record of reducing prices every year, with $5 billion invested to lower prices since 2003.”

Neil Saunders, managing director of the retail consultancy GlobalData, is skeptical of the