Grocery giants Albertsons Companies and Kroger are in talks to merge in a deal that could be announced as early as Friday, four people familiar with the plans said.If the merger were to take place, it would be one of the largest companies in the industry in a year.
The officials requested anonymity because the talks are confidential. Kroger and the Albertsons did not immediately respond to requests for comment.
If the deal goes through, it could create a mega-supermarket with more than 4,000 stores across the United States. Regulators have focused on the potential power of large companies to influence prices at a time when inflation is pushing up the prices of food and other commodities.
The story of a possible deal was previously bloomberg.
Based in Cincinnati, Kroger operates 2,750 grocery stores nationwide under flags such as Ralphs, Dillons and Harris Teeter. Albertsons operates 2,200 supermarkets under names such as Albertsons, Safeway and Vons.
Grocery stores have performed well during the pandemic as stay-at-home consumers stocked up on food, but have recently faced pressure amid supply chain challenges and rapidly rising food costs. Grocery chains must balance the relationship between consumer brands selling their products through stores and shoppers looking to save money under pressure from inflation.
The increased scale will give the Albertsons-Kroger partnership greater bargaining power with suppliers compared to other industry giants such as Amazon, which owns Walmart and Whole Foods Market.
“Customers continue to adjust their shopping habits in response to ongoing inflation,” Kroger Chief Executive William Rodney McMullen told analysts on the company’s quarterly earnings call last month. . “Our customers are looking for ways to save and we are there for them.”
Still, the grocery trade has a rocky track record. In 2015, the Federal Trade Commission demanded Albertsons and Safeway. $9 billion deal, Sell 100 or more stores before the deal goes through clearance.The grocer, Haggen, who later acquired those stores filing for bankruptcy.