Kroger slips as FTC moves to block Albertsons takeover

Kroger Co (NYSE:KR, ETR:KOG) shares were hit on Monday as the US Federal Trade Commission (FTC) launched an attempt, alongside eight states, to block the supermarket chain’s takeover of Albertsons.

Such a merger could “eliminate fierce competition between Kroger and Albertsons,” according to the commission, prompting higher prices for millions of Americans.

Kroger’s US$24.6 billion bid to buy Albertsons was unveiled in October 2022, promising to create a supermarket empire consisting of over 4,000 stores.

However, the proposal has faced stubborn competition since, including over fears of job losses, store closures and a resultant lack of choice for consumers.

The FTC said it had launched a federal lawsuit against the merger on Monday as a result, with cost increases, in particular, a key focus given US food prices have climbed over 25% in the past four years.

Arizona, California, Illinois, Maryland, Nevada, New Mexico, Oregon and Wyoming are also involved in the lawsuit meanwhile, as per the FTC, alongside the District of Columbia.

Kroger argued that the case would only strengthen rivals’ dominance in the market, including Walmart and Costco, adding that it had cut prices every year since 2003.

However, the FTC warned the merged business could have ramifications for staff too, noting it “would have more leverage to impose subpar terms on union grocery workers that slow improvements to wages, worsen benefits, and potentially degrade working conditions”.

Kroger fell 1.7% to US$47.39.