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10/17/2022
RL Pro Exclusive

Shock Waves in Aisle 8: How to Interpret the Kroger and Albertsons Merger

Elizabeth Lafontaine
Chief Retail Analyst, Retail Leader Pro
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Kroger Pickup

The Kroger acquisition of Albertsons is the latest in a long series of retail consolidations, but it has sent shock waves across the entire retail industry.

In the press conference following the announcement, Kroger CEO Rodney McMullen noted that the scale created by the merger can enable their combined banners to better service customers and provide them with elevated promotions, efficiencies, quality and, above all else, value. But, what does this mean for the broader retail industry, other grocery chains, manufacturers and the consumer? 

In an industry that faces providing value to shoppers against major economic headwinds, does consolidation provide a winning solution for all?

While I can only speculate on the implications of this $24.6 billion acquisition across the retail landscape, here are my thoughts on the potential trickle-down effect.

Through a competitive lens, the Kroger-Albertsons merger creates another major player in the grocery market to challenge the goliath multinational banners of Walmart, Amazon and Costco. Any outside specialty grocer posing a challenge to these brands is worth celebrating in the industry, as increased competition tends to breed positive impacts for consumers and industry innovation. It forces everyone to step up their game, and the consumer benefits greatly.

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