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If Kroger, Albertsons merger happened today, nearly half of grocers in Denver would be owned by one company

Posted at 5:57 PM, Oct 14, 2022
and last updated 2022-10-15 00:21:47-04

DENVER — If the merger between two of the nations largest supermarkets happened today, nearly half of all grocery stores in Denver would be under one big company.

Kroger, the parent company of King Soopers, announced their $26 billion-dollar dealto purchase Albertsons, Safeway's parent company, on Friday. The deal is expected to close in 2024.

The grocers are the largest in Colorado, which in 2021 represented more than 44% of the market share in Denver.

Denver resident Hobert Herman shops at both grocery stores, specifically off 14th and Krameria, where a King Soopers and Safeway are right across the street from each other.

"Whoever's got the best deals ... is good with me," Herman said.

But, that type of competition is likely to end after the merger, according to Metropolitan State University Economics Professor Kishore Kulkarni.

"I think there will be some stores closing, especially when the two stores are very, very close to each other. It wouldn't make sense to have those," Kulkarni said. "After the merger, consumers will obviously lose the variety of consumption. They will not have different things to compare and find out which one they like better. There is going to be some uniform sales going on."

The companies plan to sell off nearly 400 locations in order to secure antitrust clearance, but Kulkarni points out, they would still remain a powerhouse in Colorado.

"I think Glasgow and Walmart will definitely be watching this, because that is an added competition for them. King Soopers is now going to be as big as Walmart in the grocery business [in Colorado]," Kulkarni said.

According to the Associated Press, the merger means the stores would account for 13% of the U.S. grocery market, putting them behind Walmart's 22% share, but well above Amazon and Costco warehouse stores.

So what does this mean for consumers?

"There is definitely no right answer on who wins and who loses," Kulkarni said. "Both can happen. Consumers can win, consumers can lose. Everything depends on how they pass on the lower cost of production, which they will now get to because of their higher production and that reduction in cost can be passed on to the consumers," Kulkarni said.

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