Get ready for higher food prices at your local supermarket!
Kroger Co. said it is buying rival Albertsons Cos Inc. in a deal that values the company at $24.6 billion, one of the biggest deals in the history of the grocery industry in the U.S.
That means that other than Walmart, Costco, and Trader Joe’s almost every food market in Los Angeles will be owned by Kroger. Smaller food chains are usually specialty stores that do not offer a complete choice of foods.
The effect is obvious. Less competition means higher prices. Jamie Court, president of Consumer Watchdog, a Santa Monica-based consumer advocacy group, called the proposed merger “a terrible idea. This would give too much market power to one big giant, especially in California,” Court said. “We would urge the administration to reject this merger.”
To overcome anticipated political and regulatory hurdles, Kroger and Albertsons said they would get rid of stores in markets where they overlap. The companies said they would spin off up to 375 Albertsons stores in a stand-alone public company or just close them. Or in other words less stores means less competition.
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