Deal could be announced this week, sources say
CINCINNATI — Kroger Co. is seeking to acquire Albertsons Cos. and could announce a deal this week, according to published reports.
Kroger is the nation’s top traditional grocery store operator, with almost 2,800 food stores operating under about 20 different banners, including Kroger, Ralphs, Dillons, Smith’s, King Soopers, Fry’s, QFC, City Market, Owen’s, Jay C, Pay Less, Baker’s, Gerbes, Harris Teeter, Pick ‘n Save, Metro Market, Mariano’s, Fred Meyer and Food 4 Less.
Albertsons Cos. ranks No. 2 among traditional supermarket chains, with almost 2,300 retail food and drug stores operating under 24 banners including Albertsons, Safeway, Vons, Jewel-Osco, Shaw’s, Acme, Tom Thumb, Randalls, United Supermarkets, Pavilions, Star Market, Haggen, Carrs, Kings Food Markets and Balducci’s Food Lovers Market.
Walmart is the largest food retailer in the United States by revenue, but some analysts suggest that a merger of the nation’s top two traditional grocery retailers would likely face regulatory scrutiny.
“Kroger’s acquisition of Albertsons would have a significant impact on the US grocery landscape, both in physical retail and online,” said Blake Droesch, senior analyst with the research firm Insider Intelligence. “Kroger would nearly double its locations and have a bigger brick-and-mortar footprint than Walmart. Walmart will still be the leader in grocery sales, but the acquisition would allow Kroger to get closer in competition.”
The move would also strengthen Kroger’s push into online grocery, Droesch added.
“On the digital side, Kroger can make use of Albertsons’ locations to drive click-and-collect growth, while Albertsons can leverage Kroger’s fulfillment infrastructure to bring its online capabilities in-house, instead of relying on third-parties like Instacart and DoorDash.”
Insider Intelligence projects that Kroger’s grocery sales will total $126.87 billion in 2022, accounting for 9% of U.S. grocery sales. That compares to total grocery sales of $62.82 billion, or 4.5% of U.S. grocery sales, for Albertsons.