A Supermarket Megamerger Will Redefine What You Buy At The Grocery Store

By Jaewon Kang, The Wall Street Journal

Kroger and Albertsons want to merge in a $20 billion deal. If antitrust regulators approve, the definition of a grocery store grows further.

As the country’s two biggest supermarket chains envision the future of their planned megamerger, you’ll be able to purchase groceries, a coffee, patio furniture, and your allergy medicine prescription. The store deduces you might also like a humidifier to help the sneezes and some local honey, all of which it has ready for you. At dinnertime, order in sushi, which was made by a kitchen owned by the supermarket. 

When Kroger Co. KR -0.32%decrease; red down pointing triangle agreed to buy Albertsons ACI -0.10%decrease; red down pointing triangle Cos. for about $20 billion in October last year, it marked a milestone in the quest to invent the modern supermarket by rethinking what shoppers could buy while they pick up milk and meat for the week’s meals. 

“You used to make money selling a can of corn,” said Rodney McMullen, Kroger’s chief executive, who started at the company in 1978 as a part-time bagger. Now, he said, “you have to figure out other ways of creating value for the customer.”

Just what this new emporium will look like is at the center of the Federal Trade Commission’s antitrust review, and central to any potential battle will be the shape-shifting definition of the markets in which Kroger and Albertsons are competing. Regulators are examining the possible combined company’s impact on grocery markets around the country as well as specific areas like online delivery, digital advertising and pharmacy operations, said people familiar with the matter. 

Kroger executives said this month they are cooperating with regulators and that the deal is on track to close in early 2024. An FTC spokesman declined to comment. 

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