America’s largest supermarket operator Kroger is in talks to buy rival Albertsons, with a deal expected to be announced as soon as today.

Albertsons supermarket exterior

Albertsons has more than 2,200 stores across the USA

The retailers have had informal talks over the possibility of a merger for years but discussions sped up this week after first being reported in the US by Bloomberg. 

A merger between Kroger, the largest US supermarket chain by store volume with nearly 2,800 stores, and Albertsons, which has more than 2,200 stores, could run into antitrust problems at a time of rising food inflation. 

A deal would see Kroger, which has a market value of $33bn, acquiring Albertsons, which hit a market capitalisation of $13.7bn. 

Despite the soaring valuations, traditional grocery chains such as Kroger and Albertsons have faced pressure in their home markets from the likes of Amazon, Walmart and Costco.

US antitrust authorities have also taken a tougher view on mergers and acquisitions since the Biden administration took office and US consumer groups are calling for any deal to be blocked.

“There is no reason to allow two of the biggest supermarket chains in the country to merge — especially with food prices already soaring,” Sarah Miller, executive director of the American Economic Liberties Project, told the Financial Times

“With 60% of grocery sales concentrated among just five national chains, a Kroger-Albertsons deal would squeeze consumers already struggling to afford food, crush workers fighting for fair wages and destroy independent, community stores. This merger is a cut-and-dry case of monopoly power and enforcers should block it.”

The news has seen Ocado shares jump 10% in the UK, as Kroger is one of the pureplay grocer’s largest international technology platform clients.

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