The Federal Trade Commission (FTC) has intensified its challenge to the Kroger-Albertsons merger, presenting it as a critical issue for consumers and fair competition. To mitigate antitrust concerns, Kroger and Albertsons initially proposed spinning off 400 stores to a third party, later raising this number to nearly 600. The buyer, C&S Wholesale Grocers, a New Hampshire-based supplier to independent supermarkets, currently operates around two dozen stores—a scale that the FTC suggests is insufficient to manage such a large acquisition effectively.
The FTC’s pretrial brief argues that C&S’s retail experience is limited, and taking on hundreds of new stores across various regions, as well as nearly 150 fuel centers and 500 pharmacies, could create operational and logistical issues. “Expansion of this magnitude carries an inherent risk of failure, as the company will need to learn how to scale up quickly across a wide range of unfamiliar geographies in a customer-facing business,” the FTC stated.
The FTC further bolstered its case by citing C&S’s past performance with store divestitures, specifically the 2021 merger of Tops Friendly Markets and Price Chopper/Market 32, which saw C&S acquiring 12 Tops stores in New York. Although C&S rebranded these stores, the FTC noted that it “struggled as a divestiture buyer,” casting doubt on its ability to handle nearly 600 stores nationwide. The FTC expressed concerns that, if C&S fails to maintain these stores effectively, consumers may experience reduced access to grocery options, creating potential “retail deserts” that harm communities.
Despite these challenges, Kroger, Albertsons, and C&S assert that their divestiture plan will meet regulatory demands. However, the FTC’s skepticism signals that the merger, far from being a straightforward transaction, will require stronger evidence that it serves consumer interests rather than jeopardizing market competition and access to essential goods.
