The four biggest grocery store chains in San Diego may soon be under one controlling company by the end of 2024. San Diego County, with a population of around 3.5 million residents currently has four major grocery stores. Ralph’s and Food for Less are owned by Kroger. Von’s and Albertsons owned by Albertson would be acquired by Cincinnati-based Kroger.
In October 2022, Kroger announced a proposed acquisition of Albertsons. The $25 billion takeover rival Albertsons would be one of the largest mergers affecting nearly 5,000 stores nationwide.
While some recent mergers in tech and other industries sport larger dollar values, other numbers reveal the outsize impact of a Kroger-Albertsons combination. The more than 700,000 employees at both companies represent one out of six of all U.S. supermarket, supercenter, and warehouse club workers. The rivals’ combined $170 billion food sales are nearly a fifth of America’s $1 trillion grocery market.
The state attorney general for Washington filed a lawsuit seeking to shut down the merger. In the lawsuit, Internal chats by Albertsons’ executives revealed company officials doubted the legality of the deal and were skeptical of promises that it would lower prices for consumers. Meanwhile, Kroger said ongoing negotiations with federal and state regulators would delay the completion of the deal as late as mid-August. Before the Washington lawsuit and delay, court records in a California lawsuit revealed that federal regulators weren’t convinced of “the merits” of the deal. Records showed regulators, even after more than a year of scrutiny, were seeking more time to evaluate the deal and related divestiture plans.
Food prices continued to remain high since the COVID-19 pandemic outbreak in 2020, according to the US Bureau of Labor Statistics.
Inflation at supermarkets has soared 24.4%, which is about twice the inflation rate.
In September, Kroger and Albertsons unveiled a $1.9 billion plan to sell off 413 stores to Piggly Wiggly operator and franchiser C&S Wholesale Grocers. In a bid to show regulators that consumers will have other options, Kroger said it would also shed all its Marianno’s stores (In Chicago) and QFC stores (in the Pacific Northwest), while Albertsons will shed the Carr’s nameplate in Alaska.
Companies’ filings show the top 11 executives at Albertsons could collect almost $190 million in severance packages and other pay upon completion of the merger with Kroger. Albertsons CEO Vivek Sankaran alone could get between $30 million and $43 million in “golden parachute” and other pay.
This merger would consolidate almost all the major supermarkets in the San Diego County area which serves around 3.2 million residents. Kroger currently owns Ralphs and Food for Less, while Albertsons owns Von’s. The only major supermarket left would be Smart and Final which took over the stores left abandoned by Hagger’s in 2022.
