Grocery chains are bigger than ever. Here’s a look at the market.
Tom Thumb in Plano, Texas. Star Market in Dorchester, Massachusetts. Pavilions in Newport Beach, California. Jewel-Osco in Arlington Heights. What do these regional grocery chains have in common? They’re all owned by Albertsons, the Boise, Idaho-based company with more than 2,200 locations under about two dozen banners.
Over the past three decades, the traditional supermarket industry shrank as a handful of big-name grocers acquired their smaller local and regional rivals. Now Walmart, Kroger, Aldi (Süd) and Albertsons own a third of all U.S. grocery stores locations, according to a Washington Post analysis of OpenStreetMap location data.
But the marquee companies could further concentrate their dominance: A federal judge in Portland, Oregon, is deciding whether Kroger and Albertsons can proceed with a merger in what would be the biggest supermarket matchup in U.S. history.
Walmart — which has more locations than any other grocer — dominates the middle of the country. Nationwide, about 90% of Americans live within 10 miles of a store. Albertsons sweeps the Northwest, and Kroger dots the mountain states and the Ohio Valley region. Some smaller companies take hold in coastal areas: Publix (and its famous ‘Pub Subs’) reigns supreme in Florida; H-E-B is most popular in parts of its home state of Texas; while Ahold Delhaize, a Dutch company, owns the Food Lion, Giant Food and Stop & Shop chains throughout the East Coast.
But the map could shift as a judge deliberates on pausing the Kroger-Albertsons merger, which would expand Kroger’s store count from more than 2,700 to about 4,400. Kroger attorneys said a halt would effectively end the deal, which was announced in 2022.
When looking at the share of dollars spent, supermarket ownership is even more concentrated.
Costco, despite having relatively few stores, accounted for 9% of the U.S. grocery market in 2023, according to a report from financial advisory firm Solomon Partners. Amazon, the e-commence giant that owns Whole Foods, was responsible for 6% of all grocery sales in the country last year, but has far fewer physical locations than its competitors. (Amazon founder Jeff Bezos owns The Washington Post.) In 2023, just three corporations — Walmart, Kroger and Costco — generated about half the $1 trillion in U.S. grocery sales.
That concentration in grocery sales is one of the reasons the Federal Trade Commission, joined by eight states and the District of Columbia, wants to block the $24.6 billion Kroger-Albertsons deal. (Colorado and Washington also filed separate lawsuits.) Regulators argue that fewer grocery retailers means less competition and, in turn, less incentive for companies to lower prices, which have jumped more than 21% since August 2020. Since the pandemic, the major national chains have been operating at the highest profit margins on groceries in two decades, the White House Council of Economic Advisers said earlier this year.
Kroger has pledged to invest $1 billion to lower prices if the merger goes through. The Cincinnati-based company also says a union with Albertsons will allow it to better compete with supercenters like Walmart, dollar stores, value retailers and online rivals, which are undercutting them on prices.
“There has been a tectonic shift in the grocery market over the last 10 years,” Kroger attorney Matt Wolf said in opening arguments last month. The merger will allow the company “to benefit from scale, to benefit from savings, and to pass that along to customers.”
In a statement to The Post, a Kroger spokesperson said if the merger is blocked “grocery prices will be higher and the larger, nonunion retailers Walmart, Costco and Amazon will become even more powerful and unaccountable.”
To ease overlap in some regions, the companies also plans to sell 579 stores to C&S Wholesalers, which supplies independent grocery stores and owns about two dozen supermarkets under the Piggly Wiggly and Grand Union banners.
Still, grocery competition is local, said Kevin Arquit, an antitrust lawyer at Quinn Emanuel and a former general counsel at the FTC. People prefer to shop close to home, and not everyone has a wide selection of stores nearby.
The Kroger-Albertsons merger raises the possibility some consumers will have no choice but to pay higher prices if all — or the majority — of stores in their area are owned by the same company, Susan Musser, the FTC’s chief trial counsel for the case said in opening arguments last month in Portland.
“If a shopper in Portland is faced with higher prices, they can’t practically go somewhere in Eugene,” she said, referring to the Oregon cities that are more than 100 miles apart. This means “less choices for customers and more power for the merging firms.”