Smith’s Owner To Buy Albertson’s, Vons — What Does It Mean For You?
Las Vegas residents may soon find that their shopping choices are extremely limited, as the two largest grocery store chains in the United States, Kroger, owner of Smith’s and Albertson’s, owner of Vons, have announced their plans to merge. The blockbuster deal is valued at nearly $25 billion.
How is this allowed?
The merger will see Smith’s, Albertson’s and Vons join under one corporate umbrella. Both companies are already the two largest “pure play” grocery store corporations, and together they’ll create a grocery store chain that is second only to Walmart.
US Grocers By Share Of Dollars Spent in 2021 via Numerator
- Walmart – 18%
- Kroger – 8.8%
- Costco – 6.4%
- Albertson’s – 4.7%
- Ahold Delhaize – 4.3%
Nationwide, the new company will have about 12% market share, but on a micro level, communities like Las Vegas will be absolutely dominated by the new corporation. Federal anti-trust laws will probably have an issue with the partnership. That means the new company will likely spin off several stores in order to resolve issues like the one below, where a Smith’s and a Vons are right across the street from one another.
What does this mean for me?
Long story short: probably less options. In order to comply with anti-trust, several locations will either go to another brand that enters or expands in the valley, or the location will quite possibly go vacant. Grocery stores are often the “anchor stores” of a strip mall, much like they are for malls. If an anchor store goes and isn’t replaced, the entire shopping center is at risk.
With some locations closing, if you are attached to the brand of your choice, you may have to travel farther. Of course, With less competition, there’s fewer brands to compete with on price.
Nearly all of us shop at one of these three brands, so this is a merger that is sure to affect each and every one of us.
