SAN DIEGO (KGTV) — Grocery giant Kroger (Ralphs, Food 4 Less in San Diego) announced it is buying Albertsons (also Vons), a merger which will bring together the largest grocery chains in San Diego.
Industry expert Miro Copic, a professor at San Diego State University, says the move will create some benefits for shoppers, but also could create some downside. The plus side comes from what Kroger will do with the money it can save as part of the deal.
“They’re going to see about $2 billion in cost savings out of this merger. And where they’re going to put it: half a billion is going to go to lowering prices,” Copic says.
However, because of the gigantic size of the merged company (55 stores in San Diego County alone) will lead federal regulators that have to review the deal to likely insist that Kroger divest some of the stores.
Copic says the company has already identified hundreds of potential stores across the country, with the San Diego market likely to be included. Copic says regulators will likely work to make sure locations in areas without many grocery options will be sold to a different grocer, as opposed to simply closing shop.
Copic also says Kroger has incentive to make that happen.
“They want to be good citizens in the community, and they don’t need protests in other stores if they’re closing a store in a low-income neighborhood, so they’re going to work really hard to get another grocer to come in,” Copic says.
Copic says that could create opportunities for other grocers; a national chain could look to enter the San Diego market. Copic also believes there could be a chance for smaller chains within the market to expand, such as Trader Joe's and Aldi. Additional opportunities could also be generated by small, local grocery stores.
“We’re not just selling groceries here. We’re trying to uplift our communities. And that is something that the large guys really cannot do as well as we do," said Rachel Shemirani, Vice President of Barons Market, which has nine locations in Southern California.
She encourages shoppers who may see their Ralphs, Vons, or Albertsons close or who may not like changes made to those stores to give their nearest local store a try.
“I say give a chance to your local, independent grocery store. We have quite a few in San Diego, us being one of them," Shemirani says. "To go in and really feel the difference and connection of your independent grocery store is super important.”
Because of the complexity of the deal and the amount of time it will take to get the necessary regulatory approvals, the merger is not expected to close until 2024.
