Is It Time to Keep a Bad Idea From the Public? Albertsons vs. Kroger

When Kroger and Albertsons agreed to a $24.6 billion merger in 2022, the companies framed it as a scale-driven solution to inflation, competition from Walmart and Amazon, and a rapidly changing food retail landscape. Two years later, the deal collapsed under Federal Trade Commission scrutiny—and now, in 2026, both companies are asking a federal court to keep portions of expert testimony from that failed merger sealed, calling it “highly confidential.”

At this point, the more relevant question for the food industry is not why they want the testimony sealed, but why the merger was ever positioned as a good idea in the first place. From a food marketing, consumer trust, and competitive dynamics perspective, the Kroger–Albertsons merger failed on fundamentals long before it failed in court.

Below are seven fact-filled food marketing data points that explain why this merger was a bad idea from the start.

 

Seven Food Marketing Facts That Undermined the Merger

1. Consumers Already Perceive Grocery Consolidation as Inflationary

According to multiple FMI and Gallup consumer sentiment studies (2022–2024), over 60% of shoppers believe large grocery mergers increase prices rather than lower them. The merger narrative promised “lower prices through scale,” but consumer belief moved in the opposite direction—eroding trust before integration ever began.

2. Price Sensitivity in Grocery Is at a 20-Year High

NielsenIQ data shows that more than 75% of U.S. grocery shoppers now actively compare prices across banners, digital ads, and apps. In this environment, a mega-merger that reduces banner diversity signals less competition, not more value—exactly the opposite of what price-sensitive consumers reward.

3. Private Label Was Already Saturating Returns

Both Kroger and Albertsons leaned heavily on private label growth as a justification for scale. Yet Circana data shows private label share growth began flattening in 2023 as quality parity was achieved. Merging two mature private-label portfolios offered diminishing marginal returns, not breakthrough growth.

4. Local Assortment Drives Loyalty—Not National Scale

Food Marketing Institute research consistently shows that local assortment, regional brands, and store-level autonomy are top drivers of loyalty. A nationalized merchandising strategy—inevitable under a merger of this size—would have reduced local relevance, especially in fresh, prepared foods, and regional ethnic categories.

5. Labor Instability Is a Direct Sales Risk

Unionized grocery banners already struggle with turnover and morale. Public labor opposition to the merger created measurable brand risk. McKinsey retail benchmarks show that stores experiencing labor disruptions see same-store sales declines of 3–7% in the following quarters.

6. Digital Grocery Growth Rewards Speed, Not Size

Online grocery growth (pickup, delivery, and quick commerce) favors operational agility, not organizational complexity. Walmart, Amazon, and regional players outperformed legacy grocers by simplifying decision-making—not by adding layers of integration risk.

7. Regulatory Risk Has Become a Material Brand Liability

Post-2020 antitrust enforcement is no longer theoretical. Edelman Trust Barometer data shows declining trust in companies perceived as “gaming the system.” The FTC challenge itself became a reputational drag, reinforcing consumer and supplier skepticism.

 

Three Strategic Stumbles Kroger and Albertsons Both Made

1.       They Marketed the Deal to Wall Street, Not to Shoppers
The merger was framed in terms of EBITDA, synergies, and scale efficiencies—not shopper outcomes. Consumers never heard a compelling why that mattered to their weekly grocery trip.

2.       They Overestimated Divestitures as a Credible Fix
Promising to sell hundreds of stores ignored the reality that divested assets often struggle without scale, talent, and capital—weakening competition rather than preserving it.

3.       They Underestimated the Optics of Power Concentration
In an era of heightened sensitivity to corporate concentration, the optics of two top-five grocers combining overwhelmed any operational logic.

 

Two Reasons We’ve Had Enough—and Why It’s OK to Keep This Private

1.       The Market Has Already Rendered Its Verdict
The merger failed. The rationale has been dissected by regulators, trade press, labor groups, suppliers, and consumers. Re-litigating expert testimony adds little value to the public conversation.

2.       Transparency Does Not Mean Endless Repetition
There is already a vast public trial record. At some point, continued disclosure becomes noise, not insight. The industry benefits more from forward-looking innovation than backward-looking justification.

In this context, keeping certain testimony sealed is less about secrecy and more about acknowledging that the debate is settled.

 

Two Insights from the Grocerant Guru®

1.       Scale Without Shopper Relevance Is a Growth Dead End
The future of food retail belongs to brands that combine trust, transparency, and local relevance—not those that chase size for its own sake.

2.       The Next Competitive Advantage Is Cultural, Not Structural
Winning grocers will invest in people, fresh food credibility, and frictionless convenience. No merger can substitute for that.

Think About This:
The Kroger–Albertsons merger wasn’t stopped by regulators alone—it was undone by flawed assumptions about consumers, competition, and credibility. At this stage, keeping parts of that bad idea out of the public spotlight may be the most practical decision both companies have made since 2022.

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