Kroger, Albertsons merger would leave some Colorado towns with only 1 grocer, costing consumers
In Colorado two of the most visited grocers in the state could soon be under the same ownership after Kroger announced they will purchase Albertson Co. for more than $25 billion. The sale means Safeway, owned by Albertsons, will now be under the same management as City Market and King Soopers which are owned by Kroger.
According to business experts, the merger will likely mean a spike in prices for consumer goods at grocery stores around the state.
"That is not good news for the consumer," said Mac Clouse, Professor of Finance at the University of Denver.
In many towns and cities in Colorado, Safeway and King Soopers are the only two options for groceries away from non-traditional grocers like Walmart, Target, Sam's Club and Costco. Many larger cities have added the likes of Trader Joe's, Whole Foods and more in recent decades. However, towns like Windsor in northern Colorado are stuck with only two options, Safeway and King Soopers. And, with the two likely headed toward a merger, both experts and residents fear this will mean more cost for the consumers.
"I have mixed feelings. I love King Soopers, I think they are a good company. But, I don't like the idea of a monopoly either," said Joline Blair, a shopper in Windsor.
Windsor's population had grown significantly in the past 15 years. Many residents frequently complain of how crowded the King Soopers parking lot and store can become. Many told CBS News Colorado one of the main reasons they shop quite literally across the street, now, is because Safeway doesn't have as many customers. However, that has also started to change as the population grows.
"I don't really like Kroger that much, and I like having a choice," said Gayle Rayner, a shopper in Windsor.
"(With inflation) the prices have already gone up tremendously," Blair said.
Clouse said the proposed merger would only result in higher prices in many communities simply because the competition between companies would be eliminated.
"Now there is no competition between those two and there is no reason for them to have to compete on a price basis for the consumer's dollars," Clouse said. "You are going to see higher prices, and you may also see fewer goods."
If the sale is finalized and approved there is a possibility that Safeway or King Soopers stores could remain under their original names. However, Clouse said maintaining original store names would likely be nothing more than a facade for the consumer. Clouse warned that the proposed merger could result in Kroger closing stores in order to consolidate properties and more, meaning some could also lose their sources of income.
"(If they keep their names) it won't be different. They will be the same and that has consequences for the consumer," Clouse said.
In Windsor, where residents have been pushing for years for both local government and companies to build a third grocery store along the town's rapidly growing southern border, the news of possible consolidation of the only two grocery stores comes with a plea for more options, not less.
"Build another grocery store," Blair said, referencing how some residents in Windsor, Severance, Timnath, Loveland and Fort Collins all share the same two stores. "They all come here because there aren't any other options. We need another grocery store for sure."
