Kroger and Albertsons are reportedly in talks over a proposed merger that would swell the combined chain to a footprint of 5,000 stores

• Kroger and Albertsons are engaged in talks around a potential merger, Bloomberg reported.
• A merger would boost the joint chain to a store footprint of over 5,000 locations.

Grocery store giants Kroger and Albertsons are discussing a potential merger, according to Bloomberg.

Talks are ongoing and could potentially conclude this week, the business news site said, citing unnamed people familiar with the matter. But at least one liberal-leaning interest group already has flagged the possibility that such a merger could send food prices soaring for shoppers around the United States.

In a note dated Monday, J.P. Morgan analysts described Albertsons as a "consistently improving company in a food-at-home industry that is proving resilient for longer than some observers anticipated," although they noted that Kroger has the edge in terms of "data analytics and delivery."

Both chains boast a massive footprint in the United States. Kroger ran 2,726 supermarkets as of January 29, 2022. Kroger's supermarkets operate under its namesake brand, and "a variety of local banner names," according to the company's most-recent annual report to the Securities and Exchange Commission.

Albertsons' latest annual SEC filing listed 2,276 stores as of February 26, 2022, under a total of 24 different banners.

Together, the two chains would combine for a total of 5,002 locations. The merger would make the combined chain one of the largest in the United States. As of its latest SEC filing, Walmart owned 4,578 retail locations in the US, which would give the edge to the possible merged grocery chain. But counting leased properties in addition to owned properties tips Walmart over to a total of 5,342 US retail properties across its banner. And Walmart's total retail units around the globe comes out to 10,593, as of January 31, 2022.

"Kroger's acquisition of Albertsons would have a significant impact on the US grocery landscape, both in physical retail and online," Insider Intelligence senior analyst Blake Droesch said. "Kroger would nearly double its locations and have a bigger brick-and-mortar footprint than Walmart. Walmart will still be the leader in grocery sales, but the acquisition would allow Kroger to get closer in competition."

Kroger's operation dates back to the 19th century, when Bernard Kroger entered the retail business in Cincinnati. Meanwhile, Albertsons was launched by Joe Albertson in Boise in 1939. Both own numerous banners. Kroger controls chains like Ralphs, King Soopers, Harris Teeter, and Dillons. Albertsons' subsidiaries include Acme Markets, Safeway, and Vons.

The American Economic Liberties Project, an anti-monopoly group, took to Twitter to decry the possible merger.

Anti-monopoly advocates have long sounded the alarm on massive mergers, citing the possibility that American consumers will be hit hard in terms of grocery prices. Open Markets Institute's Claire Kelloway wrote in Time that the data indicates that "monopolistic market structures are making things worse" in regards to rising food prices during the pandemic.

According to Numerator, Walmart has the largest market share in the grocery industry, with 21%. Kroger takes the No. 2 spot with a 9.9% share, while Albertsons places fourth with 5.7%. Experts say a merger could have implications for both companies' digital capabilities.

"On the digital side, Kroger can make use of Albertsons' locations to drive click-and-collect growth, while Albertsons can leverage Kroger's fulfillment infrastructure to bring its online capabilities in-house, instead of relying on third-parties like Instacart and DoorDash," Droesch said.

Click and collect services allow customers to buy products online and pick them up at the store.