It might result in higher profits, but not lower prices for consumers.
Their goal is to turn grocery shopping into a surveillance service to better target you with advertising:
One of the biggest opportunities is capturing more shopper data across a wider number of banners, which can be turned into lucrative online ads. The combined company would have reach to about 85 million households across the country.
Many retailers, including Walmart, Target and Kroger, have turned to advertising as an alternative stream of revenue after seeing the success of established online players like Amazon. The business has much higher margins than selling cans of soup or gallons of milk.
A bigger Kroger would also have cheaper manufacturing costs and better bargaining power, too, McMullen said
Source: Albertsons deal: How Kroger plans to win over regulators, investors
On the last point, they would squeeze farmers, distributors, and food manufacturers for lower costs.
But by reducing consumer point of sale competition, this leads to higher consumer prices.
In my town, when Albertsons bought Safeway in 2014, the existing Albertsons store was shut and replaced with a ranch and farm hardware store. Today we have one less grocery store and less competition than before.
When Kroger buys Albertsons/Safeway, this will result in the closure of the one Safeway store in town (Albertsons owns Safeway) as it is just 1/2 mile from the Kroger owned Fred Meyer store.
Our small town will have gone from 5 grocery stores to 3 grocery stores: This will lead to higher prices.
It is frustrating that the media is too dumb to understand this problem.
