(Mill Creek QFC and Safeway stores, which are just across 164th St from each other)
Plans for Kroger to merge with Safeway-Albertsons would create a grocery giant on the scale of Walmart or Amazon.
The new company would be the nation’s largest grocer with independent grocers already expressing concern about reduced competition. Seattle Business Magazine editor, Rob Smith, tells Northwest Newsradio some indie stores could go out of business because of the pressure the QFC-Fred Meyer owner could put on the supply chain, both to get lower wholesale prices because it could buy in such large quantity and for greater access to products in short supply as a top tier customer. “Those supply chains are naturally going to follow the money,” Smith says, “so there’s a lot of concern that this is going to be very bad for independent grocers.”
Smith says it also means dozens of manufacturing and distribution centers under one giant corporate umbrella, so he believes one of the goals is to accommodate more online shoppers. Smith says foot traffic in stores has not returned to pre-pandemic levels, and more people have become accustomed to having their groceries delivered.
Smith says those independent stores could attract shoppers with better service but won’t have the supply chain power, which means they couldn’t match the lower prices. Smith says, “I think there’s an opportunity there [for independent grocers]. Does customer service trump everything or does price trump everything.”
It’s also likely with both chains saturating the west that they’d have to sell off some stores. Kroger has a larger national footprint, while both Kroger and Safeway-Albertsons have large presence in western states, as is clear with so many QFC, Fred Meyer, Albertsons and Safeway stores in Western Washington. Smith says there are a lot of stores within a mile or two of each other in busy neighborhoods, like the Safeway and QFC in Mill Creek (pictured above), which are across 164th Street from each other, with two Fred Meyers, another Safeway, and a Winco a couple miles away – not to mention Costco and Target with grocery not that far away either. When Albertsons bought Safeway, it was forced to divest stores to avoid anti-trust issues, but the Federal Trade Commission allowed the company to buy back several of those stores just a couple of years later, so it remains to be seen if the same will happen here. Even if the behemoth did close some stores and force some independents out of business (think Walmart leading to smaller business closures in many towns where it set up shop), with so many other stores, it’s unlikely we would see “food deserts” like in many poorer neighborhoods in places like Los Angeles, where there isn’t a healthy food shopping option for miles.
The U.S. Senate Judiciary subcommittee that deals with anti-trust concerns is set to hold a meeting on this merger plan next month