5 ms·

The combined firm, post-merger, would have 15% of the U.S. grocery market. Walmart has ~18%. It's OK to dislike the deal because you see a beloved brand being

The combined firm, post-merger, would have 15% of the U.S. grocery market. Walmart has ~18%. It's OK to dislike the deal because you see a beloved brand being absorbed. It's even OK to dislike the deal because you hate private equity. But aggregating up to a 15% market share doesn't look like a monopoly concern to me.

nightfly 4y ago
Nation wide it might be only 15% but in a town it might mean that all (or at least all non-outlet) grocery stores are now owned by one company
- themadturk 4y ago
  In my city we have two Safeways, a Fred Meyer (Kroger), a QFC (Kroger) a Walmart Supercenter, a WinCo, a couple of other smaller grocers, and Costco. Before the Albertsons-Safeway merger we used to have a couple of Albertsons, and even a Haggen. Those are all gone now, not replaced by anything. There's another couple Safeways not far out of town, and another Fred Meyer as well. With this kind of geography, we're likely to lose at least one Safeway (it's literally across the street from Freddy's), and possibly one or another of those not-too-far-away Freddy's and Safeways. It's not exactly going to create a food desert, but real choice will go way down. I already split my shopping between Fred Meyer and Walmart, mostly because of supply concerns between the two.
- gwbrooks 4y ago
  Agreed. But the policy horse is already out of the barn on that dynamic. See also: Independent bookstores, small/regional general stores, farming, water and electric utilities in many markets, etc.
- loeg 4y ago
  Yeah, including towns like Seattle. Kroger + Albertsons are probably 70% of the market here.
clairity 4y ago
"monopoly" is a red herring here. if they were under 10%, you might have a case (though there are many factors besides market share that need to be considered, like supplier power). the issue that we the people, and by extension our antitrust regulators, care about is market distortion, and 15% is well within the range at which a competitor can unduly distort a market in their favor by sheer size alone. markets exist for the benefit of society as a whole, not just giant corporations.
- deleted 4y ago
  [deleted]
manacit 4y ago
This is potentially an overgeneralization: - Not all grocery stores are fungible in the category. Safeway and Whole Foods cater to a very different clientele at different price points - That is a nationwide amount, but locally may be very different. There are no Walmarts in the city limits of Seattle - This is not just about customers, but suppliers as well Now, there are still plenty of choices for me - I could go to a PCC, Whole Foods, Costco, Amazon Fresh, etc. Not every city has the same options, and turning a market with 3 or 4 competitors into 2 or 3 is still a material change, as ew have seen in other industries.
banannaise 4y ago
Given Walmart's aggressive and arguably anti-competitive market practices, I'm not sure this is the argument you think it is. Why does this mean "this merger is okay, actually" and not "we should forcibly break apart Walmart to restore competition"?
- gwbrooks 4y ago
  I'm fine with that if the public will, regulatory power and legislation is there. My point was less "This is fine," and more, "This is inconsistent." Sorry if that didn't come across.
  - banannaise 4y ago
    Sadly, the will probably isn't there, but not solving one problem doesn't mean we can't solve related problems. Some people may not believe we should, but (1) I would disagree, and more importantly (2) that isn't a legal doctrine. Walmart, notably, didn't get there by agglomerating smaller grocery brands. They grew it organically, if with a lot of shady tactics. So there's not really a point at which regulators could have prevented the whole thing; they can only take proactive action. Whereas here, they have an opportunity to stop a problem reactively.
CamperBob2 4y ago
Nobody shops for groceries on a nationwide basis. Grocery shopping is local. In terms of its local effects around here, this merger will be insanely bad for both consumers and producers, and should not be permitted.

nightfly 4y ago

Nation wide it might be only 15% but in a town it might mean that all (or at least all non-outlet) grocery stores are now owned by one company

themadturk 4y ago
In my city we have two Safeways, a Fred Meyer (Kroger), a QFC (Kroger) a Walmart Supercenter, a WinCo, a couple of other smaller grocers, and Costco. Before the Albertsons-Safeway merger we used to have a couple of Albertsons, and even a Haggen. Those are all gone now, not replaced by anything. There's another couple Safeways not far out of town, and another Fred Meyer as well. With this kind of geography, we're likely to lose at least one Safeway (it's literally across the street from Freddy's), and possibly one or another of those not-too-far-away Freddy's and Safeways. It's not exactly going to create a food desert, but real choice will go way down. I already split my shopping between Fred Meyer and Walmart, mostly because of supply concerns between the two.
gwbrooks 4y ago
Agreed. But the policy horse is already out of the barn on that dynamic. See also: Independent bookstores, small/regional general stores, farming, water and electric utilities in many markets, etc.
loeg 4y ago
Yeah, including towns like Seattle. Kroger + Albertsons are probably 70% of the market here.

clairity 4y ago

"monopoly" is a red herring here. if they were under 10%, you might have a case (though there are many factors besides market share that need to be considered, like supplier power). the issue that we the people, and by extension our antitrust regulators, care about is market distortion, and 15% is well within the range at which a competitor can unduly distort a market in their favor by sheer size alone. markets exist for the benefit of society as a whole, not just giant corporations.

deleted 4y ago
[deleted]

manacit 4y ago

This is potentially an overgeneralization: - Not all grocery stores are fungible in the category. Safeway and Whole Foods cater to a very different clientele at different price points - That is a nationwide amount, but locally may be very different. There are no Walmarts in the city limits of Seattle - This is not just about customers, but suppliers as well Now, there are still plenty of choices for me - I could go to a PCC, Whole Foods, Costco, Amazon Fresh, etc. Not every city has the same options, and turning a market with 3 or 4 competitors into 2 or 3 is still a material change, as ew have seen in other industries.

banannaise 4y ago

Given Walmart's aggressive and arguably anti-competitive market practices, I'm not sure this is the argument you think it is. Why does this mean "this merger is okay, actually" and not "we should forcibly break apart Walmart to restore competition"?

gwbrooks 4y ago
I'm fine with that if the public will, regulatory power and legislation is there. My point was less "This is fine," and more, "This is inconsistent." Sorry if that didn't come across.
- banannaise 4y ago
  Sadly, the will probably isn't there, but not solving one problem doesn't mean we can't solve related problems. Some people may not believe we should, but (1) I would disagree, and more importantly (2) that isn't a legal doctrine. Walmart, notably, didn't get there by agglomerating smaller grocery brands. They grew it organically, if with a lot of shady tactics. So there's not really a point at which regulators could have prevented the whole thing; they can only take proactive action. Whereas here, they have an opportunity to stop a problem reactively.

CamperBob2 4y ago

Nobody shops for groceries on a nationwide basis. Grocery shopping is local. In terms of its local effects around here, this merger will be insanely bad for both consumers and producers, and should not be permitted.