DENVER (KDVR) — The parent companies of King Soopers and Safeway are considering a merger, where the two chains would become one. But what could that mean for shoppers?
FOX31 spoke with a business professor at the University of Denver, who said the merger would mean a monopoly for the new-mega grocer, at least in Colorado.
“It’s going to hurt, because they don’t have the competition from each other that forces them to keep prices down,” DU finance professor Mac Clouse said.
Mega-grocer could impact shoppers
Colorado is in a unique spot, because the two grocery stores are the top two traditional stores in the state. Combined, they would have nearly 45% of the market share in the Denver area.
“The broader market includes Walmart, Target, Whole Foods,” Clouse said. “But when you start looking specifically at the traditional grocery stores — drive around here in Denver, what are the traditional grocery stores? Well, they’re Albertsons Safeway and Kroger’s King Soopers, and the King Soopers family. And if those entities merge, they’ve got 100% of that market.”
It could also have an impact on the number of stores in an area.
“They don’t need to have two grocery stores right across the street from each other anymore because they’re not competing. So they can shut one of them down,” Clouse said.
When FOX31 asked Clouse if the merger could have any benefit for shoppers, he said: “I don’t think so.”
The union that represents grocery store workers in Colorado called the merger “devastating” for workers and shoppers.
“This proposed merger of two of the largest grocery companies in the nation will no doubt create a monopoly in the grocery industry for many communities,” said Kim Cordova, president of UFCW Local 7 and vice president of UFCW International Union.