In a free-market system, competition is key in keeping prices low. If a business provides its customers with the same goods as a competitor, but at higher prices, those customers will go to the competitor. That is, unless you get rid of the competition.

We are seeing this play out this week in the grocery business. The CEOs of the two largest U.S. supermarket chains – Kroger and Albertsons – were in Washington this week defending their proposed merger to a skeptical group of Senators from both parties.

Sen. Mike Lee (R.-Utah), the Subcommittee on Competition Policy, Antitrust and Consumer Rights’ ranking Republican member, said the companies haven’t explained why the merger is necessary and whether various commitments on prices, wages and stores will be fulfilled, according to reporting by The Wall Street Journal.

“Inflation, to put it gently, is wreaking havoc on our entire economy but not on the grocery industry, it appears,” Lee said.

Inflation is certainly hitting the customers of grocery stores. Prices have been rising on everything from eggs to bread to orange juice. At a time of rising prices, less competition seems like an especially bad idea.

We’d argue that merging the two largest grocery chains is never going to be in the best interest of consumers. Even if it doesn’t lead to higher prices, as the businesses have promised it won’t, it will certainly lead to fewer stores. (Also, has any merger in the history of the world led to lower prices for consumers?)

If you just look at this community, the two most common grocery stores we have are City Market and Safeway. City Market is Kroger. Safeway is Albertsons. We’ve already seen grocery stores close in this community. Will they need to keep all the remaining stores open if they all belong to the same company? We can’t say for sure, but we wouldn’t be surprised if more stores closed as a result.

To be fair to these two corporations, they argue that they need to combine to be able to compete with the true mega-corporations in the grocery business – Walmart and Amazon. It is true that Walmart accounts for an astounding 22% of food-retail sales, according to J.P. Morgan analysts. If the merger goes through, the combined Kroger/Albertsons would be 13%.

This isn’t a persuasive argument to us. If anything this is an argument to break up Walmart’s grocery business and spin it off into several competing businesses, rather than create another grocery mega-corporation.

We’ve had close calls with mergers in the past. Just last year a proposed merger involving Cabella’s and Sportsman’s Warehouse was called off. Had that gone through, we can’t imagine we’d have held onto both stores in this community. It’s the same for groceries.

This community has seen its options for groceries decrease, while our costs have gone up. This proposed merger will only exacerbate those two issues. We’re glad to see a bipartisan group of Senators question the wisdom of this deal. We’d like them to go further and explore ways to unwind the consolidation of power among a few giant corporations to give us all more choice and lower prices.

Grand Junction Daily Sentinel Editorial Board

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