Imagine trying to enjoy a simple family meal or celebrate a special occasion while your budget feels squeezed tighter each month. For many American families, this is the harsh reality. Nearly one-third of us spend more than 60 percent of our monthly income on basics such as groceries, rent and utilities. We can’t come together for a family dinner or a birthday party without something on the menu. 

In Nevada, this strain is particularly intense. Nevada has seen a cumulative inflation increase of 22 percent since January 2021 and, according to the U.S. Census Bureau Household Pulse Survey, Nevadans are feeling the pinch at 10 times higher than the national average. 

Nevada ranks second in the nation when it comes to weekly grocery costs. According to the Consumer Price Index, the average Nevadan is paying $1,187 more monthly to purchase the same basket of goods and services in June 2024 as in January 2021. No wonder Nevada families are hurting. 

Food inflation is increasing due to several factors, including supply chain disruptions, an increase in gross margins of the top four largest food manufacturers, labor shortages to the tune of 1.4 million workers and shrinkflation.

Grocery stores are doing what they can to keep their doors open while combating food inflation. You can’t deny the grocery store market is incredibly competitive — especially when you factor in online grocery sales. According to a Mercatus/Incisiv study, online grocery sales are expected to surpass 20 percent of groceries sold by 2025. To remain competitive in the grocery store sector, Kroger and Albertsons announced a merger in 2022. 

The Federal Trade Commission (FTC) has raised concerns about the merger, going as far as to sue to stop the merger earlier this year. The FTC claims a Kroger and Albertsons merger will eliminate competition and raise grocery prices, leading to a grocery store monopoly. They couldn’t be more wrong. The FTC is painting Kroger as some grocery giant, but it isn’t. In fact, Amazon, Whole Foods, Walmart, Target and Costco currently dominate the online grocery market.

The merger could lead to lower prices for you at the checkout counter and better shopping experiences for us all. Basic economic principles suggest mergers can offer companies better bargaining power, more capital access and innovation opportunities. Who doesn’t like that?

Besides, Walmart, the largest grocer in the United States, with a 30 percent market share, would still dominate by more than double a combined Kroger-Albertsons. 

Kroger has a 20-year track record of lower prices, investing more than $5 billion in customer savings since 2003. Kroger will eventually invest $1 billion to lower prices and $1.3 billion to enhance customer experience, exactly as it did in 2014 following the Harris Teeter merger and in 2017 following the Roundy merger. This merger will lead to lower prices and more fresh, affordable choices for families. 

Grocery prices affect so much more of our lives than just our wallets. That’s why it’s even more important that we get the facts straight.

Rather than addressing inflation with market-driven policies that would relieve some of the pressure Nevadans feel in their pocketbooks, it’s easier to score cheap political points and baselessly oppose the merger.  Once again, the politicians got this one wrong, going for the election year soundbite rather than long-term solutions.  Sadly, that will continue to cost Nevadan families. 

John Tsarpalas is president of the Nevada Policy Research Institute.

The Nevada Independent welcomes informed, cogent rebuttals to opinion pieces such as this. Send them to [email protected].