Every now and then I find myself reminding people that most “big” businesses started out as a small business. Google was started by two guys in a garage. Facebook was founded in a dorm room by a few college kids. 

Kroger and Albertsons grocery stores are no different. The founders of both companies used their life savings to start their first stores, with the goal of bringing fresh food to their neighbors.

Since their inception, these two companies have witnessed many paradigm shifts in the grocery market sector. From e-commerce to discount food stores, shoppers are changing their buying habits and businesses of all sizes are adapting their models to stay competitive. Some are increasing their online presence. Some are consolidating. And sadly, many are closing.  

While Kroger and Albertsons are big businesses now looking to merge, they are doing so to compete against Walmart in the grocery space. Kroger has committed to protecting jobs and closing no stores. This is crucial to Nevadans as the state is currently home to 46 Kroger/Smith's and 35 Albertsons stores. Each neighborhood store holds significance, whether ease and convenience or the offering of family favorite foods, for valley shoppers.

Like many businesses, merging is required to stay competitive, which, in turn, ensures that stores won’t close, workers won’t lose their jobs and the business can continue to provide quality products at reasonable prices. The recent decision by the Federal Trade Commission and nine states including Nevada to file a lawsuit opposing the merger appear to thumb their noses at this concept.  

Merging can generate cost savings by leveraging economies of scale. This is much needed in Nevada where we currently have the second highest grocery prices in the country. Larger companies possess greater bargaining power with suppliers, streamlined operations and lower expenses. Additionally, merging aids in risk mitigation, such as navigating economic downturns or supply chain disruptions. Kroger and Albertsons united will bolster resilience amidst uncertainties.

I have read statements from the CEOs of both companies about the merger and their reasoning behind this move. You may be surprised to learn that traditional and local supermarket grocery stores, such as Kroger and Albertsons accounted for 81 percent of retail sales 30 years ago. Ten years later, that number dropped to 61 percent, and today, it’s closer to 50 percent. These traditional grocers are losing sales to the larger online and warehouse stores. Store closures are happening because regional and local grocery stores can’t compete with these national discount chains. From 2012 to 2022, 849 supermarkets closed in the U.S., while discount stores grew by more than 16,800 stores.  

With just a handful of retailers dominating the grocery business in the U.S., the industry has reached a point where supermarket operators are likely to feel strong pressure to join forces with one another to survive. An economist with the Strategic Resource Group recently told Yahoo Finance, "Kroger’s acquisition of Albertsons is the last, best, and final chance to level the playing field."

Instead of perpetuating the myth that the merger will reduce competition, I believe the shoppers of these neighborhood stores would welcome the lower prices the merger could provide, while being able to continue to shop at their favorite location. 

Jennifer Vinuya is a small-business owner and community leader. She also works as a director of nurses for a home health care agency and is the vice president of Sing Out for Autism, a nonprofit organization focusing on serving the Asian American Communities with different and unique disabilities. 

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