Merger affecting Metro Market, Pick ‘n Save stores blocked by FTC

MILWAUKEE - The Federal Trade Commission (FTC) is suing to stop the largest supermarket merger in U.S. history. One of the companies involved owns grocery stores familiar to Wisconsin consumers.

Shoppers walking into the Metro Market on Milwaukee’s east side tell Contact 6 they’ve noticed food prices going up.

"The milk went up, the eggs, the butter," said Denise Malone, who lives blocks away from the store.

2022 brought the biggest jump in food-at-home prices in the U.S., when prices rose 11%, according to the Consumer Price Index. The typical increase is about 2% per year.

Grocery shoppers tell Contact 6 they’re making ends meet.

"Some items are a little higher than others," said Malone. "But, they’re manageable."

Still, shoppers recognized the higher prices are a hardship for others.

"I feel really bad for them," said Robert Flath, who lives near the Metro Market. "That can really hit somebody’s budget."

Now, the question is: will prices be driven up further by a major supermarket merger? An FTC lawsuit makes it less likely the merger will take place.

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According to the FTC, the largest traditional supermarket chain in the country wants to buy the second-largest supermarket chain.

Kroger operates 2,726 supermarkets under several banners including Metro Market and Pick ‘n Save. Kroger wants to buy Albertsons, which operates 2,276 supermarkets including Jewel-Osco and Safeway.

The FTC’s lawsuit says the merger will likely result "in Americans paying millions of dollars more for food and other essential household goods."

Kalin Kolev is an associate professor in Marquette University’s college of business. He says the supermarket merger would help the two companies better compete with non-traditional grocery providers like Walmart, Costco and Amazon.

"[The stores] will remain the same in terms of coverage but they will just be more powerful," said Kolev.

Kolev says the FTC believes the merger will hurt consumers.

"There will be fewer competitors in the industry and, as a result, you will have a bigger advantage. You can raise prices," said Kolev.

Kalin Kolev

Kroger says the opposite. In a statement, it tells Contact 6, "The FTC’s decision makes it more likely that American consumers will see higher food prices…"

The statement goes on to say, "In fact, this decision only strengthens larger, non-unionized retailers like Walmart, Costco and Amazon by allowing them to increase their overwhelming and growing dominance of the grocery industry."

Kolev elaborated further.

"(The stores) could have more efficient operations. They have more power against their suppliers, which means they could negotiate better prices for their supplies and pass those savings to the consumers," said Kolev.

Kolev says the question then, becomes: will the company pass the extra discount to the consumer?

"It’s always a question mark, will it happen?" said Kolev.

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Kolev says the FTC’s lawsuit makes it more likely the merger won’t happen.

Kroger says it will use $500 million in cost-savings from the deal to reduce prices. The FTC is skeptical of the claim. If the merger goes ahead, the stores’ combined footprint would be 5,000 stores across 48 states.