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Snarl in Aisle 2: The Albertson's-Safeway Merger

Written by TABS Analytics | February, 12 2015

What happens when you tie a pair of stray grocery carts together? Do they start gliding across the parking lot in a straight line or do their wheels lock up and go nowhere? Drawing upon real-world experience, the answer to this riddle is no big mystery.

 

This metaphor, then, leads us to a discussion of the $9.2 billion Albertson’s and Safeway merger completed last month. From my industry contacts there is a collective sigh of… Grief? Disbelief? Certainly not relief. Rather, vendors have been caught up in a wave of anxiety about what the future holds for this 2,230-store, $60 billion supermarket giant. Namely, are those impressive figures going to hold up?

 

Indeed, the question is not whether growth will come from a bigger entity that can now compete with the likes of Kroger and Walmart. In this case, the question is whether these two companies will put an end to their legacies as the incredible shrinking supermarket chains.

 

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