Why the largest supermarket merger in history is being blocked

Remy Blaire brings the latest business headlines from the floor of the New York Stock Exchange as markets close for trading Wednesday, February 28.

Full Video Transcript Below:

REMY BLAIRE: I’m Remy Blaire - reporting from the New York Stock Exchange. Here’s what we’re watching on TheStreet today.

Markets are continuing to react to the final few quarterly earnings reports. With over 80 percent of companies in the S&P reporting, a majority have impressed investors, revealing continued strength in the final quarter of 2023. Investors are looking ahead to a crucial inflation report and jobless claims Thursday, and an array of Fed speakers Friday.

In other news, the biggest supermarket merger in history has hit a roadblock. The Federal Trade Commission is suing to halt the merger between Kroger and Albertsons, two of the largest grocery chains in the U.S.

Kroger announced plans to buy Albertsons in October of 2022 for nearly 25 billion dollars. The companies own dozens of chains including Safeway, Vons, and Fred Meyer. If the merger was completed, the duo would operate more than 5,000 stores with over 700,000 employees in different states.

The F-T-C claims the proposed merger would limit competition in the industry, leading to higher prices. This comes at a time when Americans are already strained by inflated grocery prices… According to the Bureau of Labor Statistics, consumers are spending 20 percent more on groceries since 2020.

The two companies are criticizing the move, with Kroger saying this lawsuit will actually harm consumers, resulting in higher prices. Kroger argues that the FTC’s move will only strengthen the likes of bigger grocery chains like Walmart and Costco, allowing them to increase their dominance of the industry.

That’ll do it for your daily briefing. From the New York Stock Exchange, I’m Remy Blaire with TheStreet.