Albertsons is one of the largest grocery store chains in the United States, with over 2,200 locations across the country. The company has been in business for over 100 years and is headquartered in Boise, Idaho. Albertsons is a publicly traded company, with shares listed on the Nasdaq stock exchange.
In recent years, Albertsons has been on a bit of a buying spree, acquiring a number of smaller grocery chains and consolidating its position as one of the leading supermarket operators in the US. In 2015, Albertsons bought Safeway, another large grocery chain, for $9.2 billion.
The following year, Albertsons acquired Plated, a meal-kit delivery service, for $200 million. And in 2017, Albertsons bought Rite Aid, a pharmacy chain, for $17 billion.
Albertsons’ aggressive expansion strategy has led some to accuse the company of trying to establish a monopoly in the grocery business. Is this accusation fair? Let’s take a closer look.
In order to establish a monopoly, a company must have significant market power, which Albertsons certainly has. According to Kantar Worldpanel, Albertsons had a 17.1% share of the US grocery market in 2020. This made it the second largest grocery store chain in the country behind only Walmart (which had a 22% share of the market).
Albertsons also has significant barriers to entry that would make it difficult for new competitors to enter the market and challenge its position. For example, Albertsons owns many of the properties on which its stores are located.
This gives the company an advantage over potential new entrants who would need to find their own suitable locations for their stores. Additionally, Albertson’s size enables it to negotiate better deals with suppliers than smaller grocers can get. This reduces its costs and helps it to keep prices low, making it difficult for new competitors to undercut Albertson’s prices and gain market share.
So yes, there is some truth to the accusation that Albertsons is trying to establish a monopoly in the grocery business. However, it should be noted that monopolies are not illegal in the United States. And while some may view Albertson’s dominance of the grocery market as bad for consumers (because it gives the company too much power), others may argue that having one strong player in the market is actually beneficial for consumers because it helps to keep prices low.
What do you think? Is Albertson’s attempt to establish a monopoly in the grocery business good or bad for consumers?
