On Wednesday, Kroger announced plans to buy grocery store and pharmacy retailer Giant Eagle for $1.65 billion.
Pittsburgh-based Giant Eagle generates about $9 billion in annual sales revenue from 197 supermarkets and 11 standalone pharmacies across Ohio, western Pennsylvania, West Virginia, Maryland and Indiana. Kroger owns various supermarket chains across the country, including Ralphs, King Soopers, Smith’s and Fred Meyer.
"Today's announcement marks an exciting next chapter for our team members, customers, vendors and community partners," Giant Eagle CEO Bill Artman said in a statement. "Together with Kroger, we will be well-positioned to advance our strategy and deliver better quality and service, better everyday value, and a better shopping experience for our customers, while providing greater growth opportunities for our dedicated team members."
There are about 20 Giant Eagle stores in central Ohio that have been competing with more dominant chains. The merger of the two chains lays plans for possible Giant Eagle closures, though it is unclear how the merger will impact central Ohio consumers.
However, there may be less variety in choice and products for consumers, said Joseph Goodman, an Ohio State marketing and psychology professor.
“I would guess that some of the Giant Eagles will be closed because they are too close to other Kroger (stores). So, there might be in some locations fewer grocery stores you might have and fewer options and less price competition, because Kroger doesn't have that price competition anymore with Giant Eagle,” Goodman said.
Goodman explained that with less competition, prices for goods at supermarket chains may rise, but competition with stores like Costco and Walmart could offset higher prices.
Goodman also said the Giant Eagle purchase appears to reflect a larger change in the grocery business over the last few decades where more retail chains, like Kroger, are emerging as dominant players to compete with retail giants like Walmart. Products that widen supermarkets’ abilities, like Kroger’s delivery app, have made it difficult for regional stores to compete.
“Kroger has really gone national,” Goodman said. “They're all over the country and so they have a big advantage now. And so, we're going to feel probably, you know, more of these types of changes."
The merger is set to close in 2027 if regulators approve the deal.
