This episode originally aired on Aug. 11, 2026.
Cincinnati-based grocery-giant Kroger recently announced plans to purchase Giant Eagle.
However, there are concerns that this purchase will change the supermarket landscape in Ohio, western Pennsylvania and beyond.
We’ll look at the purchase and what it could mean for consumers and the supermarket industry.
Guests:
- Dan Eaton, reporter, Columbus Business First
- Christine Bartholomew, law professor, University at Buffalo School of Law
- Ricky Volpe, professor of agribusiness, California Polytechnic State University, San Luis Obispo
Transcript
This transcript is generated with AI. To ensure its accuracy, review the audio file.
Amy Juravich: Welcome to All Sides with Amy Juravich. To say the announcement that Cincinnati-based Kroger was purchasing Pennsylvania-based Giant Eagle for $1.65 billion came as a surprise would be an understatement. At the time of the announcement, Giant Eagle said the name, the My Perks loyalty program will all stay the same. In addition, the headquarters will remain in Cranberry Township, Pennsylvania. But what about central Ohio, where both brands have an overlapping presence? We're talking about the impact of the purchase of Giant Eagle by Kroger, what impact it could have on consumers, the supermarket industry, and the region this hour. And we begin our conversation with Dan Eaton, a reporter for Columbus Business First who has been writing about this story. Welcome back to All Sides, Dan.
Dan Eaton: Good to see you Amy.
Juravich: So this merger between Kroger and the Western return, this merger means Kroger, I'm sorry, I'm messing up my words. This merger means that Kroger will return to western Pennsylvania and Cleveland. Right now, Giant Eagle is dominant in western Pennsylvania and Cleveland. So Kroger can open new stores in areas where there are no Krogers. But what does it mean for Giant Eagle stores in Ohio? What have you found?
Eaton: Yeah, so Columbus is actually, I would argue, the most interesting market in this deal because it's the one where there's significant overlap between Kroger and Giant Eagle. So changes are going to be coming here. Some of the details remain to be seen, but all of these stores aren't going to remain Giant Eagle or I guess conceivably maybe Kroger. I guess there might be some situations where maybe Kroger will want to move on from. Maybe one of their older locations in favor of a giant eagle, you know, that remains to be seen. But you know a lot of these stores are right across the street from each other. And you know Kroger's not, they both probably don't want to keep that situation. But federal regulators also may not allow them to keep the situation even if they wanted to. So.
Juravich: Kroger did attempt a merger with Albertsons. This was back in 2022 and it didn't happen. Can you remind us why that whole deal fell apart?
Eaton: You know, I think one of the big factors was I think the the competitive concerns, you know It was gonna add I believe a couple thousand stores to to Kroger which already has a couple of thousand stores You know that was a case where? You know I think six hundred of those stores are going to be sold to a to a third operator to try to ease Competitive concerns, You know I think it was a complex deal and there were many factors but you know from the the the consumer standpoint I think the regulatory and the competitive. Uh, concerns are probably the one most of note to, uh, to listeners.
Juravich: Yeah. Well, will something similar happen here? I mean, is it guaranteed that Kroger is going to be allowed to buy Giant Eagle?
Eaton: You know, it's certainly not a guarantee, but this is a comparatively much more modest acquisition. It's about 200 stores. And again, most of them are in markets where Kroger doesn't exist, primarily, you know, Pittsburgh and Cleveland being the two big ones. So there's not, you know, from a regulatory standpoint, there's not a competitive concern there. Uh, uh, as there is in that, you know, that's what makes Columbus interesting is because we are the one major market that does have this, you know, potential competitive issue with Kroger, uh owning both of these brands.
Juravich: Well, so Kroger has made acquisitions in the past. They've grown their footprint. And they've made acquisitions that have been successful. I mean, do you know any off the top of your head? I have a few on a list here, but it's not a complete list. Sure.
Eaton: You know, yeah, it's funny because here in in Ohio, we just know Kroger, but you know, they own probably, you know Ten a dozen brands. I believe around the country. You know there's fries. There's Harris Teeter Ralph's you Fred Meyer to name a few I think you you know of a few others
Juravich: Yeah. So there's also City Market, which is a part of there's it's something called the Dylan Company. So that includes fries, City Market King scoopers, snoopers, supers, supers king supers. Yes. I've never heard of that. And then the Fred Meyer brand was brought into the Kroger family, as it says here on my list. That was a 13 billion dollar merger that included Ralph's Smith's and QFC. And then in 2015, they acquired Roundies, which includes Pick and Save and Mariano's. But these are all names we don't know around here, right? So that's, and that's because we're saturated with Kroger's? Right. Okay.
Eaton: Right, yeah, and I don't fully know the operations, but my guess is behind the scenes it's all Kroger, right? It's all similar, it's probably house brands maybe with different branding for different stores, but the same sort of, I'm blanking on the term, captive private label, the same sort of private label offering. So I'm sure you'll see some of that. That's certainly a change that's gonna come to Giant Eagles, I sure you're gonna start seeing. Those Kroger private label whether it's under a Kroger brand or or you know a giant eagle name you know what remains to be seen.
Juravich: I mean, I did some light Googling regarding this, you know, and it seems like a lot of these, like Kroger acquired them, but it seems they kept the original names in some of these cases. So some of the brands, even though we've never heard of them, I guess if you do a lot traveling around the United States, then the Fry's and the Ralph's and Smith's still exist. So does that seem to be what Kroger doesn't put their Kroeger name on everything?
Eaton: Yeah, yeah. And that's what they're saying. And in this case with Giant Eagle, like I said, Columbus, it will be interesting to see what they ultimately do here. But in Cleveland or Pittsburgh, you're already going to Giant Eagle. So there's certainly an argument to be made. Why would you change it to Kroger? I mean, you can essentially function as Kroger corporately, but just leave the Giant Eagle name that people are familiar with on it. Why potentially agitate or confuse consumer if you don't have to.
Juravich: Yeah, and at the time of the announcement, Giant Eagle said that the name Giant Eagle and the My Perks loyalty program will stay the same. What consumer concerns have you heard about Kroger's purchase of Giant Eagle? Are there any? Were they worried about their their fuel perks and stuff like that?
Eaton: Well everyone's always worried about their fuel perks. Those are very important programs to to consumers so you know it's good to hear that that they're saying that's gonna stay the same you know we will we will see over time. The biggest concern I hear is is pricing you know the with Kroger owning both of these brands you know there is a worry can they raise prices because they they've cornered just more of the market potentially. You know, time will tell, but Kroger and Giant Eagle both, you know in recent months have talked about active efforts to lower prices. They are both on, you know I saw one report that they're both on the higher end of prices spectrum, you know for grocery chains. And I think to get more consumers, the easiest, most obvious way to do that is to actually lower prices, so the ultimate impact. We will see from this deal, but the pricing is the biggest concern, but that's something both chains are actively working to address now.
Juravich: And full disclosure, I am a giant Eagle loyalist everyone has their favorite grocery stores, but I'm from Pittsburgh born and raised So when I moved to Columbus, you know when given a choice I picked giant Eagle over Kroger because it's what I knew from my childhood and one thing that I'm not sure about is People really like the giant Eagle bakery. I heard that my family likes their their icing And so I'm sure if that's gonna stay around Kroger doesn't have bakeries in every store. So yeah.
Eaton: Yeah, you know, again, it's all speculation. You would hope if you're buying a if you if you are the acquirer acquiring a business that you would want to keep in and potentially strengthen the best parts of that business. So if you were buying a grocer with a good bakery, then, you know, ideally, you want to maintain that asset and maybe expand some of that know how to to your business. But, you, know, we will see. I hope so. I mean, you're not the only one that that one has come up as well.
Juravich: I'm yeah, I am a I'm a giant eagle icing brand loyalist man This is All Sides on 89.7 NPR news and we're talking about Kroger's purchase of giant eagle with Dan Eaton reporter for Columbus business first So have you heard any specific plans for giant eagle or for giant Eagle stores to close? You know if they're across the street from a Kroger would they close or an underperforming giant eagle where there's would they closed them?
Eaton: The the the the likely scenario would would be a sale to a new operator. So because I did because that would be the competitive concern. So I think the the resolution with with regulators would be, you know, we are not going to operate this store, but we will sell it to someone who will operate, you know a grocery presence of some sort there. So, you know ideally some of these communities won't be losing a grocery option. Or I should say potentially they won't be losing grocery option this all still has to be sorted out but I think you know if you look at the discussions about Albertson's that was the plan is the the hyper competitive areas they were going to sell to another grocery operator so those groceries wouldn't close they would probably change to a new brand in a new opera.
Juravich: Interesting. So it's not a lot about Kroger making a business decision to close poor performing giant eagles or something like that. It's more of a anti-trust, anti-monopoly situation where regulators will tell them you're not allowed to own this much. Yes. Oh yeah, okay.
Eaton: Yes. And Kroger has said so much in its initial statement is that they do not plan to close anything, though the term was divest, which means they're going to sell to someone else in some of these cases.
Juravich: I mean, obviously we don't know who they'd sell to, is it something like, you know, an Aldi or a Meyer might have more of an expanded presence in central Ohio?
Eaton: It's a it's a interesting it's an interesting question because a lot of these Kroger's and giant eagles are of a size where they're probably too small to be a target or a Meyer or like a BJ's. But they're definitely too big to be an Aldi or a Trader Joe's or a Sprouts. Sprouts is a new brand that's coming into this market but they operate much smaller stores than than a typical kind of giant eagle or Kroeger. So maybe it's the scenario where some of this real estate's cut down to a more fitting size for a smaller operator. Some of the bigger operators I, you, know, I don't know, it'd have to be a pretty big store to entice them. So, you now, if there's a buyer out there, you know that's a mystery.
There's not, there's not a clear answer. There's a couple brands, Publix and Weggman's are two brands that are getting close to Ohio, but aren't in Ohio. And I, you, know, I don't know if they'd make a leap. Uh, Wegman's is kind of moving into the Pittsburgh area. Um, uh, Publix is moving into this Cincinnati area, but on the Kentucky, Kentucky side of the border. You know, I don't know if they'd make a leap into Columbus. I don't know that Kroger would want to sell to that would be a big competitive thing. Yeah, that would that would be a a big competitor. But, you, know, those are a couple names that are out there who are expanding, who aren't here currently.
Juravich: Hmm. Interesting. Well, as a family owned and like hometown business, Giant Eagle in Western Pennsylvania is like this hometown operator. It's a big part of the community. Has there been any reporting on how this merger will impact Giant Eagles, like charity efforts and the things that they do? Or does that all get assumed by Kroger?
Eaton: You know, I again back to when we were talking about the bakery You know that that's certainly all going to be assumed by Kroger But you know if that is an important part of the giant eagle identity, you know You would have to think Kroeger would seriously consider keeping that a part of you know I don't know if it would fold it into you know Krogers pretty active on on some conservation type and food food security efforts You know I don't know if they'd want to fold that in or if they do allow giant eagle to sort of continue its own Names on on that front
Juravich: You mentioned affordability earlier and there were concerns that the groceries will cost more if Kroger owns Giant Eagle. But I thought that the point was like the opposite, that they're trying to, Kroeger's trying to compete with Walmart, basically, because Walmart is the big, we're going to talk later about how Walmart has been ranked the top supermarket in the country every year since the year 2000. So if affordability is a big concern and Kroger wants to compete with Walmart they can't raise their prices.
Eaton: I agree with you, I think that's likely to, certainly on the key items, staples, you need to be really competitive on that. I think anytime there's an acquisition of a large company acquiring another company, I think there's just a natural fear that everything I like is gonna, everything's gonna go for the worst, right? Everything's gonna get more expensive, the things I like are gonna go away. The employees I like are going to go away. I think that's just a sort of human nature to assume.
Juravich: My Giant Eagle, where I know where everything is, is going to go away.
Eaton: Yeah, but but but you're right that the competitive pressure is, you know, Wal-Mart dominates this space and Kroger and Giant Eagle both are already, you know Kroger has already said that it needs to get its prices down currently. So so I don't know that buying Giant Eagle is going to be arguably adding these stores is going to give it some more buying power is probably going to help the giant eagle prices.
Juravich: Right. Well, yeah, what I've read is Giant Eagle is more expensive if you do a basket-to-basket comparison, which people do sometimes. Well not people, but like news reporters do sometimes and Giant Eagle. Is more expensive than Kroger, but that's just because the smaller footprint means they have to charge more. Right. Yeah. Okay.
Eaton: OK, absolutely. So so I think prices will come down, but that's just me speculating. But I think there's a natural fear that maybe I'm going to get a giant.
Juravich: Maybe yeah, Giant Eagle comparison prices will come down, but maybe Kroger's will stay the same. Yeah Some business analysts and you reported on this in one of your stories called Kroger's purchase of Giant Eagle a masterstroke. Why is that?
Eaton: Um, you know, it fills, it feels a kind of rare gaps that, um, that they had, you know, Kroger's that I believe the second largest grocer, a second or third largest grocer in, in, the U S uh, currently. So they don't have many holes, but this kind of fills, uh, fills a couple of key ones and does so in a way that's not gonna, uh you know probably trip up on, on regulators like the Albertsons Albertson steel did.
Juravich: Yeah. So Giant Eagle operates about 200 stores and then Kroger under the Kroger name I have here that they have roughly 1,250 locations. So that's bigger, right? Much bigger than Giant Eagle. But then under the, they call it the family of banners. So when you add in the Ralphs, the Fred Meyer, the Dylans, all those names I said earlier, Kroger has roughly 2,700 stores. So now they'll be adding 200 more. So they'll, they'll nearing the 3,000 mark. Can they compete with Walmart still?
Eaton: You know, I mean, they're in as good a position as anyone, but you know, I don't know, does anyone compete with Walmart? Right, I know. It's just different. Yeah, yeah.
Juravich: All right, we've been speaking with Dan Eaton, reporter for Columbus Business First. Thank you for your time today.
Eaton: Thank you.
Juravich: And coming up, we're going to talk about the legalities of Kroger's purchase of giant gold. That's when All Sides continues on 89.7 NPR News.
You're listening to All Sides, I'm your host Amy Juravich.
There was a time when you could find three or more different grocery stores in each city, each with its own loyal customers due to convenience or price. However, as stores consolidate, consumers' shopping choices are on the decline. We're looking at the impact Kroger's purchase of a giant eagle could have on consumers and the supermarket industry this hour. Kroger made headlines back in 2022. When it made attempts to acquire the supermarket chain Albertsons, based out of Boise, Idaho, for nearly $25 billion. But the deal was blocked by federal regulators. Christine Bartholomew is a professor of law at the State University of New York at Buffalo School of Law. Her research focuses on the intersection between antitrust enforcement and consumer protection. Christine, welcome to All Sides. Thank you for having me. So as I mentioned in the introduction, Kroger previously attempted a merger with the supermarket giant Albertsons. This was in 2022. From a legal standpoint, what concerns do you have about the Kroger Giant Eagle merger? You know, when we think about how the Albertson's merger got canceled basically.
Christine Bartholomew: So part of the reason that there was a question about the Kroger Albertsons merger had to do with what we call divestiture. What was the remedy that was going to be the solution to the market consolidation, right? So if you have two grocery stores that are emerging in the same community, if they have one that's on one street corner and one that on the other, oftentimes after a merger, you're gonna end up with one of those stores closing. And so as a way to offset that potential harm to consumers, you have these merger agreements, have something called a divestiture where they sell off one of the stores to a potential other competitor. That way consumers can choose which stores to have. In the Albertson's Kroger deal, the real hang up was what was gonna be divested. And would those divested stores still create some type of competition? The question we still have now with the Kroger Giant Eagle arrangement is they're talking about having divestitures specifically in Columbus, Ohio, but they're not telling us what are they going to divest, to whom, and what this would mean for consumers.
Juravich: Yeah, that's why we're talking about it today. It leaves a lot of questions for Columbus and anyone who is giant eagle loyal in Columbus. But the companies back then, Albertson's and Kroger, when they were trying to do this, they said, and they argued in court, they said they needed to get bigger to effectively compete against larger chains. So in today's economy though, there is some truth in that, right? I think there is.
Bartholomew: But let's take that apart. If you accept that as a primary argument, it essentially says every merger ever should be approved until we end up with a handful of Walmart, Amazon level industries. So that rationale, that kind of argument of we need to be able to emerge simply to be as large as our competitors doesn't really make sense in terms of consumer choice, in terms what it might mean to the labor markets, all the rest. And as such, that argument is actually not something that antitrust law credits. When we look at these mergers, the question is, what is this going to do to you and I as grocery store purchasers? Are our groceries going to be more expensive? Are we going to have fewer choices as far as where we can buy groceries? What's going to happen to the service? And those are really the key inquiries that matter, not so much whether or not it's helpful to these companies to be able to be larger.
Juravich: There's a lot going on here from regulatory perspective. I mean, can you give us an overview of what the Federal Trade Commission will think about when approaching this Kroger Giant Eagle deal? Because it is much smaller than Albertson's. I mean Giant Eagle has about a little like 197 stores. So what will the FTC look at? Will they let it go through if you could predict the future?
Bartholomew: So the analysis question would be the same as it was in the Kroger-Albertson deal. What is this going to be in terms of impact on consumers? You are absolutely right that the deal on a national scale is nowhere as close as Kroeger-Albertsons. Right? Giant Eagle doesn't have a presence on the West Coast, it has a lot less stores. But what really matters is not on the national scale but on the local scale. What is this going to mean to Columbus? What is it going to mean for other cities in Ohio where really we think this is going to be the largest impact? The FTC is going look at those localized potential markets to figure out impact to them and in turn, in turn they are going to have to I am My dog feels very strongly about merger analysis, sorry. The FTC is going to have to look at defining the market, what is it going to mean to the consumers in that market, and will the emerging companies be able to offset that potential harm through those divestitures. Now, as far as trying to prophesize the outcome here, the current FTC has indicated much more tolerance to negotiated merger resolutions, right? So the last FTC under the prior administration and was much more willing to take. Merger challenges to trial, which is why we saw the Kroger Albertsons deal kind of have a lot of challenge to it. The current FTC is not as willing to take on these battles. So the real question to me is not going to be what the FTC does, but what the state attorney generals do, because even if this gets through FTC approval, they might still face some headwinds from state attorney generals.
Juravich: Oh, yeah. So I was going to ask you about the regulatory environment change. So you're saying that under the current administration, they don't tend to litigate antitrust issues as much as previous years. But when you say the attorney generals, are you meaning like Ohio and Pennsylvania? I mean, those are the two states that would care the most about this, right?
Bartholomew: Those are the two I'm watching the most closely to see if they are going to bring a challenge on behalf of consumers in their own states. As my instinct is, they may not have enough information to make that call quite yet. Just like we were saying that without knowing specifics about which stores are going to be divested, they might not have quite enough information so know, do they want to challenge this case? And a state level challenge to a merger can really change the course of things. Remember that in Kroger Albertson's, it really was Washington and Oregon's state challenge, Washington, Oregon, Colorado, that slowed that merger to the point of finally not going forward at all. It was not the FTC action.
Juravich: So is it in Kroger's best interest to sooner rather than later say exactly how many giant eagles in Columbus they'll close or rather sell to a different grocery store? Is that what you mean?
Bartholomew: I think so. I think it is in Kroger's best interest to not only identify the exact number the locations and to whom. All three of those dimensions are really important. In past cases, when we saw, for instance, an Albertsons deal many years ago, when they sold off Albertson stores, they sold them off to a grocery store that could not actually continue to compete, ended up having to go bankrupt. So we need to know to whom are you going to sell these? And if you sell them to a particular store, can they actually create that competition? Necessary to offset what might happen if you and I lose our local.
Juravich: Grocery store. This is All Sides on 89.7 NPR News. We're talking about Kroger purchasing Giant Eagle with Christine Pettigot Bartholomew, a professor of law at the State University of New York at Buffalo School of Law, and her research focuses on the intersection between antitrust enforcement and consumer protection. So back when Kroger wanted to merge with Albertsons, you were critical of the chains, citing their ability to better compete against the likes of Walmart. So basically Kroger and Albertson were both saying, We need to compete against Walmart. That's why we're joining forces. But does that argument apply? I mean, Kroger is obviously still trying to compete with Walmart. Is that why they're buying Giant Eagle?
Bartholomew: So Kroger has said that they need to do this merger because they can't grow on their own, right? They have kind of maximized the scale of their own potential growth and the only way then they can grow would be through acquisition. So you know, it's hard to say whether or not this is the same kind of issue. I would say that I'm hesitant to call this merger Albertson's 2.0. There are really kind of distinctions between this merger and the prior one. This commonality, though, is the thing you just highlighted, this argument that we need to grow to challenge Walmart. And I think what's interesting is something like Aldi. Aldi really makes that argument much more questionable. Aldi has been competing through lowering its distribution costs, it's been competing through lowering it's labor costs. And so that kind of makes you wonder why is it that Kroger is in a position where their only way to grow is through acquisition.
Juravich: Well, there's also something similar with Albertsons because it did merge with the Safeway grocery store chain. Albertson's merged with Safeway back in 2015. It was a $9 billion deal. And to satisfy the FTC, in that case, they sold 160-some stores to someone else. I don't have written down who, but- Hagen, Hagen. Yeah, so Albertson's was allowed to merge with Safeway so that kind of makes me think even though 2015 was a long time ago It makes me. Think that the giant eagle Kroger thing will happen if you just compare it to that
Bartholomew: Well, if we compare it to that, that is at least an antitrust circle considered a disaster of a merger. So when they sold off those stores to Hagen, it was what I was referencing earlier, Hagen could not actually hold onto those stores. Oh.
Juravich: That's why I haven't heard of.
Bartholomew: Business. Is that correct? Okay, got it. So Haggins ends up going, so Albertsons divests a bunch of stores to Haggins and they divest the worst stores. Stores that are already having problems in terms of staffing, stores that are already having problems, in terms, of service. So they were not well situated to be able to compete against Albert's Safeway Merge. Ends up, I mean it even gets worse Amy, they end up, Hagen's ends up going bankrupt. And you know who ends up buying Hagen stores for pennies on the dollar? It was Albertsons. Oh no, they bought them back. That's so weird. Okay, continue. They bought them Penny's on the dollar, it was a great fiscal move for Albertsons and at the end of the day a horrible situation for consumers because then all those stores turn into Albertson's and everything that divestiture was intended to do to create competition never manifested.
Juravich: Will the question be, go ahead, please. No, go head. You asked me, what's the question?
Bartholomew: Well, I think the question is, will this be Albertsons Safeway, once again, or will this be something new? Well, Albertson's and the regulators have learned from the past to ask the really hard questions about the nature of the divestiture.
Juravich: Yeah, well, I don't think any of us know the answers yet to that. As supermarket chains grow, what have you seen? I don't know if regulators even consider this, but the impact on the workers, because we're seeing more self-checkout lines, there's fewer needs for cashiers. The other day in a Kroger, I saw a robot called a stocking robot. It had a sign on it that said I'm scanning the shelves. So basically it makes reports on what needs to be restocked. So. So do anti-trust, anti-monopoly, do they consider worker impact at all?
Bartholomew: Great question. Something that's unsettled. We call that from the antitrust side, instead of the monopoly, we call it monopsony. Monopsony analysis, in terms of what does it mean to the labor side impact, has been an increasing focus of discussion in the past administration. Whether the current Trump administration's FTC and Department of Justice are as interested in monopsony is something that we're still trying to see. So far, they have not indicated as much interest in focusing antitrust analysis on the labor side, but we have seen on the state level antitrust analysis looking into those questions. Hmm
Juravich: Well, I mean, whether it's supermarkets or the media, we're seeing a lot of talk of consolidations, merging of businesses. Are you concerned that monopolies are becoming the new normal, basically? They already are.
Bartholomew: So, I know, let me just be the bearer of all doom and gloom for you today, but market concentration on a global level is an area of deep concern. My biggest question I have is I'm trying to think through what do you do now? So we don't really, as a legal system, like to break up monopolies. We're actually not all that great at doing it. So much of our work in terms of antitrust is to avoid the monopoly in the first place. But if you're at a time and moment in history when the monopolies have already been created, when you have this global level of concentration, this really begs the question about what do you do next. The reason we fear monopolies is the harm to consumers, the harm to innovation, the homogeneity of products. You don't really get that wonderful benefit of competition when you this type of concentration. So yes, I think I'm gravely concerned about it, that I'm not the only one. And there has been a lot of talk over the last three to five years about how can we strengthen antitrust enforcement and come up with new means of ensuring competition in the U.S.
Juravich: Is there a good example of a time when regulators did break up a monopoly? I mean, is there a positive example you can think of?
Bartholomew: Uh, we would have to go really far back. I think we would happen to look at railroads and options in that area. I mean, the one that people, the reason we are so hesitant to break up monopolies is when is more from what happened during, um, mom, pop bell. Remember how we used to have back in the day, we wouldn't have. And all these different phone companies, and we broke up, sorry, there were two large monopolies for phone companies. We broke them all up, then over time they re-consolidated, and so we became having a handful of them. And so the thought was, well, gosh, it was very nice of us to try to break up the industry, but market forces ended up consolidating again. Many of them had gone bankrupt. Airlines raised some similar questions. We had attempted to try to invigorate the airline industry, and that has had ebbs and flows. But I don't know that that means we should just abandon all efforts. One thing that's really fun is if you look at phone companies now, initially they had, when we broke them up, There were a handful and they re-consolidated, but if you and I started talking about phone companies now, we started seeing all these little smaller companies really beginning to create competition. You can now get your, I'm not going to name particular companies because I'm out here to advertise them, but you know, now you can still get monthly phone charges of $25. If you and had had this conversation three years ago, five years ago. We would not have thought that's the case. The reason that happened is more and more small companies entered into the industry. So, I don't know, it's kind of difficult to say which of the breakups worked and which ones didn't because it requires such a long timeline to analyze.
Juravich: Well, how can traditional grocery stores compete with the likes of the Walmart of this world without becoming a monopoly at this point? I mean, even if it is possible, Walmart's buying power just keeps prices lower. So is Walmart a monopoly, I guess?
Bartholomew: Well, yes, I mean, sure, Walmart is a monopoly. And in the U.S., remember that being a monopoly is not illegal. What is illegal is what you do with that monopoly power. When I teach this to my students, I always talk about it as a Spider-Man principle, with great power comes great responsibility. And so we will allow, in the US monopolies, what we care about is, are you using that power? In a way that harms other competition. Having buying power is not enough. And so Walmart is a monopoly but hasn't necessarily abused that authority. The way you compete with some entity of that scale is through differentiation, maybe product differentiation or in terms of variety as well. So, you know, one of the reasons I don't shop at Walmart as much is I want to be able to get to know my grocer. I have this huge advantage that the butcher at my local grocery store will clean all my meat for me, will do all the things that I never know how to butterfly anything. But I can't get that at Walmart. So what you end up doing is differentiating to draw in consumers. And so I think that it's not a question of simply scale or price. Those are variables, but service, quality, variety. Those are ways you can still make marks for yourself.
Juravich: Yeah, but even Kroger doesn't know what it wants to be because, I mean, a few years ago I bought a couch at Kroger, right? You know, and like, is Kroger a grocery store? Why did I buy a couch there?
Bartholomew: Yeah, Meyer has the same question that there are days where yeah, I mean, I I do I've been following Kroger a lot since the Kroeger Albertsons. I don't know It seems like they are struggling and they've had to change the CEO There are some questions in terms of what direction they want to take but I also at the same time I really can't fault them for trying to see hey if we offer a couch if we Offer this different type of product. Will that? Change things up So it is that kind of innovation that we want to see and we want competition to kind of push companies to experiments in that way. That's how we as consumers benefit.
Juravich: Well, I know my bakery people at Giant Eagle, I don't know the bakery people at Kroger, so I will leave it there at that, you know, so.
Bartholomew: I know. I've been hearing about these, uh, what are they, the thumb print cookies? I feel like I got to drive over to Ohio and check them out.
Juravich: I agree that they are the main concern. Giant Eagle has a really good bakery, yes. And we'll leave it at that. All right. Thank you very much. We've been speaking with Christine Pedigo Bartholomew, a professor of law at the State University of New York at Buffalo School of Law. And her research focuses on the intersection between antitrust enforcement and consumer protection. Christine, thank you so much for joining us on all sides. Thank you. And coming up, we're gonna talk about the impact of Kroger's purchase of Giant Eagle from the perspective of the supermarket industry. That is when All Sides continues on 89.7 NPR News. You're listening to All Sides. I'm your host, Amy Juravich. The purchase of Giant Eagle by Kroger has been upsetting for long-time customers of the Pennsylvania-based grocery chain. They worry that Giant Eagle, that they know and love and feel loyal to, will change. But perhaps more so, customers in Columbus wonder what will happen to their Giant Eagle if it happens to be across the street from an existing Kroger. We're talking about the merger of Kroger and Giant Eagle this hour, and we're now going to focus on the impact of the purchase of what it could have on the supermarket industry. Joining us now is Ricky Volpe, professor of agribusiness at California Polytechnic State University, San Luis Obispo. And thank you for joining us today, Ricky.
Ricky Volpe: Thanks for having me.
Juravich: All right, so supermarkets were successful historically because they were able to use the power of size to lower prices and then pass those savings onto customers. So what can you tell us about the history of supermarket success? Are supermarkets still able to do that? Can they pass their lower prices onto customers?
Volpe: Uh, sure. Can they do it? Yes. Do they always do it. Um, the evidence is mixed, but sort of the way you frame it, that, you know, the name of the game is sort of achieving these low costs and pass them along to consumers. That is absolutely still a winning strategy. Um and you know if you want proof of that, just look at Walmart. At any point over the last 40, 50 years and look at what's happening with Aldi now. Those are two examples of chains that have grown or are growing very, very quickly, propelled by the strength of achieving cost efficiencies and offering low prices, no frills, low prices. It's a winning formula. It's where the majority of shoppers who are budget-conscious, concerned about finances are going. And that's sort of the rub. For chains like Kroger and like Albertsons, because famously they tried to merge a few years ago and that all fell apart. But in the last several decades, we've seen that these sort of non-traditional chains. Are more effective at achieving these low costs and therefore having low grocery prices and that's been a real competitive problem for these sort of traditional grocery stores that we're all familiar with and that includes the smaller players like Giant Eagle all the way to national chains like Kroger and Albertson's.
Juravich: In another interview, you said that this whole format of customers being loyal to a particular supermarket has been losing ground for some time, though. So why is that? Why is our loyalty not still there that we go to the same grocery store that we know and love?
Volpe: Right, I think most of that has to, there are two factors and I think the most important factor is that we sort of as an economy, as a society have become more price conscious, just more aware of what we're paying for food, more concerned about the price of food. You know, especially in the last say 15, 16 years since what we call the great recession or the food price crisis around 2007, 2008. Food prices, food price inflation had become sort of top of mind for a lot of shoppers. The real price of food even adjusting for inflation is starting to tick up a little bit It's not dramatic and a lot of prices are still down long-term real terms But that has that has started to turn around and become a concern And you know, especially, you know now as we're starting to look at a few major macroeconomic headwinds This is accelerating again. And so people are looking to save money they're looking to feed their families within budget and that means that loyalty to store banners, to chains, to brands. That erodes. That's the first thing to go. And again, this isn't new. Walmart demonstrated this in a big way in the 80s and 90s and continues to today, that the idea is who has the lowest prices, not necessarily who has brands that I recognize or the organic foods or whatever it may be. So that's the biggest factor. But I will say, also, it still remains the case that... Variety is the spice of life. And while our food retail landscape is becoming more consolidated, and I'm sure we'll talk about that in today's conversation, it's also becoming more differentiated. There's more variety. People are looking to these alternate outlets that are offering experiences, product offering services, that traditional players like the Kroger's and Giant Eagles just don't. And you know, that's everything from very established and well-known names like Whole Foods and Trader Joe's to some of the relatively newer players, again, like. Like Aldi or Sprouts or Wegmans, you know, you name it, that are offering something that's just a little bit different. You know, a different product line, different experience, different layout, you named it. And there's an appeal for that, and it's just peeling off the traditional idea of loyalty to these names that we've known for our whole lives and our parents and our grandparents and all that.
Juravich: Kroger operates thousands of stores across the country, but they operate them under different names. For instance, west of the Mississippi, Krogers are actually called fries. So as supermarket chains get bigger, is this gonna force the smaller regional supermarkets out of business? I mean, can a giant eagle just can't compete whenever there's only two under giant eagles and there's two, almost 3,000 Krogers.
Volpe: Well, yeah, the landscape for independent retailers has been very challenging for a long time. There's no doubt about that. I've actually done some work on this in collaboration with some economists at USDA. But the... Just the numbers from the US census tell a very clear story that small and independent retailers of all stripes, it's not just food, but food in particular, it's been very challenging for a long time for a number of reasons, right? But they are at a big disadvantage in terms of their cost structure, and that puts them at a disadvantage in terms their prices, and it's really as simple as that. And so if we wanna look at a sort of a hierarchy of retailers in terms of their costs and then in turn their prices. The small independent retailers, and that's not just the single store operators. For example, Giant Eagle, who we're talking about, in the grand scheme of things, yeah, they had something like 200 stores. They're still relatively small, and they don't have anywhere near the scale, the buying power, or the capacity to sort of ameliorate their fixed costs over their sales, as a Kroger or an Albertsons does. And so that puts them in a really tough spot. It's not all doom and gloom. It's it's not super bleak. I mean, we see plenty of examples of these smaller players who are successfully differentiating, you know, they have they have their hometown reputation, they have fierce loyalty, that is still the case. It's just a little bit less and less every year, and it's becoming more and more challenging. As these small independent retailers continue to go out of business or close stores due to their inability to maintain efficiencies or getting bought out or whatever may be the case, that's most challenging when we think about rural economies, when we about places where stores are distinct from distribution centers, population density is low. These are particular challenges for food access and food security as these independent stores are forced to close.
Juravich: This is All Sides on 89.7 NPR News. We're talking about the impact the purchase of Giant Eagle by Kroger could have on the supermarket industry. And we're talking with Ricky Volpe, professor of agribusiness at Cal Poly State University, San Luis Obispo. San Luis, Obisbo. So Kroeger tried, you mentioned this, we talked about this earlier, Kroger tried to merge with Albertson's a few years ago. The deal fell through due to federal regulators. But Those two brands said that they were trying to merge to compete with the likes of Walmart. It seems like for at least 20 to 30 years, Walmart is always the elephant in the room here. Why is it that Walmart is the number one grocery store in the U.S. All the time?
Volpe: Oh yeah, so Walmart, I make the argument, I'm a food economist, that's my area of expertise. I cannot speak as well to a lot of other sectors of consumer spending, but I will say I am not aware of a firm that transformed a long-standing industry as rapidly as Walmart did to food retailing. The numbers are really stark. I mean, the first. Walmart entered food retailing in, I believe, 1987 with their first super center, it was in Missouri. 13 years later, they were the biggest food retailer by revenues in the United States. That's incredible to go from one store to biggest in the country in 13 years. That's absolutely amazing. And really the story comes down to what we've already talked about. Walmart, Sam Walton had this understanding. That there was nothing special about food as compared to all of the other product categories that Walmart was already offering in their discount stores, which have been around since the 60s. Sam Walton had this understanding that there were more price-sensitive shoppers than quality-conscious shoppers out there, and he was right, you know, by a factor of five or ten, right? A lot more people were more interested in saving money and having reliable, reliably low prices than worrying about the provenance of their food or the quality of customer service or the cleanliness of the stores, and so anyone who wants to can look it up. There are all these famous stories about these Walmart supercenters and Walmart stores back in the 80s and 90s that were frankly dirty, disheveled, prices were written on the back of printer paper and duct taped the corrugated steel on the walls. But it didn't matter because every step that Walmart took back then and is taking now is really geared towards efficiency, lowering those costs and say what you will about Walmart, they pass those cost savings on. So for a long, long time, it's actually not the case anymore, we can talk about it if you want, But for a long, long time, Walmart was just unequivocally, they were the lowest priced food retailer in the US. Proof of the pudding, people geared towards that. They realized they could save money and that's really the key to their success. And they expanded geographically using this brilliant hub and spoke system that capitalized on their physical infrastructure. And that's how we ended up where we are today. And nowadays, of course, Walmart views Amazon as their biggest competitor and that why. Walmart, their physical growth has stagnated. They've more or less saturated the markets where they're likely to be successful in the U.S., but they're making massive investments to expand Omnichannel digital. And that's why if you look at their annual reports, their shareholder reports. Their revenue growth, their earnings growth, their profit growth, strong as ever, if not stronger, but it's all happening in the cloud now. It's all happened in digital with deliveries and returns and online marketing and retail media and all that. When we talk.
Juravich: When we talk about Walmart, is Sam's Club included in that?
Volpe: Oh, yeah. Oh, absolutely. So you've got the discount stores, which are going the way of the diner store, you have the supercenters, which everyone knows. That's 200,000 square feet mix of department store and supermarket. You get the Sam's Club, that's the club stores, right? And then you have the smaller formats, the neighborhood stores, the expresses, they don't get a lot of headlines, but Walmart is also making these moves to enter into markets where there's just no space for a supercenter. So yeah, absolutely
Juravich: Well, and we're we're running out of time. We only have two minutes left. But can you talk about that whole idea of the grocery delivery? I mean, do we even need to talk about loyalty to a supermarket like an actual physical store anymore because the future is having everything delivered to you? Is that true?
Volpe: That's another factor that has continued to erode what we think of as loyalty, right? Because Of course, a lot of people are looking for low prices and all that kind of stuff. But related to that, I would argue concomitant to that is this demand for convenience, right? And look at Amazon, right, there's a reason why Amazon is the biggest retailer in the world, right? They provide, or in North America, they provide convenience, right? So to the extent that food retailers, whether they're traditional or new banners or whatever, are able to make food shopping painless, effortless, convenient and do that at a low price, that's where people are going to go. Regardless of what the banner says, right? Regardless of what their corporate mission is or who is the CEO or where's their distribution center. You know, convenience is a huge factor. So Omnichannel has absolutely changed the game very rapidly and Walmart knows that.
Juravich: In in less than 30 seconds, do you think this Kroger Giant Eagle deal will go through or will it go the way of the Albertson situation?
Volpe: No, I think it will. I mean, I could be wrong, but I think it will go through because of the scale, because it's, it's a much, much smaller merger. And importantly, this is why Kroger is doing this deal. There's not a lot of geographical overlap between Kroger now and where Giant Eagle is. That's what Kroger is doing. This deal is to get effectively to gain Western, Western Pennsylvania.
Juravich: Except in Columbus. That's where the overlap is. So we've been speaking with Ricky Volpe, professor of agribusiness at Cal Poly St. Louis Obispo. Thank you for your time, Ricky.
Volpe: Thanks so much. Bye bye.
Juravich: And you're listening to All Sides on 89.7 NPR News. I'm Amy Juravich. Thanks for joining us.