Kroger’s failed merger with Albertsons, attempted four years ago, was portrayed in court this week as a venture that was flawed from the beginning. Testimony from former Kroger CEO Rodney McMullen revealed internal doubts about the deal’s viability, even as the company publicly expressed confidence. McMullen acknowledged that the Federal Trade Commission, led by then-Chair Lina Khan, had long opposed large grocery consolidations. Khan’s stance became clear as early as 2022, when she stated that such mergers risked further market concentration and threatened competition.
The legal team at Kroger understood these risks, given Khan’s well-documented position on antitrust enforcement. Despite this, McMullen proceeded with the merger, delegating negotiations to subordinates while Vivek Sankaran, then-CEO of Albertsons, found himself excluded from direct discussions. Sankaran testified that Kroger’s approach weakened the merger’s chances by offering inadequate store divestitures—a critical demand from the FTC. The agency had already signaled resistance, and Kroger’s proposals did not address competition concerns. McMullen maintained that the company had met its merger agreement obligations, leaving unresolved why both sides pursued a deal they knew faced regulatory obstacles.
Grocery mergers are rarely straightforward, but the Kroger-Albertsons attempt stood out for its complexity. The trial now examines whether Kroger bears responsibility for the deal’s collapse, with Albertsons seeking billions in damages. The judge’s decision will depend on whether Kroger acted in bad faith or simply underestimated the FTC’s opposition.
Regulators reshape grocery merger battles
The grocery sector has long dealt with consolidation, but the Kroger-Albertsons merger was exceptional in its scale. Unlike smaller deals, this one required dismantling overlapping store networks to satisfy antitrust requirements—a task that proved unfeasible. The failure highlights how even well-funded companies can miscalculate regulatory challenges. Khan’s leadership at the FTC has reshaped merger reviews, forcing businesses to reconsider their strategies in concentrated markets. For Kroger and Albertsons, the experience may serve as a warning that certain battles are not worth pursuing.
Regulators have become more assertive in blocking grocery mergers, especially in regions where deals would eliminate competition. The Kroger-Albertsons collapse reflects broader changes in antitrust enforcement. Companies now face stricter scrutiny, and the consequences of failure extend beyond lost revenue to legal liability. For Kroger, the trial could reshape its approach to future deals, not only in grocery but across its operations.
Industry shifts as Kroger’s trial looms
While the legal proceedings unfold, the grocery industry continues to adapt. Ahold Delhaize has appointed Thierry Garnier as its next CEO, with full leadership set to begin in March 2027. The transition follows Frans Muller’s retirement and signals a strategic shift for the multinational retailer. Garnier will prioritize strengthening Ahold Delhaize’s brand and market presence, adopting a more stable approach compared to the contentious merger disputes playing out in court.
The trial’s resolution will clarify whether Kroger can be held liable for the merger’s breakdown. However, one outcome is clear: the grocery industry’s consolidation phase may have reached its limits. With regulators increasingly wary of large mergers, companies must carefully assess risks, or face repeating Kroger’s errors.
One email chain from 2020, obtained by Bloomberg, shows McMullen instructing his team to “proceed cautiously” while downplaying concerns in investor calls. The disconnect between private skepticism and public assurances became a central issue in Albertsons’s damages claim.
