When the Federal Trade Commission (FTC) blocked Kroger’s $24.6 billion purchase of Albertsons, I argued at the time that it was making a mistake.
It’s not that I wanted less competition among regional grocery chains or fewer choices for consumers. Instead, I argued that the FTC was unfairly framing the competition in the grocery space.
“Walmart, Costco, and Amazon have a national footprint, and they don’t need to make a high margin (or any margin) selling groceries. All three companies can use food as a loss leader to help them capture customers for their other businesses. Basically, all three of these major chains with massive buying power have the ability to sell groceries at whatever price they want,” I wrote in 2023.
It’s a situation that puts regional grocery chains in an impossible position when it comes to price.
“That puts massive pressure on local grocery chains, even large ones, including Kroger and Albertsons. Those chains may have locations near their customers (Walmart has that too), but they actually have to make money selling groceries,” I added.
Nothing has changed, and both Kroger and Albertsons recently admitted that they can’t compete on pure price.
Kroger and Albertsons make pricing statements
Kroger CEO Gregory Foran has conceded that his company can’t be the price leader in groceries.
“We are not in the game of being the cheapest because we do not have the lowest costs. But we can provide the best value,” he said during his company’s second-quarter earnings call.
More Kroger:
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Albertsons has a new advantage over Kroger, Walmart, Amazon for grocery shoppers
Albertsons CEO Susan Morris was clear about which companies hers could not compete with on price.
“Our biggest leakage is to the big players: Walmart, Amazon, and, to some degree, Aldi, as a price-competitive player,” she said during Albertsons Q1 earnings call.
Both chains’ CEOs talked broadly about value, but strapped consumers can shop at Walmart, Amazon, Costco, Aldi, and other low-cost players.
Kroger is trying to compete on value and not price. Shutterstock
How far behind are Kroger and Albertsons?
Kroger and Albertsons aren’t a little bit behind Walmart, Costco, Aldi, and others when it comes to price; they’re way behind.
A February 2026 report from Consumer Reports used Walmart as the baseline and showed where Kroger, Albertsons, and Publix brands fell in pricing:
Kroger: +14.8%
Publix: +20.3%
Albertsons: 24.8%
Walmart was not the cheapest. It was just the baseline. A number of major brands were even cheaper:
Costco: -21.4%
BJ’s Wholesale: -21%
Lidl: -8.5%
Aldi: -8.3%
Amazon was not part of the survey.
Regional grocery chains simply can’t compete on price
From within five miles of our South Florida home, I can visit four Publix stores, multiple Walmart Neighborhood Markets, two Aldi locations, two Target locations, a Whole Foods, and probably a chain or two I’m missing.
We still do some of our shopping at Publix, knowing it’s more expensive, but the chain loses some of our business to delivery from Target, higher-end spending at Whole Foods, and the odd stop at Walmart.
There’s no convenient Costco, although we could order from one through Instacart, and we’re generally not Aldi fans.
For traditional regional grocery chains, it’s not like consumers are abandoning them. Instead, it’s a slow loss in sales that creates a kind of death by a thousand paper cuts situation.
Thomas Paulson, head of market insights at Advan, spoke with TheStreet about the challenges facing grocery chains. He made it clear that they can’t compete on price alone.
“Walmart, Aldi, and Costco have scale advantages and business model differences that neither Kroger nor Albertsons can match. Where they can compete is on offering: localized and farm-to-store produce, a better/tailored prepared meals/ready-to-eat offering, better service, and easy-to-access, convenient stores,” he told TheStreet.
Paulson thinks Kroger, Albertsons, Publix, and others will be forced to make tough decisions on which stores will remain open, and he sees more smaller chains disappearing.
“More likely, more consolidation, along the lines of what happened with Giant Eagle. Regional players are increasingly just handing over the keys at a lower valuation multiple than the acquirer would otherwise pay, rather than compete store by store,” he added.
RTM Nexus CEO Dominick Miserandino thinks that grocery stores might be playing the wrong game.
“The problem for Kroger and Albertsons isn’t that they’re bad supermarkets. They’re fighting a price war against companies designed to win a price war. Walmart has the scale, Aldi has a much simpler operating model, and Costco has customers paying for the privilege of shopping there,” he told TheStreet.
To win, regional grocery chains have to embrace a different model.
“Traditional supermarkets have to give people another reason to come in, because they’re not going to win by being the cheapest,” he added.
Related: Costco’s longtime shoppers may not love what comes next