The two leading supermarket chains in the United States, Kroger and Albertsons, have announced their intent to merge into a single supermarket company of unprecedented national scale.

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Kroger’s acquisition of Albertsons for a total enterprise value of $24.6 billion will usher in a new era of grocery competition, with traditional supermarket chains united against newer grocery formats such as discount retailers and online delivery.

The real estate footprints of the two supermarket players are largely complementary with one another, with Kroger having a greater presence in the Midwest and Southern U.S. while Albertsons has a larger store footprint in the Northeast and West Coast. The Kroger Company consists of 20 distinct supermarket banners including Kroger, Fred Meyer, Fry’s Food Stores, Ralphs, King Soopers, and Gerbes. Meanwhile, Albertsons’ 24 supermarket banners include Acme, Kings, Balducci’s, Safeway, Star Market, Shaw’s, Tom Thumb, Vons, and United Supermarkets. The merger will result in a combined entity that includes 4,996 stores, 3,972 pharmacies, 2,015 fuel centers, 66 distribution centers, and 52 manufacturing plants, occupying 11.8% of the food and grocery market overall.

This prospective merger, should it go through, would usher in a new era of grocery retail based on the sheer scale that the combined supermarket chain would achieve. The new competitive environment would be defined by Kroger­Albertsons, Walmart, and Amazon, which Grocery Dive journalist Jeff Wells refers to as the “new Big 3”. The combined Kroger-Albertsons firm’s omnichannel technologies could be shared across their supermarket ecosystem, enabling more effective competition against online grocery players like Amazon.

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