Update: Kroger, the parent company of King Soopers, and Albertsons, the parent company of Safeway, announced a merger agreement on Friday morning.

DENVER (KDVR) — Experts warn Colorado shoppers could face higher prices and fewer choices if King Soopers and Safeway merge. 

Bloomberg reported Thursday that the parent companies for the two grocery giants are in talks to become one large chain. 

“You’re taking two competitors that are serious competitors, and now you’re putting them together and competition in the market will decrease,” University of Denver finance professor Mac Clouse said. 

Mega-grocer could impact shoppers

While other states have regional chains like Publix and Hy-Vee to choose from, Colorado’s main grocery options are all owned by Albertsons/Safeway and Kroger. 

“It can have a much more significant impact in Colorado than it would in other places,” Clouse said. 

According to data published in 2021, Kroger, which owns King Soopers and City Market stores, made up 33% of the market share for groceries in Denver. Walmart was a distant second at 16%, and Safeway held 11% of the market share. 

Under the proposed merger, the new Kroger-Safeway stores would take over nearly 45% of Denver’s grocery store footprint. However, Clouse argued it actually would create a monopoly in Denver’s grocery game. 

“If those entities merge, they’ve got 100% of that market,” he said. “The broader market includes Walmart, Target, Whole Foods, but when you start looking specifically at the traditional grocery stores, it’s not that broader market and that’s where the monopoly would happen.”

Clouse said under that scenario, shoppers would lose. 

“It’s going to hurt. It’s going to hurt because they don’t have the competition from each other that forces them to keep prices down,” he said. “Without competition then they can raise their prices and that’s what the consumers will see.”

Union: Merger would mean ‘monopoly’

Clouse said Colorado may also see store closures. 

“If they happen to have a King Soopers that was just across the street from an Albertsons or across the street from a Safeway, they don’t need to have two grocery stores right across the street from each other anymore because they’re not competing. So they can shut one of them down,” he said. 

In a statement, UFCW Local 7 President Kim Cordova said, “The proposed merger of these two grocery giants is devastating for workers and consumers alike and must be stopped.”

UFCW Local 7 is the union representing Colorado grocery workers at both Kroger and Albertsons/Safeway stores. 

“This proposed merger of two of the largest grocery companies in the nation will no doubt create a monopoly in the grocery industry for many communities, with one company owning a $47 billion market share,” the statement said.