And the winner is ... Walmart

The nation's largest grocer must be loving government efforts to break up the $25 billion Kroger-Albertsons deal

Colorado Attorney General Phil Weiser spent the week trying to break up a $25 billion merger of Krogers and Albertsons. The Federal Trade Commission has also sued to block the deal. So has Washington state.

Unionized grocery workers in Colorado are cheering the antitrust overkill. But if the deal gets blocked, they might as well start applying for jobs as Walmart greeters.

“Walmart wins and everybody else loses,” says longtime retail industry consultant Burt Flickinger of SRG Resource Group, who advises Kroger and many other major retailers.

Aisles and aisles of prices traditional grocers can’t always match.

Here’s why Flickinger might be right:

• Kroger is the nation’s largest traditional grocery store chain with about $150 billion in sales. Albertsons is second with about $79 billion.

• The two combined do not equal one Walmart, which along with its Sam’s Club, enjoys more than $300 billion in grocery revenues.

• Walmart and Sam’s Club have more than 5,700 stores nationwide. A combined Kroger and Albertsons would have fewer – about 5,000 locations.

• Albertsons wants to sell out to Kroger because Walmart is eating its lunch.

• Walmart isn’t done chomping up market share. It plans to build 150 more stores and remodel 650 others over the next five years.

• Walmart snarfs up far more government subsidies than traditional grocers.

• Antitrust efforts that keep Walmart’s competition small are yet more subsidies.

Flickinger is not alone in his assessment.

"The government is de facto helping an entrenched competitor by not letting others get big enough to challenge them," David Klink, an analyst at Huntington Private Bank, told Reuters earlier this year.

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