Walmart might be the big winner of the blocked Kroger–Albertsons merger

When federal and state judges blocked the proposed $24.6B Kroger–Albertsons merger in December 2024, it was framed as a win for shoppers: protect competition, protect wages, protect communities.

Fast-forward to early 2026, and the on-the-ground story looks a lot messier. Stores are closing anyway. Shoppers in a few communities are driving farther. And the biggest retailers—especially Walmart—are quietly inheriting more grocery share without having to fight a newly “super-sized” No. 2 competitor.

If you’re a retail supplier, this isn’t just industry drama. This is shelf access, volumes, trade leverage, and your cost-to-serve colliding in real time.

What happened after the merger died: closures, cost cuts, and “portfolio hygiene”

Let’s start with what’s not debated: once the merger was blocked, both companies moved from “deal mode” back into “operations mode.” And in grocery, “operations mode” often means closing underperforming boxes and reallocating capital.

Kroger publicly said it planned to close about 60 underperforming stores over the following 18 months, and it took a $100 million impairment charge tied to those planned closures.

Albertsons disclosed in an earnings call that year-to-date it had announced the closure of 29 stores and expected to open nine new stores by year-end—net negative overall.

Put those together and you’re staring at roughly ~89 stores either closed or slated for closure across the two chains in the wake of the deal collapsing—before you even count whatever comes next.

And yes, some closures were effectively “delayed decisions.” Kroger leadership indicated normal portfolio actions were slowed while the merger was pending, then resumed once it was off the table.

The divestiture irony suppliers should notice

Here’s the part that still makes people shake their heads.

Under the merger plan, Kroger and Albertsons proposed divesting 579 stores to C&S Wholesale Grocers for $2.9 billion, explicitly positioning the package as a way to keep stores operating and preserve competition.

Was that divestiture plan perfect? Critics argued C&S’s ability to operate that many supermarkets at once was a legitimate question mark. But the intent was clear: divest stores instead of just shutting them down.

Post-block, the industry got something simpler—and harsher: more outright closures.

For suppliers, divestiture vs. closure is not an academic distinction. A divested store can still be a customer door. A closed store is a dead door.

Consumers: prices didn’t explode, but access got worse in some places

The pro-block argument was: “Stop the merger or prices go up.” The post-block reality is: prices didn’t uniformly spike, but the grocery map in certain neighborhoods got thinner.

Kroger leaned into price investment—executives said it cut prices on more than 2,000 products in 2025.

Meanwhile, Walmart’s grocery engine remains a freight train: grocery drove nearly 60% of Walmart U.S. net sales (about $276B in fiscal year 2025).

But the bigger consumer pain point is availability. In parts of Washington, for example, the closure of a Fred Meyer location has been discussed in the context of “food desert” dynamics and longer trips for full-service grocery/pharmacy needs.

So if you’re a supplier who depends on traditional supermarkets for distribution, the practical takeaway is blunt: some communities now have fewer conventional grocery doors than they did two years ago—merger or no merger.

So… is Walmart the big winner?

If you define “winner” as “the company whose competitive position improved without having to do much,” Walmart has a strong case.

Numerator-based reporting has put Walmart at about 21.2% of U.S. grocery share, and about ~25% when you include Sam’s Club, far ahead of any conventional grocer.

Here’s why the blocked merger helps Walmart in a very practical way:

• It prevented the creation of a larger, unified No. 2.

• It kept Kroger and Albertsons spending energy competing with each other in overlapping markets, instead of pooling scale to pressure Walmart nationally.

• It preserved a world where “traditional grocery” is still fragmented—exactly the environment where mass and club retailers keep taking share.

And from a supplier’s lens, the uncomfortable implication is this: when Walmart gains share, Walmart’s terms become the industry’s gravity.

Would the merger have created real purchasing power?

Yes—scale matters. A combined Kroger–Albertsons would have been larger in store count and volume, and it’s reasonable to expect more leverage in procurement, logistics, and private label development.

But suppliers should hold two thoughts at once:

1) More scale could have produced a stronger Walmart challenger

A bigger No. 2 might have been able to fund sharper pricing, more aggressive loyalty personalization, more supply chain investment, and more omnichannel infrastructure—things Walmart already does exceptionally well.

2) More scale also means a tougher buyer

Purchasing power doesn’t just create consumer savings. It can also create:

• more cost-down pressure,

• tighter compliance requirements,

• more program complexity,

• and less tolerance for operational noise.

In other words: a mega-merchant can be a better competitor to Walmart and a tougher customer for suppliers at the same time.

What’s at stake for suppliers (and what’s changing underneath you)

This is the part that doesn’t get enough airtime.

When a supermarket chain closes stores and chases productivity savings, suppliers often feel the ripple effects before the quarterly earnings call makes it sound “strategic”:

• Assortment rationalization: fewer stores + efficiency drives often lead to fewer SKUs per category.

• Higher bar for velocity: if an item doesn’t move, it doesn’t survive.

• Trade spend scrutiny: “prove it worked” becomes the default posture.

• More private label pressure: retailers lean into owned brands to protect margin.

• More operational penalties: tighter execution expectations can raise chargeback/deduction exposure.

Albertsons has explicitly talked about multi-year productivity initiatives and digital growth investments. Kroger has been publicly balancing price investment with cost resets.

None of that is “bad.” But it is a different playing field than the one many suppliers built their plans on in 2022–2024.

A quick fictional scenario that looks painfully real

Fictional example (not a real brand):Imagine you’re a regional salsa supplier. You finally win 180-store authorization across two banners. The line review took nine months. Your team celebrates.

Then six months later, one banner announces closures in several underperforming locations. Your authorized store count drops 12% without you doing anything wrong. Your production plan is now too big, your freight cost per case rises, and the retailer wants a sharper EDLP (everyday low price) because “the category is under pressure.”

You didn’t lose because your product failed. You lost because the chessboard changed.

That’s what suppliers are dealing with in this post-block world: structural change disguised as “normal optimization.”

Did critics get it right?

The Federal Trade Commission and others argued the merger would reduce competition and could harm consumers. That’s a defensible position—especially in local markets where Kroger and Albertsons were direct rivals.

But here’s the complication: the outcome suppliers and communities are experiencing now includes many of the same pain points people feared—just arriving via a different route. Stores still close. Jobs still get disrupted. And in some neighborhoods, grocery access still gets worse.

So rather than “critics were right” or “critics were wrong,” I’d call it this:

Antitrust stopped consolidation. It didn’t stop consolidation pressure. That pressure simply moved into cost cutting, closures, and the continued rise of mass and club.

Supplier playbook: what I’d do right now

If your growth plan leans heavily on traditional grocery, this is a moment to tighten your strategy—not panic, tighten.

1) Treat distribution like a risk-managed portfolio

Don’t let one format (traditional grocery) be your only path. Mass, club, ecommerce, value, regional, and specialty each hedge different risks.

2) Win the shelf by winning the math

Bring a sharper story than “great product.” Bring:

• velocity by store cluster,

• margin story for retailer,

• promo ROI proof,

• and a clean operational scorecard.

3) Assume the “Big Box gravity” keeps increasing

With Walmart holding ~21% grocery share (and ~25% including Sam’s), suppliers should assume price perception and value expectations will continue to be set by the biggest players.

4) Get aggressive about leakage

As retailers tighten execution and suppliers run leaner teams, deduction leakage and compliance penalties become a silent margin killer. (This is where disciplined recovery and root-cause work matter—quietly, consistently, and without drama.)

Bottom line

Blocking the Kroger–Albertsons merger protected local head-to-head competition in many markets. That matters.

But the post-block reality has also included store closures and accelerated “efficiency” moves, while Walmart’s scale advantage remains untouched—and arguably strengthened—because the industry never produced a bigger, unified challenger. 

For suppliers, the lesson is simple and slightly uncomfortable:

You don’t get to choose the market structure. You only get to choose how prepared you are for it.